Chicken Producers Have Own 'Moneyball' --- Data provider says it helps make meat more affordable, but not everyone agrees.

 

"When Brian Snyder looks at a bag of chicken nuggets, he doesn't see dinosaurs. He sees numbers -- data detailing the nutrition and quantity of the feed the birds ate, and how much it cost for workers to slice each pound.

Snyder runs a company that has become a critical player in the meat industry, despite raising no livestock and running no plants. The company, Agri Stats, gathers and synthesizes reams of data that it uses to help meatpackers make decisions based on spreadsheets, versus managers' gut instincts.

"We do measure thousands of metrics," said Snyder in an interview. "We sit back there, and we try to find where people have natural strengths and opportunities."

The firm's approach has been described as the "Moneyball" of the meat industry, referencing the Michael Lewis bestseller and Oscar-nominated film about data analysis revolutionizing baseball. 

Agri Stats and poultry industry executives say its numbers-crunching service boosts efficiency and helps keep prices low for consumers.

Others say Agri Stats does the opposite, serving as a vehicle that has allowed meat and poultry companies to coordinate operations and push up prices.

The Justice Department alleged in a federal antitrust suit filed this fall that meat-industry executives use Agri Stats to glean details about rivals' supplies illicitly and scale back production to keep profits high.

A number of restaurants, food distributors and grocery stores including Walmart, Kroger and McDonald's have sued Agri Stats in recent years, making similar allegations. Since 2016, the company has been the subject of more than 100 lawsuits.

"They kept an eye on each other through Agri Stats," said Brian Clark, a lawyer representing chicken-buying consumers, arguing a case against a separate poultry company in October. "Those cuts led to record profits."

Agri Stats is fighting the charges. Its executives say its reports don't show clients how much chicken their competitors produce or prices a company plans to charge. Plaintiffs argue that Agri Stats data, such as the number of egg-laying hens a company is placing on its farms, enables savvy readers to gauge rivals' future production and that companies don't use Agri Stats reports to lower prices.

Agri Stats is based in Fort Wayne, Ind. Its executives say the company, since its inception in the 1980s, has helped chicken become America's most-consumed meat by making production more efficient.

Agri Stats accountants and auditors collect and sort data on everything that goes into raising and slaughtering poultry, and processing and selling meat. Subscribing to Agri Stats' reports requires client companies to upload data on their operations to the company.

A result is granular information that industry executives say other data services can't match. Companies can spend more than $1 million annually to receive Agri Stats' six different books published each month. Chicken companies -- and at one time turkey and pork processors -- have used the data to compare their performance with the rest of the industry.

Its client list has at times included 97% of the roughly $60 billion U.S. chicken industry and 80% of pork processors.

Agri Stats said it helped one chicken company save $20 million a year on one plant after determining that the facility was spending too much on utilities such as water and that workers were leaving too much meat on the bone as birds moved down the processing line.

"We help people get better at what they're doing, and they may not know that they're bad at something until they dig into the numbers," said Eric Scholer, vice president of Agri Stats.

Recently its business has been shrinking. Tyson Foods, the biggest U.S. meat supplier, dropped Agri Stats' data reports earlier this year, but is still a customer for some of its other services, according to industry officials. Tyson declined to comment on why it pulled out.

Agri Stats discontinued its reports on the turkey and pork industries in 2019 when companies began dropping its services after the lawsuits against it increased.

While other industries have their own information-sharing services, Agri Stats provides a level of information that goes beyond legal bounds, plaintiffs' lawyers and the Justice Department said. Six state attorneys general have joined the government's case since it was filed.

In a 2016 presentation about how it used Agri Stats, the agribusiness giant Cargill said the data gave "industry insight into competitor's pricing," according to the Justice Department's suit. A Tyson employee stated that he instructed his team to "stay ahead" of other processors' price increases by using Agri Stats, the DOJ's suit alleged. The companies declined to comment.

Agri Stats' reports don't identify specific competitors' plants. One of the government's key allegations is that meat-industry officials can decipher which company owns individual facilities, giving them crucial information about their rivals.

In court depositions, chicken-company employees have said they could identify some competitors' profits by cross-checking quarterly securities filings, bankruptcy documents and other industry publications that publish market share information.

Agri Stats maintains that its service is above board. Its reports detail a prior month's or week's activity, and don't indicate what a company is going to do in the future, the company says.

Chicken-company executives and lawyers say it is nearly impossible to decode every part of Agri Stats' reports." [1]

This is a perfect way to steal money from consumers, since it is data-based. We "should" do this in Lithuania too. Everything that smells badly is done in Lithuania.

1. Business News: Chicken Producers Have Own 'Moneyball' --- Data provider says it helps make meat more affordable, but not everyone agrees. Thomas, Patrick.  Wall Street Journal, Eastern edition; New York, N.Y.. 14 Dec 2023: B.3.