IDEAS home Printed from https://ideas.repec.org/a/oup/revage/v20y1998i2p574-583..html
   My bibliography  Save this article

Cost Structures of Pork Slaughter and Processing Firms: Behavioral and Performance Implications

Author

Listed:
  • Marvin L. Hayenga

Abstract

A survey of selected large pork slaughter and processing firms was conducted. Single- and double-shift plant effects, varying capacity utilization effects, and multiple plant effects on fixed and variable costs are estimated. Two dollar per head reductions in operating costs were found for two-shift versus single-shift plants. Fixed plant and equipment costs declined $3/head for double- versus single-shift plants. Capacity utilization rates can greatly affect variable costs per head and pricing behavior in the market for hogs, since approximately 60%–70% of variable costs in the medium run is essentially fixed within the first four days of the week. Increased market concentration seems likely in response to the economies of size in plants and in multiplant operations. Stronger long-term vertical linkages between packer and hog producer (or vertical integration) will continue to increase in importance. Overall efficiency is likely to be enhanced, but market power issues will become more frequently raised.

Suggested Citation

  • Marvin L. Hayenga, 1998. "Cost Structures of Pork Slaughter and Processing Firms: Behavioral and Performance Implications," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(2), pages 574-583.
    • Handle: RePEc:oup:revage:v:20:y:1998:i:2:p:574-583.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/1350009
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. MacDonald, James M. & Ollinger, Michael & Nelson, Kenneth E. & Handy, Charles R., 2000. "Consolidation In U.S. Meatpacking," Agricultural Economic Reports 34021, United States Department of Agriculture, Economic Research Service.
    2. Poray, Michael C. & Gray, Allan W. & Boehlje, Michael & Preckel, Paul V., 2003. "Evaluation of Alternative Coordination Systems Between Producers and Packers in the Pork Value Chain," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 6(2), pages 1-21.
    3. Nganje, William E. & Mazzocco, Michael A. & McKeith, Floyd K., 1999. "Food Safety Regulation, Product Pricing, And Profitability: The Case Of Haccp," AE Series 23077, North Dakota State University, Department of Agribusiness and Applied Economics.
    4. Philip L. Paarlberg & Mildred M. Haley, 2001. "Market concentration and vertical coordination in the pork industry: Implications for public policy analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 197-212.
    5. Kellie Curry Raper & Laura M. Cheney & Meeta Punjabi, 2006. "Regional Impacts of a U.S. Hog Slaughter Plant Closing: The Thorn Apple Valley Case," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 531-542.
    6. James M. MacDonald & Michael E. Ollinger, 2000. "Scale Economies and Consolidation in Hog Slaughter," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 334-346.
    7. Joost M.E. Pennings & Scott H. Irwin & Darrel L. Good, 2002. "Surveying Farmers: A Case Study," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 266-277.
    8. Ben-Belhassen, Boubaker & Womack, Abner W., 2000. "Measurement And Explanation Of Technical Efficiency In Missouri Hog Production," 2000 Annual meeting, July 30-August 2, Tampa, FL 21819, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. 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, vol. 3(3), pages 1-12.
    10. Brian L. Buhr, 2004. "Case Studies of Direct Marketing Value-Added Pork Products in a Commodity Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(2), pages 266-279.
    11. Adhikari, Bishwa B. & Harsh, Stephen B. & Cheney, Laura Martin, 2003. "Factors Affecting Regional Shifts Of U.S Pork Production," 2003 Annual meeting, July 27-30, Montreal, Canada 22200, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Poray, Michael C. & Gray, Allan W. & Boehlje, Michael, 2002. "Evaluation of Alternative Coordination Systems Between Producers and Packers in the Pork Value Chain," Staff Papers 200386, Purdue University, Department of Agricultural Economics.
    13. Adhikari, Bishwa B. & Harsh, Stephen B. & Schwab, Gerald, 2004. "Regional Competitive Position Of Pork Industry," 2004 Annual meeting, August 1-4, Denver, CO 20057, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Pennings, Joost M.E. & Irwin, Scott H. & Good, Darrel L., 1999. "Surveying Farmers: A Research Note," AgMAS Project Research Reports 14781, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    15. Raper, Kellie Curry & Cheney, Laura Martin & Punjabi, Meeta, 2000. "Assessing The Impact Of A Hog Slaughter Plant Closing: The Thorn Apple Valley Case," Staff Paper Series 11658, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    16. Preckel, Paul V. & Boehlje, Michael & Gray, Allan W. & Kim, Sounghun, 2004. "Vertically Aligned Vs. Open Market Coordination: Dominance Or Co-Existence?," 2004 Annual meeting, August 1-4, Denver, CO 20099, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:revage:v:20:y:1998:i:2:p:574-583.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.