An abundance of corn and soybeans means grocery store prices for beef and pork have gone down—but not so for chicken. The New York Times delves into controversy surrounding the Georgia Dock, a chicken pricing index compiled by the Georgia Department of Agriculture that is "widely used" by grocery stores when they purchase chicken. This week, the Georgia Dock priced a 2.5- to 3.5-pound chicken at $1.10 a pound. While that's 5% lower than the price 18 months ago, compare that to other pricing indexes: The Urner Barry index lists that size chicken at 72 cents a pound (33% lower than 18 months ago) and the federal Department of Ag lists it at 71 cents a pound. Some investors say the way the Georgia Dock is put together is keeping chicken prices higher than they should be. The Wall Street Journal reported in January that there was concern chicken companies held too much sway in putting the index together.
The Georgia Dock is put together by one employee, who calls facility managers at 10 of the 11 poultry processors in the state. They tell him how much per pound chicken sold for that week. But critics say the state's two biggest producers, Tyson and Pilgrim's Pride, are given too much weight in the index, and that the department doesn't do enough to verify the prices it's given. Indeed, Georgia's agriculture commissioner recently admitted to the Department of Ag that it does not, and would not, verify the prices, leading the USDA to stop including the Georgia Dock on its weekly report of poultry prices. In contrast, the USDA and the Urner Barry talk to buyers, sellers, distributors, and others involved in selling chicken in order to get their prices—prices that help lower the amount restaurants are paying for chicken, while the Georgia Dock figures only benefit chicken producers. Check out the Times for more. (Read more chicken stories.)