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Consolidation In U.S. Meatpacking

  • MacDonald, James M.
  • Ollinger, Michael
  • Nelson, Kenneth E.
  • Handy, Charles R.

Meatpacking consolidated rapidly in the last two decades: slaughter plants became much larger, and concentration increased as smaller firms left the industry. We use establishment-based data from the U.S. Census Bureau to describe consolidation and to identify the roles of scale economies and technological change in driving consolidation. Through the 1970's, larger plants paid higher wages, generating a pecuniary scale diseconomy that largely offset the cost advantages that technological scale economies offered large plants. The larger plants' wage premium disappeared in the 1980's, and technological change created larger and more extensive technological scale economies. As a result, large plants realized growing cost advantages over smaller plants, and production shifted to larger plants.

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File URL: http://purl.umn.edu/34021
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Paper provided by United States Department of Agriculture, Economic Research Service in its series Agricultural Economics Reports with number 34021.

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Date of creation: 2000
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Handle: RePEc:ags:uerser:34021
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  1. Gallant, A. Ronald & Jorgenson, Dale W., 1979. "Statistical inference for a system of simultaneous, non-linear, implicit equations in the context of instrumental variable estimation," Journal of Econometrics, Elsevier, vol. 11(2-3), pages 275-302.
  2. Morrison Paul, Catherine J., 2000. "Cost Economies and Market Power in U.S. Beef Packing," Monographs, University of California, Davis, Giannini Foundation, number 11934.
  3. Clement E. Ward, 1990. "Meatpacking plant capacity and utilization: Implications for competition and pricing," Agribusiness, John Wiley & Sons, Ltd., vol. 6(1), pages 65-73.
  4. Edward C. Kokkelenberg & Donna R. Sockell, 1985. "Union membership in the United States, 1973û1981," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 38(4), pages 497-543, July.
  5. Baltagi, Badi H & Griffin, James M & Rich, Daniel P, 1995. "Airline Deregulation: The Cost Pieces of the Puzzle," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 245-60, February.
  6. Ollinger, Michael & MacDonald, James M. & Madison, Milton E., 2000. "Structural Change In U.S. Chicken And Turkey Slaughter," Agricultural Economics Reports 34049, United States Department of Agriculture, Economic Research Service.
  7. Hayenga, Marvin L. & Koontz, Stephen R. & Schroeder, Ted C., 1996. "Definition of Regional Cattle Procurement Markets," Staff General Research Papers 10562, Iowa State University, Department of Economics.
  8. James M. MacDonald & Michael E. Ollinger & Kenneth E. Nelson & Charles R. Handy, 1996. "Structural Change in Meat Industries: Implications for Food Safety Regulation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 780-785.
  9. Melton, Brian & Huffman, Wallace, 1995. "Beef and Pork Packing Costs and Input Demands: Effects of Unionization and Technology," Staff General Research Papers 5043, Iowa State University, Department of Economics.
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