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Technology, Labor Wars, and Producer Dynamics: Explaining Consolidation in Beefpacking

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  • James M. MacDonald
  • Michael E. Ollinger

Abstract

Beefpacking underwent a dramatic transformation in the 1970s and 1980s, as plants got much larger and industry concentration rose dramatically. We use individual Census Bureau plant records to analyze the sources of the transformation. We find that there were modest but extensive scale economies in packing plants, covering the full range of plant sizes, and that such economies became more important throughout the period of the study. As production shifted to larger plants, we estimate that the industry's aggregate processing costs fell by 35.3% by 2002, compared to what they would have been without consolidation. Copyright 2005, Oxford University Press.

Suggested Citation

  • James M. MacDonald & Michael E. Ollinger, 2005. "Technology, Labor Wars, and Producer Dynamics: Explaining Consolidation in Beefpacking," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1020-1033.
  • Handle: RePEc:oup:ajagec:v:87:y:2005:i:4:p:1020-1033
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2005.00785.x
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    Cited by:

    1. Artz, Georgeanne M. & Jackson, Rebecca & Orazem, Peter F., 2010. "Is It a Jungle Out There? Meat Packing, Immigrants, and Rural Communities," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(2), August.
    2. Cai, Xiaowei & Stiegert, Kyle W. & Koontz, Stephen R., 2009. "Oligopsony Power: Evidence from the U.S. Beef Packing Industry," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49364, Agricultural and Applied Economics Association.
    3. Ollinger, Michael, 2009. "The Cost of Food Safety Technologies in the Meat and Poultry Industries," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 48783, Agricultural and Applied Economics Association.
    4. MacDonald, James M., 2011. "Why Are Farms Getting Larger? The Case Of The U.S," 51st Annual Conference, Halle, Germany, September 28-30, 2011 115361, German Association of Agricultural Economists (GEWISOLA).
    5. Martinez, Stephen W., 2007. "The U.S. Food Marketing System: Recent Developments, 1997-2006," Economic Research Report 55962, United States Department of Agriculture, Economic Research Service.

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