Of the three primary indexes - the Georgia Dock, Urner Barry index, and the index compiled by the Federal Department of Agriculture (FDA) - used to help set chicken prices, two of them hovered around $0.72 a pound at the end of October. The Georgia Dock index, however, was at $1.10 a pound. This 30 percent gap recently came to the surface and has prompted investors to pose serious questions
As reported by the Washington Post, a significant portion of chicken sold to retailers is based on the Georgia Dock price. Every week Arty Shronce makes a calculation that gives big retailers - such as Walmart and Safeway - an average price for a pound of chicken.
Are chicken prices artificially high?
Where does this high diversion in price come from? It turns out that there’s a reason for this. While the Urner Barry index and the index compiled by the FDA are working to validate the information they get from chicken producers, Georgia Dock does not.
Today, the Georgia Dock index is based on data from 10 of the 11 companies that process poultry in the state. Once a week, Schronce calls facility managers to retrieve information to set the average price per pound of poultry sold.
But how correct are the calculations of a gardening blogger who, according to critics, does not do enough to verify the data he receives. Furthermore, two of the largest American chicken producers - Pilgrim’s Pride and Tyson Foods – seem to have too much sway over how the Georgia Department of Agriculture calculates the chicken price index.
So if the largest chicken producers are telling the Georgia Dock which prices they should use and the information isn’t properly verified, there is a good chance that the prices of chicken meat are artificially high.
Also, data shows that most of the chicken consumed by Americans comes from supermarkets who generally use the Georgia Dock index, so the chances are high that you are paying a lot more for your chicken then you should. (RELATED: Discover more news about fresh food ingredients at Fresh.news)
Georgia Dock doubts itself
Maybe the most remarkable thing about the whole chicken price story is that it was Arty Schronce himself to blow the whistle on his own pricing index. In a memo written to the Georgia Department of Agriculture, he said that he had come to "question the validity of some of the information provided" by local chicken producers. Furthermore, he honestly stated that his training was inadequate, inconsistent, and sometimes in error. Furthermore, he noted that the companies he was required to survey were sometimes unresponsive.
“I often received lackadaisical and rude responses to my requests for information,” Schronce wrote. Sometimes his calls were not returned, or the companies simply responded to his price questions with “just keep ’em the same.”
According to Schronce, it was not the first time he voiced these concerns. He said that he takes his job very serious. However, he noted that it is no longer in his power to do it adequately and blames the Georgia Department of Agriculture and the reporting poultry companies for the misleading prices.
In their defense, McPeake, of the Georgia Department of Agriculture, said a review process began in December 2015 after “serious concerns” emerged. She added that even though Schronce’s training “may have been abridged due to unfortunate and unforeseen circumstances, every effort was made to ensure that he was indeed trained on some level.”
As stated by The Wall Street Journal, Georgia Dock has apparently responded to their shortcomings and will require companies to submit additional data to verify the accuracy of the information.
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