The Washington PostDemocracy Dies in Darkness

The little-known reason Americans could be paying too much for chicken

Placeholder while article actions load

Chicken is the most popular meat in the United States, and every year, Americans spend billions on the wings and breasts and legs.

But here’s a funny thing about what American shoppers pay for all those birds: By decades of tradition, the price at many grocery stores is based on a single estimate, published weekly, that no one but the chicken companies can be sure is accurate.

Now, some are wondering, maybe it wasn’t.

In recent months, in a little-noticed decision, the U.S. Agriculture Department stopped publishing the weekly chicken price estimate — known as the “Georgia Dock” — in its official “Market Report.” The Georgia Dock is calculated by the Georgia Department of Agriculture and based on the reports from eight anonymous chicken companies in the state. The companies are not asked to show receipts or other documentation proving that their figures are accurate.

In a statement to The Washington Post, a USDA spokesman said they discontinued publishing the Georgia Dock price “when data from the source report could not be independently verified.”

Any bias in the Georgia Dock would have had huge effects on consumers. The Georgia Dock price is frequently used in contracts between chicken producers and supermarkets and those prices, in turn, could raise or lower what supermarkets charge consumers.

Over the past two years, the Georgia Dock price has drifted significantly apart from other chicken price averages, rising about 20 percent out of line with a separate index maintained by the USDA. A deviation of that magnitude could have cost U.S. grocery consumers billions of dollars extra.

Officials at the Georgia Department of Agriculture said they are reviewing their processes for calculating the estimate. But, they said, they are confident in the figures they have provided.

“We trust the companies we work with,” said Alec Asbridge, director of regulatory compliance at Georgia Department of Agriculture. “We don’t see any reason they would submit information that wasn’t truthful.”

Some in the industry dismissed the complaint about the Georgia Dock, saying that it represents a different bird and a different market, and so comparisons to other chicken prices are unfair.

“The Georgia Dock has come to be a trusted reflection of the supply and demand for retail stores,” said Mike Cockrell, the chief financial officer at Sanderson Farms. The Georgia Dock represent “a different product and a different market with different supply-and-demand fundamentals.”

Asbridge and other officials noted that there are methods of preventing surveyed companies from reporting biased price estimates. If the market price reported by any individual company is significantly out of line with the others, for example, it is dropped from the average.

Regarding the anonymity of the firms surveyed, officials said state laws prevented them from disclosing the names of the eight companies.

“It seems like an extremely opaque way to determine the price of chicken,” said Thomas Gremillion, director of the Food Policy Institute at the Consumer Federation of America. He noted that the beef, pork and chicken industries have seen less competition in recent years. “When you have market concentration, there’s more opportunities for shenanigans.”

While little-known, the Georgia Dock estimate is influential because so many grocery chains use it in their contracts with chicken companies.

For example, officials at Sanderson Farms, a large chicken producer, said that with all but one of their supermarket customers, the price is based on the Georgia Dock. Tyson Foods said only a small portion of their supermarket contracts is “connected” to the Georgia Dock. Perdue declined to answer questions.

Among supermarkets, Walmart, Safeway and others confirm using the Georgia Dock, as well as other factors, when negotiating chicken prices, too.