The Effect of Farm Supply Shifts on Concentration and Market Power in the Food Processing Sector
Abstract
In this paper we examine the marginal impact of changing farm supply on the market structure of the downstream food processing sector. We develop a theoretical model that allows for cost differences among processors and endogenizes downstream entry and exit. Comparative statics results are consistent with several well-established trends in the food processing sector. In particular, the analysis demonstrates that increasing concentration in the food processing sector is consistent with decreasing market power. Indeed, we find that when the farm supply curve shifts outward, an increase in concentration can only occur when there is a decrease in market power. Copyright 1997, Oxford University Press.Download Info
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Bibliographic Info
Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 79 (1997)
Issue (Month): 2 ()
Pages: 524-531
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Nicolas Gruyer & Philippe Bontems, 2006.
"When cost improvements harm consumers,"
Economics Working Papers
03, LEEA (air transport economics laboratory), ENAC (french national civil aviation school).
- Philippe Bontems & Nicolas Gruyer, 2007. "When cost improvements harm consumers," Review of Industrial Organization, Springer, vol. 30(1), pages 63-79, February.
- Hudson, Darren, 1998. "Intra-Processor Price-Spread Behavior: Is The U.S. Catfish Processing Industry Competitive?," Journal of Food Distribution Research, Food Distribution Research Society, vol. 29(2), July.
- Bontems, P. & Bouamra-Mechemache, Z., 2004.
"Predatory accomodation in vertical contracting with externalities,"
Economics Working Paper Archive (Toulouse)
200402, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
- Bontems, Philippe & Bouamra-Mechemache, Zohra, 2003. "Predatory Accommodation In Vertical Contracting With Externalities," 2003 Annual meeting, July 27-30, Montreal, Canada 22044, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Nene, Gibson & Azzam, Azzeddine M. & Schoengold, Karina, 2009. "Environmental Regulations and the Structure of U.S. Hog Farms," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49395, Agricultural and Applied Economics Association.
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