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Market and Cost Structure in the U.S. Beef Packing Industry: A Plant-Level Analysis

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  • Catherine J. Morrison Paul

Abstract

A resurgence of consolidation in the U.S. meat packing industry in the past few decades has stimulated academic and policy debate. Issues raised include the role of cost economies in driving these patterns, and the effects on the agricultural sector (cattle producers) from market power. Here, plant level cost and revenue data for U.S. beef packing plants are used to estimate a cost-based model incorporating cattle- and output-market pricing behavior. The robust results indicate little market power exploitation in either the cattle input or beef output markets, and that any apparent evidence is counteracted by cost efficiencies such as utilization and scope economies. Copyright 2001, Oxford University Press.

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  • Catherine J. Morrison Paul, 2001. "Market and Cost Structure in the U.S. Beef Packing Industry: A Plant-Level Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 64-76.
  • Handle: RePEc:oup:ajagec:v:83:y:2001:i:1:p:64-76
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    File URL: http://hdl.handle.net/10.1111/0002-9092.00137
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    Cited by:

    1. Boonsaeng, Tullaya & Wohlgenant, Michael K., 2006. "The Demand for Livestock by the U.S. Meat Processing Industry," 2006 Annual meeting, July 23-26, Long Beach, CA 21120, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Adjemian, Michael & Brorsen, B. Wade & Hahn, William & Saitone, Tina L. & Sexton, Richard J., 2016. "Thinning Markets in U.S. Agriculture," Economic Information Bulletin 232928, United States Department of Agriculture, Economic Research Service.
    3. Nguyen, Duong T.M. & McLaren, Keith Robert & Zhao, Xueyan, 2008. "Multi-Output Broadacre Agricultural Production: Estimating A Cost Function Using Quasi-Micro Farm Level Data From Australia," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6009, Australian Agricultural and Resource Economics Society.
    4. Cohen, Jeffrey P. & Morrison Paul, Catherine J., 2001. "Public Infrastructure Investments, Costs, and Inter- State Spatial Spillovers in U.S. Manufacturing: 1982-1996," Working Papers 190898, University of California, Davis, Department of Agricultural and Resource Economics.
    5. Gopinath, Munisamy & Sheldon, Ian M. & Echeverria, Rodrigo, 2007. "Firm Heterogeneity and International Trade: Implications for Agricultural and Food Industries," Trade Policy Issues Papers 9349, International Agricultural Trade Research Consortium.
    6. Pritchett, James G. & Thilmany, Dawn D. & Johnson, Kamina K., 2005. "Animal Disease Economic Impacts: A Survey of Literature and Typology of Research Approaches," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 8(01).
    7. Catherine Morrison Paul, 2003. "Productivity and Efficiency Measurement in Our “New Economy”: Determinants, Interactions, and Policy Relevance," Journal of Productivity Analysis, Springer, vol. 19(2), pages 161-177, April.
    8. Kapelko, Magdalena & Oude Lansink, Alfons & Stefanou, Spiro E., 2015. "Analyzing the impact of investment spikes on dynamic productivity growth," Omega, Elsevier, vol. 54(C), pages 116-124.
    9. Celikkol, Pinar & Dunn, James W. & Stefanou, Spiro E., 2003. "Policy Reform Impact on Food Manufacturing," Policy Reform and Adjustment Workshop, October 23-25, 2003, Imperial College London, Wye Campus 15743, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
    10. Tostao, Emilio & Chung, Chanjin & Brorsen, B. Wade, 2006. "Integrating the Structural Auction Approach and Traditional Measures of Market Power," 2006 Annual meeting, July 23-26, Long Beach, CA 21244, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Pinar Celikkol & Spiro Stefanou, 2004. "Productivity Growth Patterns in U.S. Food Manufacturing: Case of Meat Products Industry," Working Papers 04-04, Center for Economic Studies, U.S. Census Bureau.
    12. Catherine J. Morrison Paul, 2003. "Cost Economies: A Driving Force for Consolidation and Concentration?," Southern Economic Journal, Southern Economic Association, vol. 70(1), pages 110-127, July.
    13. Perekhozhuk, Oleksandr & Matyukha, Andriy & Glauben, Thomas, 2011. "Estimating the Degree of Buyers' Market Power: Evidence from the Ukrainian Meat Processing Industry," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114782, European Association of Agricultural Economists.
    14. Torres, Marcelo & Morrison Paul, Catherine J., 2006. "Driving forces for consolidation or fragmentation of the US water utility industry: A cost function approach with endogenous output," Journal of Urban Economics, Elsevier, vol. 59(1), pages 104-120, January.
    15. Duvaleix-Treguer, Sabine & Gaigne, Carl, 2012. "Cost Economies in Hog Production: Feed prices matter," Working Papers 125261, Structure and Performance of Agriculture and Agri-products Industry (SPAA).

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