The market for chicken parts

 Can the wholesale food market come to resemble the modern retail financial market?  The WSJ has the story.

Trading Chicken Feet Is Going Digital. For giants like Tyson, moving millions of pounds of meat from farmers to vendors still requires phone calls, spreadsheets and middlemen  By Julia-Ambra Verlaine

"For agricultural giants like Tyson Foods Inc., moving millions of pounds daily of meat and poultry products from farmers to vendors world-wide still requires phone calls, spreadsheets and personal relationships with middlemen who take a cut. Brokers fees can add up, and it is hard to get reliable up-to-the-minute pricing information. Unlike other markets, inventory and supply aren’t available on a centralized database.

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"Scott Spradley, chief technology officer at Tyson, the second-largest processor of chicken, beef and pork in the U.S., said large transactions with some external partners still require a fax machine. To fill a supermarket order for chicken, salespeople need to call warehouses peppered across the country. Improving the technology could ultimately bring down the cost of processing and distributing food across the country.

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"The more middlemen involved, the higher the cost. Before a steak ends up on an American dinner table, it goes through slaughterhouses that process and package the meat. While large retailers like Costco Wholesale Corp. or food chains like McDonald’s Corp. have direct contracts with producers at fixed rates, small restaurants and local suppliers have to go through protein brokers including Louis Dreyfus Co., or redistributors such as NebraskaLand.

“It’s an archaic industry that relies on an old-boy network, a bit like foreign exchange in the 1980s,” said Mr. Honey. “We are trying to cut the fat out that brings the price up.”

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"Companies like Nui, populated with former traders, are seeking to build streaming platforms that centralize supply and give access to smaller players at better prices. Industry publisher Urner Barry is like a Bloomberg in the meat, fish poultry industry—providing data, news and market pricing on lamb, pork, turkey, eggs and more.

"Urner Barry, founded in 1858, upgraded its electronic platform called COMTELL over a year ago. It supplies brokers, restaurateurs and supermarkets with prices on over 15,000 products ranging from chuck roll to West Coast chicken drumsticks.

“Unlike the past, people are coming into this industry that have a finance background,” said Russell Barton, a COMTELL director at Urner Barry. “They are treating the meat and poultry markets like analysts treat the stock market. They aren’t content with a static price sheet.”

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One of the companies mentioned in the WSJ story is the New Zealand based Nui (https://www.nuimarkets.com/our-platform/)