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This week on Eater’s Digest, meat expert Matthew Wadiak on where we went wrong
Last week, almost one-fifth of Wendy’s locations were sold out of hamburgers, multiple national grocery chains limited how many fresh meat products shoppers could buy, and Shake Shack execs spoke of rising beef prices on an earnings call. The supply chain of fresh poultry, pork, and beef has been heavily impacted by the closure of meat processing plants following novel coronavirus outbreaks. Even though President Trump deemed processing plants “critical infrastructure,” at the end of April in an attempt to pressure workers and owners to keep up the pace of their operations, closures are unavoidable.
This week on Eater’s Digest, industry expert Matthew Wadiak explains why our food chain is so fragile and how we’ve incentivized the wrong qualities in big agriculture for the last seventy years. Wadiak is a co-founder of meal subscription service Blue Apron and the CEO of Cooks Venture, which raises, processes, and sells heritage, pasture-raised chickens.
Because meat has been optimized for feed conversion (versus flavor or health), the animals in our food system often can’t outlast a plant closure and have to be euthanized. Meanwhile, because processing is so concentrated, a disruption to one plant can impact the whole system. Big agriculture can additionally serve as the source of major pandemics. Wadiak expands on all of these issues and more in the episode below.
Listen and subscribe to Eater’s Digest on Apple Podcasts. Read the full transcript of our coversation below:
Amanda Kludt:
Could you give us the context of the business? Where is it? How many people and what you do?
Matthew Wadiak:
Our business is we have a 860-acre farm down in Decatur, Arkansas, and that’s a breeding facility where we breed heritage line birds only. And we have a bird, that’s over the course of the last 10 years, developed and been selected for flavor, for health, for having a better immune system. Then we have a farming network. We grow some of the birds that we produce on our farm and some of the birds on our partner farmers throughout about a 50 mile radius. A lot of poultry farmers participate in something called the tournament system, where the the best producing growers get paid the most, and the least get paid the least. We don’t do that. We just pay our folks about twice of the average of that as a flat rate.
And because they already own their housing, they don’t have a lease payment to a bank. So what we’re doing is essentially recycling these farms, and giving our farmers and living wage for maybe in some cases, the first time in their careers. Which is-
Daniel Geneen:
And you guys process yourselves too, right?
MW:
Yeah, so then we harvest the birds. We actually put them in small crates, they go on a truck, and those individual crates go into our plant, and they get individually loaded and process the birds in a small plant with about 200 employees in Jay, Oklahoma, which is about 20 miles away from us, just over the border.
DG:
As far as you’re concerned right now, could you talk us through what is going on with the supply chain in the meat industry in terms of on the huge scale?
MW:
Yeah, it is certainly really fragile. Actually Temple Grandin wrote a really good piece that came out a few days ago, where she was talking about how, her quote was, “Big isn’t necessarily bad, but big is very fragile.”
And I think where we’re seeing the cracks emerge in the macro supply chain on the meat side of things is a few things, (A) you have workers in plants obviously getting paid way too little, and often traveling to work together, and often staying in the same home together. And that’s an issue obviously because outside of the plant you have areas of the country where there’s not a lot of coronavirus, but within those plant communities, there is a lot of coronavirus because of the social living conditions. And that’s been widely reported.
What we’re not really hearing a lot about, but which is equally important is this fact that you’re hearing about animals being euthanized, poultry and pigs especially. And one of the main issues with the fragility of the supply chain at scale is that over the course of the last 70 years, sort of like post-World War II, we’ve really bred animals to focus solely on feed conversion, and not really on flavor, and livability, and quality of life.
And that’s led to breeds of pork and poultry animals specifically that dominate the entire food system, that have very low immune systems, that grow really quickly; and that if you had to, for example, shut a plant down for two weeks, those animals can’t survive for that time period, for those couple of weeks. Whereas if it was a healthier breed of livestock, you could close the plant, those animals would be just fine, you wouldn’t have to euthanize them and you could ramp the plant back up and slow down production a little bit.
That’s part of the fragility of the modern system is in the breed and the genetics of the animals that we have sort of like-
AK:
And that they just can’t live long enough. Like you just can’t keep them alive for two more weeks?
MW:
Yeah. In the case of chickens, they can’t.
AK:
Wow.
MW:
Because a modern chicken is processed at 38 days, and they grow so quickly, at close to 50 days, really even at 38 days, they start dying of heart attacks-
AK:
Jesus.
MW:
And organ failure and they just get so big they can’t walk and move, and they just don’t make it even from the feed line to the water line in a conventional chicken house. So that’s really horrible.
DG:
Could you explain the role that the actual slaughter house, and the processing plant, like the ones that would be owned by one of these huge companies, Tyson or whatever... what is the actual trajectory of the meat that is going from the farm to eventually one of these big commodity suppliers?
MW:
So that’s a really good question. And I think that’s sort of like a gap in just general knowledge around how food works. The processing plant is really like the big company aggregator of an entire community of farmers. So for example, in the Smithfield case, you have 900 farms that are contracted into that plan. So if you’re a poultry farmer, or a hog farmer in America, it means that you’re on contract to grow for a big company that owns that processing plant. And that infrastructure exists in the farming community because there is a plant there.
And that’s why there aren’t a lot of small farmers doing this in small scale in America because they have nowhere to process their animals. If you want to grow livestock, you have to, in most cases go with a big company who owns one of those kinds of plants. They process the meat, then they put it into secondary packaging and ship it off to consumers.
DG:
So what if I wanted to do a slightly better job raising animals? I would still have to send it to that plant, and therefore it’s going to make its way to the commodity buyers, and I’m not really incentivized to spend any extra effort?
MW:
So if you want to grow like a few hundred chickens, or even a couple of chickens you can do it. And if you can find a really tiny processor for like $5 a chicken to process them for you. But by the time that gets to the end consumer, you’re talking about like a $40 chicken, with all of the variable costs associated with that. And that’s sort of the broken part of the supply chain that folks aren’t really totally identifying.
So that’s what we wanted to do. We wanted to grow a better chicken, but to do that, we had to buy a genetics company and a processing plant just to make it cost effective for our customers to be able to do that. And early in my career, I was spoiled as a young cook because we were able to afford really great food in high end restaurants, and working in California and stuff. And if you’re paying a hundred bucks for dinner, you can buy the best vegetables and the best meat from small farms.
MW:
But if you’re talking about having something that’s accessible and affordable on a grocery shelf, or like in my previous role at Blue Apron, you’re buying food for millions of people, that supply chain with that kind of level of quality and commitment to animal husbandry just doesn’t exist in America because the roadblocks to processing are too great.
AK:
When we’ve been reading about or hearing about the president wanting to force the plants to reopen, in your point of view, is this a good thing? Is this a bad thing? Is keeping these animals going through the system beneficial, or is the sacrifice on the worker side too great?
MW:
What’s the cost? There’s no cost that you can attribute to a human life. The lives of the people who work at these facilities need to be protected. And there’s an executive order that was just reinforced again two days ago. And that went out to all the meat plants in America saying you need to work with the USDA to keep the plants open. Because on the day that Trump initially announced the executive order to keep the plants open, Tyson who advocated for that very heavily, shut down a plant that day after taking out a full page ad in the New York Times, Washington Post and The Wall Street Journal. So that’s so paradoxical and doesn’t really totally make sense to me, why you would advocate it, create that order, and then shut a plant down on the same day.
And obviously the reason is you need a stable workforce in the country. And more than anything, I feel like, if you’re a big company out there right now, and you’re buying really cheap meat, and you’re trying to bid one company against another for five cents to drive the price down, you’re affecting these workers and these farmers more than anything.
And I think that’s what we have to remember is the people with big wallets and buying power, especially the commercial food system, which has really driven down prices in the last decade, we really have to think considerately... not even decade, the last 30 years... we have to be considerate about, “Okay, an extra few cents is going towards programs that are not just profit margin for a company, they’re going towards worker sustainability.”
DG:
What are we seeing when we see like a whole field of onions that the farmer is saying that they’re going to have to burn or-
MW:
Yeah.
DG:
And then the common thing is you see there’s so many food banks that need food, and yet there are all these onions that are in the middle of the country, and-
MW:
Yeah. It’s disturbing.
A big part of the reason why they’re doing that for one is it’s they need food, but they’re like unit economics associated with picking them, versus plowing the back in. So a lot of big... like you think about like the small onion farmer as like the paradigm, but the reality is, is these companies are controlled by huge agricultural corporations that are directing basically sharecroppers to plow their onions back in, because it’s too expensive to pick them.
So that’s primarily what we’re seeing. And the effect of that is essentially they’re volatizing carbon, and they’re leaving a bunch of barren soil. So they’re making it a commercial commodity system even worse. The reason why they’re doing that is that the demand in the industrial food system for commercial supply of those onions, or spinach, or whatever at the low level being just not organic, no claims whatsoever, that’s going maybe to like one of the big food service companies in America, there is no demand for that now. Grocery shoppers want to buy higher attribute foods in general, and those don’t meet the qualification. So what you’ll see is, “Just till it back in, it’s expensive to deal with.”
DG:
And one of the reasons we’re seeing more so in the meat, but shelves that are not stocked and then they’re figuring it out, and starting to be able to stock them is those larger companies are figuring out how to skip their purveyors, and go to grocery stores directly?
MW:
Yeah. So think about this. Most people have never seen what you call a combi bin of meat. But the way that most meat is distributed in the country to these big industrial manufacturing operations is a 2000 pound cardboard tote that sits on a pallet, and takes up the whole pallet. So it’s not like individually boxed. It’s not even like a 40 pound box of meat that somebody can lift and move. So just imagine a grocery store could never receive a 2000 pound box of meat. It would be impossible.
DG:
Right.
AK:
I think that’s what is happening with the dairy too. We’re seeing all the dairy getting poured out, and it’s because it’s supposed to go in certain containers, and now it needs to go in these gallon jugs for the grocery store. And they’re just not prepared for that.
MW:
All of that has to go to get pasteurized and bottled. And that system is just not set up for that. And the plants that are doing packaging right now are all at capacity.
DG:
How is a company like yours... You’re vertically integrated, you have everything under one roof. Why are you a safer bet during a time like this? Because if someone in your factory got sick, then you’d have to shut the whole thing down as well. Or are you claiming that having a lot of smaller operations is just having a more diversified portfolio? So if one goes down, it doesn’t shock the whole system?
MW:
Well both of those are true. But to speak to the first part of it, these plants that are shutting down, aren’t shutting down because one person’s getting sick, they’re shutting down because like 600 people are getting sick and there are people dying.
And they’ve know that for weeks and weeks and weeks. They’ve been working with USDA to try to figure it out. So there are cases where people were going to work and bringing their own masks, and supervisors were telling them to take their masks off.
DG:
Right. I saw people being tested, testing positive, or at least having an insanely high fever, and the management team telling them to keep working.
MW:
Yeah.
So in our case, like if you have a smaller operation with a few hundred people, as opposed to a few thousand people, for one if there’s a group of folks who get sick... and look, nobody’s completely impervious to this virus, it could happen to anyone, it could happen to me, it could happen to anyone. So if people in our facility gets sick, you have to manage those people and you have to have backup plans. And it’s a lot easier to have backup plans when you’re dealing with like a dozen people or two dozen people in a bad scenario, and you tell them to go home, and you are preventative, and prophylactically get ahead of the problem.
And again, nobody’s immune to this. We’ve had people who have had like a cousin or something who knew they were sick, and we’ve just proactively told them to stay home for two weeks just to make sure they didn’t have it. And I think that’s, what’s kept it out of our facility to date.
And additionally, like a big thing that nobody really talks about is childcare. There are a lot of these plants where folks don’t have childcare and they’re going home. And even though they’re supposed to be on lockdown, they have to pick up their kids, and they have to find solutions for that.
And one of the important things I think that we were able to do, and some other folks have been able to do in smaller places is help folks out with their kids. If you have to have a group of families where somebody stays home and you pay them to watch one group, where you’re not intermixing with a lot of folks, that’s really helpful. It’s following the rules of what we’re supposed to be doing right now. But also in a small setting, that’s a lot easier to manage because it might be like five or six people instead of like 500 people that you have to manage all of a sudden.
AK:
How does that work? You guys are facilitating child care?
MW:
It’s kind of informal, but we’ve had some folks come to us and say, “Hey, we have kids. We don’t know what to do right now.”
And we just said, “Okay, well somebody should stay home and we’ll continue to pay you. And you can watch the kids. And that way everybody feels safe, and you can still come to work.”
So I think that’s a really good solution. Like in small plants you can develop social solutions that are reasonable and fair to the employees and also keep people fed. And I think all of that’s really important.
AK:
So longterm, what should consumers expect? Should they expect meat shortages at the grocery store or takeout restaurants they’re going to? Or is this going to be a temporary blip?
MW:
I wish I had a crystal ball. I don’t think people should freak out, for one. I do think obviously the calories are out there in terms of food, and people are smart and they figure things out. And like our, our business went from 50% food service going into restaurants and caterers and stuff, and 50% retail, to 100% percent retail pretty much overnight, because we have packaging equipment we can do that, but not everyone can do that.
But I do think that what we saw in the early days was a mass effort to try to get food onto the shelves. And I think we’re still seeing that. To me, just from what I’m experiencing in the industry, the bubble of craziness seems to have popped a little bit, and it’s still a lot of demand, but it definitely feels a little bit more stable.
That being said, Wendy’s announced yesterday they’re taking hamburgers off their menu in a bunch of places. And I don’t know if that’s like a shortage consideration, or a pricing consideration, or their independent supply chain; it’s not really clear. But there might be things that are short for a period of time, and they come back. But I don’t think anybody’s going to, from a supply chain standpoint, go hungry.
I think the bigger problem is economically people are losing their jobs so they can’t afford food. The restaurant workers, which encompass six times the number of employees in the airline industry still have not received a penny from the federal government.
AK:
What are your grocery partners telling you?
MW:
It’s interesting. They have been very nimble, and they’ve been quick to adopt where they’re getting shortages from their traditional retail channels, food service suppliers that have traditionally supplied restaurants, and they’ve adopted I’d say more diverse practices in their procurement, and have been open to servicing the community of buyers in a more thoughtful way.
And that’s been actually nice to see. We’ve seen on the consumer end of things, more thoughtful buying and more consideration towards, like for example, our chicken is a lot higher in attribute. It’s pasture-raised heirloom chicken, which is not something you see everywhere. And the velocity of that overall has been positive in that consumers are picking things that are better quality. And I’ve heard that across supply chain generally speaking.
And it goes back also to 2008, there are some studies done about like even during a recession, people tend to choose better quality foods, and foods that are grown with more care. And it sort of is a little bit of a strange paradox that in one end, like people have less money to spend on groceries, but they’re choosing better things that are healthier.
And I think that bodes also to the way that buying and share of wallet internationally takes place. In Europe, for example, and in most countries you see share of wallet for food as a much higher percentage than in the US where we’re almost the lowest country in the civilized world, where we spend less money per capita on food than almost anyone else.
AK:
Some people say that meat can be a source of a pandemic. It wasn’t the source necessarily of this one. But if you have industrial agriculture, it is not the safest, and pandemics can arise from these situations. Can you speak to that? Have you heard that?
MW:
No, they can. And they do. And they have.
And not specifically coronavirus, but we do think that coronavirus was transmitted from animals. And all of these diseases, MERS, SARS, H1N1, African swine fever virus, which is so far just a pork virus, but who knows in the future what could happen-
DG:
Right.
MW:
So the biggest problem, again going back to genetics, is that these breeds of animals, specifically pork and chickens, and honestly, chickens are the worst out of all of them, are so bred to only focus on feed conversion. There is a percent of an animal’s developmental process, genetically speaking, that when it’s growing, and when it’s eating high quality feed, and when it’s growing slowly, that puts energy into building a strong immune system. Just like a person with a compromised immune system, these animals are genetically bred with compromised immune systems.
And it’s because a hundred percent of their energy is focused on converting feed into muscle that is extra cheap. The problem is, is when you have literally billions, and billions, and billions of livestock animals in concentrated feed lots, in CAFO environments up against parts of the world in the US or overseas that have wild animals, and wild animal can come in to infect a chicken or a pig, and that virus can then spread through these animals. Which are essentially, it’s like sugar, water and yeast, they’re Petri dishes. They’re literally Petri dishes and disease vectors, and they become endemic within those animal populations. And it only takes, it’s literally a formula of a MWer of time of so many billions of replications of a virus before it mutates, and has the ability to jump to people. And we know this as a fact because it’s happened over and over and over again, and it will happen again, like with certainty.
That’s why breed is so important. When you have a breed of animal, a heritage line animal, or a better bred animal, that’s slower growing that has some ability to fight off infection, some animals might get sick, but then there are animals that are healthier that will be able to stop it, and stop that infection from spreading to other species.
And that’s why it’s so important to consider livestock’s overall wellbeing. We’re not just buying healthy chickens or pigs because they go outside, and because they have a better quality of life, that’s really, really important; but we’re also buying them because they’re healthier and they can live healthier lives, and they’re also creating food safety and food security globally.
DG:
But also it’s like lighting the fuse, if you were to infect a cow at the beginning of one of these lines where they’re all packed in so densely... what would it take, a few hours, or few days for it to go shoot through? Like, they’re just-
MW:
Yeah. The confined spaces really are the biggest promoted in pork and cattle hormone use in ractopamine, which are growth promotants. And the reason why cattle are given hormones, they can grow more quickly because they’re put on these feed lots and fed corn and soy feed, and cattle are ruminant animals. They’re meant to digest celluloid material in the form of grass, and then ferment that in their rumen, and that fermentation creates a simple sugar that they turn into bone and muscle.
So chickens are not allowed to be given hormones in the United States, but the CAFO environment of chickens creates a lot of sickness and mortality, which is why they’re fed antibiotics sub-therapeutically. So there’s different reasons why different kinds of animals in different animal systems have problems, but they’re all problematic in that, you’re right, this concentration creates the overuse of pharmaceuticals.
And that goes to another very important point, which is human disease resistance. A lot of folks think that we just have unlimited antibiotics. We’re very quickly running out of human antibiotics that we need to treat people for. And this could be like a blip in the map where we have these miracle cures for bacterial diseases in the form of antibiotics.
But 70% of pharmaceutical antibiotics globally are administered to animals. Only 30% is for human use and for other use. So when you talk about disease resistance, you can actually swab a pork chop, a conventional pork chop, and you’ll find antibiotic-resistant bacteria on that piece of meat.
AK:
Jesus!
MW:
And that’s because these bacteria have become endemic within these livestock populations. And that’s a problem because you can actually cross-contaminate that meat in your kitchen, ingest it, and you can develop antibiotic resistant bacteria in your body. So next time you get an infection that could become a problem for you. And that’s what we’re seeing in ERs across the country.
DG:
Well, that’s also exciting.
AK:
Jesus.
MW:
Pardon my French, but it’s getting fucking scary.
AK:
So what can consumers do to be better when they’re at the grocery store, what should they be looking out for? What should they be doing?
MW:
Don’t worry if it costs an extra 25 cents, choose something that’s slower growing. Think about breed, buy for breed first.
DG:
But how do we even know?
MW:
If it says heritage or heirloom on it, it’s probably a safer bet. G.A.P. Step Four is one method of looking at things. Buy foods that are at least certified humane. ASPCA Shop With Your Heart is a label that’s a little bit better. These are all slightly imperfect, but all really good indicators of things that are higher level. And it at least moves the needle in that direction.
So don’t believe label claims like, “Natural,” that actually literally means nothing at all. Organic, in terms of meat doesn’t necessarily mean anything like an organic chicken, for example, could still be grown in a CAFO environment. And a lot of that feed is actually coming up as soy meal from Brazil, from deforested jungle, from rainforest that was burned down to grow soybeans. Not a lot of organic feed in America. So we’re trying to convert American land to organics. So don’t, that’s not like the benchmark. But pasture-raised, grass-fed, G.A.P. Four, certified humane, Shop With Your Heart. Those are the ones I would look for.
DG:
Just because it’s a favorite thing of mine, how are people cheating the grass-fed label these days?
MW:
Oh God. I mean, since the beginning of time. Like you can go to some places in different parts of the world where it’s called grass-fed, and animals are fed pelletized corn silage with coconut husks.
AK:
Jesus!
MW:
Because corn is a grass technically. If at all possible, if you can indicate what kind of breed your animals are and inquire where you’re buying, and ask your grocer... I guarantee you, all the people who are listening to this, if five million people go out and ask their grocers, “What breed of animal is this?” Those buyers will all kick it up the chain, and people will start inquiring about that. Breed is really everything when it comes to husbandry.
DG:
Well, thank you so much for taking the time, and thank you for assuming that our audience was five million people.
AK:
I was going to say the same thing. Yeah. Thank you for terrifying us more than we already are.
MW:
There’s hope!
AK:
Yes.
DG:
So Cooks Venture Chicken?
MW:
Yes. Cooks Venture, cooksventure.com.
AK:
Cool. Well thank you so much for your work and for telling us about all this stuff.
MW:
Yeah. Thank you. And thanks for being so considerate, and bringing this to your listeners.
AK:
Of course!
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