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Consolidation In U.S. Meatpacking

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Author Info
MacDonald, James M.
Ollinger, Michael E.
Nelson, Kenneth E.
Handy, Charles R.
Abstract

Meatpacking consolidated rapidly in the last two decades: slaughter plants became much larger, and concentration increased as smaller firms left the industry. We use establishment-based data from the U.S. Census Bureau to describe consolidation and to identify the roles of scale economies and technological change in driving consolidation. Through the 1970's, larger plants paid higher wages, generating a pecuniary scale diseconomy that largely offset the cost advantages that technological scale economies offered large plants. The larger plants' wage premium disappeared in the 1980's, and technological change created larger and more extensive technological scale economies. As a result, large plants realized growing cost advantages over smaller plants, and production shifted to larger plants.

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Publisher Info
Paper provided by United States Department of Agriculture, Economic Research Service in its series Agricultural Economics Reports with number 34021.

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Date of creation: 2000
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Handle: RePEc:ags:uerser:34021

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Keywords: Concentration; consolidation; meatpacking; scale economies; structural change; Industrial Organization; Livestock Production/Industries;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gallant, A. Ronald & Jorgenson, Dale W., 1979. "Statistical inference for a system of simultaneous, non-linear, implicit equations in the context of instrumental variable estimation," Journal of Econometrics, Elsevier, vol. 11(2-3), pages 275-302. [Downloadable!] (restricted)
  2. Baltagi, Badi H & Griffin, James M & Rich, Daniel P, 1995. "Airline Deregulation: The Cost Pieces of the Puzzle," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 245-60, February. [Downloadable!] (restricted)
  3. Edward C. Kokkelenberg & Donna R. Sockell, 1985. "Union membership in the United States, 1973รป1981," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 38(4), pages 497-543, July.
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  1. Siebert, John W. & Nayga, Rodolfo M., Jr. & Thelen, Gina C. & Kuker, Don, 2000. "Enhancing The Financial Performance Of Small Meat Processors," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 3(03). [Downloadable!]
  2. Brester, Gary W. & Marsh, John M., 2001. "The Effects Of U.S. Meat Packing And Livestock Production Technologies On Marketing Margins And Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(02), December. [Downloadable!]
  3. Lee, C. & Schluter, G., 2001. "Consolidation, Economies Of Scale, And The Heckshcer-Ohlin Theory Of Trade - An Empirical Analysis Of Us Meat Processing Industry," International Trade in Livestock Products Symposium, January 18-19, 2001, Auckland, New Zealand 14559, International Agricultural Trade Research Consortium. [Downloadable!]
  4. Davis, David E. & Schluter, Gerald E., 2005. "Labor-Force Heterogeneity as a Source of Agglomeration Economies in an Empirical Analysis of County-Level Determinants of Food Plant Entry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(03), December. [Downloadable!]
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  5. Ward, Clement E., 2002. "A Review of Causes for and Consequences of Economic Concentration in the U.S. Meatpacking Industry," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 03. [Downloadable!]
  6. Leroux, Nicole & Wortman, Max S., Jr. & Mathias, Eric D., 2001. "Dominant Factors Impacting The Development Of Business-To-Business (B2b) E-Commerce In Agriculture," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 4(02). [Downloadable!]
  7. Hegde, S. Aaron, 2004. "An Economic History Of The Failure Of Broiler Futures," 2004 Annual meeting, August 1-4, Denver, CO 20397, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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