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Strategic response to mandatory reporting legislation in the U.S. livestock and meat industries: Are collusive opportunities enhanced?

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  • Cheryl J. Wachenheim

    (Department of Agricultural Economics, North Dakota State University, P.O. Box 5636, Fargo, ND 58105-5636)

  • Eric A. DeVuyst

    (Department of Agricultural Economics, North Dakota State University, P.O. Box 5636, Fargo, ND 58105-5636)

Abstract

Recent federal legislation requires U.S. meat packers to report detailed information about livestock and meat transactions. The goal of this legislation is to improve competitiveness within the livestock sector and improve decision making within the marketing channel. We discuss the effect of industry structure and market transaction information on the competitive behavior of participant firms and why this legislation may actually reduce the price paid to livestock producers. [JEL Classification: L100, L110, L120] © 2001 John Wiley & Sons, Inc.

Suggested Citation

  • Cheryl J. Wachenheim & Eric A. DeVuyst, 2001. "Strategic response to mandatory reporting legislation in the U.S. livestock and meat industries: Are collusive opportunities enhanced?," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 177-195.
  • Handle: RePEc:wly:agribz:v:17:y:2001:i:2:p:177-195
    DOI: 10.1002/agr.1010
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    References listed on IDEAS

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    1. Cotterill, Ronald W., 2000. "Dynamic Explanations of Industry Structure and Performance," Research Reports 25224, University of Connecticut, Food Marketing Policy Center.
    2. Schultz, Margaret Marstall, 1988. "The relevant geographic market area for fed cattle and the changing structure of the beef packing industry," ISU General Staff Papers 198801010800009801, Iowa State University, Department of Economics.
    3. Fausti, Scott W. & Feuz, Dillon M. & Wagner, John J., 1998. "Value Based Marketing For Fed Cattle: A Discussion Of The Issues," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 1(01).
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    6. William W. Wilson & Bruce L. Dahl, 2004. "Transparency and Bidding Competition in International Wheat Trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 52(1), pages 89-105, March.
    7. Schroeter, John R, 1988. "Estimating the Degree of Market Power in the Beef Packing Industry," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 158-162, February.
    8. Lawrence, John D. & Shafer, John & Hayenga, Marvin L., 1996. "Valuing Public Price Reporting: The Iowa Experience," Staff General Research Papers Archive 5148, Iowa State University, Department of Economics.
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    Citations

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    Cited by:

    1. Goldsmith, Peter D. & Salvador, Antonio & Knipe, Dar & Kendall, Elaine, 2002. "Structural Change Or Logical Incrementalism? Turbulence In The Global Meat System," 2002 Annual meeting, July 28-31, Long Beach, CA 19704, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Fausti, Scott W. & Diersen, Matthew A. & Qasmi, Bashir A., 2007. "Public Price Reporting in the Cash Market for Live Cattle: A Spatial Market Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 36(2), October.
    3. Fausti, Scott W. & Diersen, Matthew A., 2004. "The Voluntary Reporting System's Ability to Provide Price Transparency in the Cash Market for Dressed Steers: Evidence from South Dakota," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.
    4. Rasch, Alexander & Herre, Jesko, 2013. "Customer-side transparency, elastic demand, and tacit collusion under differentiation," Information Economics and Policy, Elsevier, vol. 25(1), pages 51-59.
    5. Fausti, Scott & Diersen, Matthew, 2005. "Price Transparency in the Voluntary Price Reporting System for Live Cattle: Theory and Empirical Evidence from South Dakota," Staff Papers 050001, South Dakota State University, Department of Economics.
    6. Fausti, S.W & Diersen, M., 2003. "Did the Voluntary Price Reporting System Fail to Provide Price Transparency in the Cash Market for Dressed Steers: Evidence from South Dakota," Staff Papers 030001, South Dakota State University, Department of Economics.
    7. MacDonald, James M. & Perry, Janet E. & Ahearn, Mary Clare & Banker, David E. & Chambers, William & Dimitri, Carolyn & Key, Nigel D. & Nelson, Kenneth E. & Southard, Leland W., 2004. "Contracts, Markets, and Prices: Organizing the Production and Use of Agricultural Commodities," Agricultural Economics Reports 34013, United States Department of Agriculture, Economic Research Service.
    8. Pozo, Veronica F. & Bejan, Vladimir & Tejeda, Hernan, 2016. "Disentangling Supply and Demand Shocks to Identify Changes in the Live Cattle’s Market Structure Post Livestock Mandatory Price Reporting Act," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236234, Agricultural and Applied Economics Association.
    9. Sarah Grunewald & Ted C. Schroeder & Clement E. Ward, 2004. "Cattle Feeder Perceptions of Livestock Mandatory Price Reporting," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(4), pages 521-538.
    10. Joseph, Kishore & Garcia, Philip & Peterson, Paul E., 2016. "Does the Boxed Beef Price Inform the Live Cattle Futures Price?," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236166, Agricultural and Applied Economics Association.
    11. Njoroge Kenneth, 2003. "Information Pooling and Collusion: Implications for The Livestock Mandatory Reporting Act," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-15, May.
    12. Martinez, Charles & Anderson, David & Park, John, 2017. "Producer Owned Cooperative Packing Plants and Mandatory Price Reporting: Unintended Consequences," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252798, Southern Agricultural Economics Association.
    13. Azzam, Azzeddine M. & Salvador, Santiago, 2004. "Information pooling and collusion: an empirical analysis," Information Economics and Policy, Elsevier, vol. 16(2), pages 275-286, June.
    14. Koontz Stephen R & Ward Clement E, 2011. "Livestock Mandatory Price Reporting: A Literature Review and Synthesis of Related Market Information Research," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-33, July.

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