RobertMac, before I get into the Wal-Mart thing, there is one thing I forgot to say in my last post. That is, a company dealing in commodities, as a rule, has more opportunity to affect the cost of a commodity being sold than the selling price. There are many ways to affect the cost, and that is why I believe Tyson will concentrate on that end. They have to do something fast, and playing games to try and influence commodity selling prices won't get it done.
Now, besides the fact that they are both headquartered in Northwest Arkansas which may carry some "neighbor and good friend" factors into the relationship, I believe that a company like Wal-Mart which carries so many different items from so many different suppliers is always looking for a way to minimize the number of suppliers they have to deal with. This reduces things like the number of payable entries that have to be made, the number of checks cut, the number of electronic transfers made and the number of people their buyers have to talk to (thus, reducing the number of buyers on the payroll).
Tyson is a large company with a large offering. Just the kind of supplier that Wal-Mart loves. Plus, Tyson has a good reputation for quality, and they do a lot of advertising of their own products. Once again, just the kind of supplier that Wal-Mart loves. The folks in Arkansas probably say it is a match made in heaven.
Large accounts (especially Wal-Mart) normally qualify for large pricing discounts. Wal-Mart is certainly in that category. A lot of suppliers look at Wal-Mart as the account that supplies a base amount of business for their plants, etc., and that covers the overhead. The smaller customers who have to pay more per unit are the ones who contribute the profit.
Econ likes to say "It's a concentration game." I say that the concentration is a normal progression in the competition game. Wal-Mart is competing. Tyson is competing. We are all competing, and according to the poll I did on this forum, 100% of the respondents said that competition is a good thing.
There will always be things to work on to keep people honest and keep the playing field level to the best of our ability, but the basic laws of capitalism and free enterprise support competition and concentration to a point, but they also support opportunity to do something better. Look at GM and Ford and Chrysler. When it got down to the "Big 3", did they rule the world after that? No! Now Toyota is destined to be #1, and the more hourly workers who accept the current buyout at GM (already over their goal), the quicker it is going to happen.
President Bush, in a speech that included the issue of American car manufacturers, said, "They are going to have to learn to compete." I guarantee that President Bush and the American people are not ready to throw in the towel on capitalism and free enterprise.