I assume (not knowing anything about the industry), is that there is a ton of capital required to enter the market. Combine that with a substantial amount of regulation and it is a difficult market to get into. Besides, even if you did join, you are better off selling at the "monopoly" price even if you don't sell all of your product.

Can confirm on the regulatory aspect - factory farms are terribly difficult to get cities to approve zoning for.

Well of course you sell at the monopoly price, thats why you entered the market in the first place. I would not think the capital would be particularly outsized compared to similar venture.

Except you would sell more if you were undercutting the competition pricewise.

You'd sell more, until the competition lowered their prices to compete. At that point, everyone in the industry (including yourself) would be making less profits. Great for consumers, bad for your business.

Easier said than done.

If a group of big players are keeping the price high artificially then it will be easy for them to drop the price until the "startup chicken ranchers" go out of business. I'm sure there are economies of scale involved, and they can probably drop to the true market price while still keeping a better profit margin than the startup chicken farmers.

>So what, then, has prevented new startup chicken ranchers from popping up all over the US to capitalize on the overpricing?

Capitalism. Which is less about "free trade" and disruption, and more about big players securing any niche for themselves as best as they can (government regulations not required for that either -- they can also do it with buying out smaller competitors to prevent disruption, dividing the market between themselves and forging cartels, playing retailers against one another and taking advantage of their economies of scale, undercutting on price while smaller competitors die and then jacking it, etc).

Huge economies of scale, existing relationships, need for a lot of startup capital, likely local resistance to establishing a meat-packing plant, etc.

Cause startups are not the answer to everything. Find me a VC who's willing to invest in a chicken ranch, and maybe I'll change my tone.

The Buffett family (yes, that Buffett family) is big into farming. While grain seems to be more up their ally, operating several thousand acres of corn and soybeans, expansion may be appealing to them. Warren's grandson's VC firm is known to invest in progressive agriculture-related businesses. If the right opportunity arrived, I don't see why they wouldn't take up the opportunity.

And if we are willing to be lenient on what VC means, Warren's son is known to have invested in chicken ranches for humanitarian reasons.