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Explaining Plant Exit in the U.S. Meat and Poultry Industries

Author

Listed:
  • Muth Mary K

    (Research Triangle Institute, Research Triangle ParK, North Carolina, USA)

  • Wohlgenant Michael K

    (Department of Agricultural and Resource Economics, North Carolina State University, Raleigh, North Carolina, USA)

  • Karns Shawn A

    (Research Triangle Institute, Research Triangle ParK, North Carolina, USA)

  • Anderson Donald W

    (Research Triangle Institute, Research Triangle ParK, North Carolina, USA)

Abstract

Recent U.S. pathogen reduction and HACCP food safety regulations, which increased the costs of producing meat and poultry products, may have affected the rate of plant exit during the 1996 to early 2000 time period over which the regulations were implemented. We estimate and compare probit models for U.S. federally inspected meat slaughter (920 plants), poultry slaughter (280 plants), and meat and poultry processing-only (4,300 plants) plants to determine which factors most contributed to the probability of plant exit. The factors we consider include plant-level, company-level, and regional-level characteristics and regional supply conditions. Although plant size affected the probability of exit for slaughter plants, it did not affect exit for processing-only plants. Other variables, such as measures of market structure and competition, have different effects for each of the industries.

Suggested Citation

  • Muth Mary K & Wohlgenant Michael K & Karns Shawn A & Anderson Donald W, 2003. "Explaining Plant Exit in the U.S. Meat and Poultry Industries," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-23, January.
    • Handle: RePEc:bpj:bjafio:v:1:y:2003:i:1:n:7
    DOI: 10.2202/1542-0485.1022
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    References listed on IDEAS

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    1. B. L. Gardner & G. C. Rausser (ed.), 2001. "Handbook of Agricultural Economics," Handbook of Agricultural Economics, Elsevier, edition 1, volume 1, number 2.
    2. S McCorriston & CW Morgan & AJ Rayner, 2001. "Price transmission: the interaction between market power and returns to scale," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(2), pages 143-159, June.
    3. Hayenga, Marvin L., 2000. "Meat Packer Vertical Integration and Contract Linkages in the Beef and Pork Industries: An Economic Perspective," Staff General Research Papers Archive 10564, Iowa State University, Department of Economics.
    4. B. L. Gardner & G. C. Rausser (ed.), 2001. "Handbook of Agricultural Economics," Handbook of Agricultural Economics, Elsevier, edition 1, volume 1, number 1.
    5. John M. Antle, 2000. "No Such Thing as a Free Safe Lunch: The Cost of Food Safety Regulation in the Meat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 310-322.
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    Cited by:

    1. Adalja, Aaron & Lichtenberg, Erik, 2018. "Produce growers’ cost of complying with the Food Safety Modernization Act," Food Policy, Elsevier, vol. 74(C), pages 23-38.
    2. Glynn T. Tonsor & Ted C. Schroeder & Joost M. E. Pennings & James Mintert, 2009. "Consumer Valuations of Beef Steak Food Safety Enhancement in Canada, Japan, Mexico, and the United States," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(3), pages 395-416, September.
    3. Tengying Weng & Tomislav Vukina & Xiaoyong Zheng, 2015. "The Effects of Productvity and Demand-Specific Factors on Plant Survival and Ownership Change in the U.S. Poultry Industry," Working Papers 15-20, Center for Economic Studies, U.S. Census Bureau.

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