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Competition in the US Meatpacking Industry

Author

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  • Michael K. Wohlgenant

    (Department of Agricultural & Resource Economics, North Carolina State University, Raleigh, North Carolina 27695-8109)

Abstract

This article reviews and evaluates the recent literature on competition in the US meatpacking industry. Studies on market power in meatpacking indicate that concentration in procurement of livestock (cattle or hogs) has not adversely affected prices received by producers or prices paid by consumers. Indeed, there is evidence that producers may be better off because of lower processing costs due to the concentration and introduction of new technical innovations. Policies to restrict alternative marketing arrangements such as those proposed by GIPSA would make producers and consumers worse off. The beef and pork industries are quite complex and contain both spatial and temporal dimensions that can affect the level of competition. Fringe producers because of locational shift of industry and thin markets may be worse off. Establishment of niche enterprises may benefit these producers. In the future, incentives are to maintain steady long-run supplies of livestock to fully operate slaughtering and processing facilities.

Suggested Citation

  • Michael K. Wohlgenant, 2013. "Competition in the US Meatpacking Industry," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 1-12, June.
    • Handle: RePEc:anr:reseco:v:5:y:2013:p:1-12
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-resource-091912-151807
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    Citations

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    Cited by:

    1. Minseong Kang & Byeong‐Il Ahn, 2023. "Market power and cost‐efficiency effects: Broiler packing industry in South Korea," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1157-1172, October.
    2. Joshua G. Maples & James L. Mitchell & David P. Anderson & John D. Anderson & Christopher T. Bastian & Scott Brown & Stephen R. Koontz & Derrell S. Peel, 2022. "Potential beef cattle topics in the 2023 farm bill," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(3), pages 1261-1272, September.
    3. Johan Swinnen & Alessandro Olper & Senne Vandevelde, 2021. "From unfair prices to unfair trading practices: Political economy, value chains and 21st century agri‐food policy," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 771-788, September.
    4. Rao Fu & Chenguang Li & Liming Wang, 2021. "Market Power in the Irish Beef Processing Industry," Sustainability, MDPI, vol. 13(11), pages 1-18, June.
    5. James M. MacDonald, 2024. "Introduction: The Industrial Organization of Food and Agriculture," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(1), pages 1-9, February.
    6. Tian Xia & John M. Crespi & Kevin C. Dhuyvetter, 2019. "Could packers manipulate spot markets by tying contracts to futures prices? And do they?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 67(1), pages 85-102, March.
    7. A. Ford Ramsey & Barry Goodwin & Mildred Haley, 2021. "Labor Dynamics and Supply Chain Disruption in Food Manufacturing," NBER Chapters, in: Risks in Agricultural Supply Chains, National Bureau of Economic Research, Inc.
    8. Hanbin Lee & Richard J. Sexton & Daniel A. Sumner, 2023. "National and subnational regulation of farm practices for consumer products sold within a jurisdiction: California's Proposition 12," Agricultural Economics, International Association of Agricultural Economists, vol. 54(6), pages 838-853, November.
    9. Ramsey, Austin F. & Goodwin, Barry K., 2024. "A Different 'Law of One Price:' Missouri's Livestock Marketing Law of 1999," 2024 Annual Meeting, July 28-30, New Orleans, LA 343679, Agricultural and Applied Economics Association.
    10. Melissa G.S. McKendree & Tina L. Saitone & K. Aleks Schaefer, 2021. "Oligopsonistic Input Substitution in a Thin Market," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1414-1432, August.
    11. Jayson L. Lusk & Glynn T. Tonsor & Lee L. Schulz, 2021. "Beef and Pork Marketing Margins and Price Spreads during COVID‐19," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(1), pages 4-23, March.
    12. MacDonald, James M. & Dong, Xiao & Fuglie, Keith O., 2023. "Concentration and Competition in U.S. Agribusiness," Economic Information Bulletin 337566, United States Department of Agriculture, Economic Research Service.
    13. Tina L. Saitone & K. Aleks Schaefer & Daniel Scheitrum & Shawn Arita & Vince Breneman & Rebecca Nemec Boehm & Josh G. Maples, 2024. "Consolidation and Concentration in U.S. Meat Processing: Updated Measures Using Plant-Level Data," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(1), pages 35-56, February.
    14. Ma, Meilin & Liu, Yunjuan, 2020. "Processor-Retailer Markup and Pricing Decision: Insights from the U.S. Beef Market 2011-16," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304350, Agricultural and Applied Economics Association.
    15. Lee, Jungmin & Chung, Chanjin, 2022. "Impact of Captive Supply on Cash Price in the U.S. Cattle Procurement Market: A Dynamic Modeling Approach," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 45(3), September.

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