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Market Power in the Irish Beef Processing Industry

Author

Listed:
  • Rao Fu

    (School of Agriculture and Food Science, University College Dublin, D04 V1W8 Dublin 4, Ireland)

  • Chenguang Li

    (School of Agriculture and Food Science, University College Dublin, D04 V1W8 Dublin 4, Ireland)

  • Liming Wang

    (School of Economics and Management, Beijing University of Technology, Beijing 100124, China
    Irish Institute for Chinese Studies, University College Dublin, D04 V1W8 Dublin 4, Ireland)

Abstract

Irish beef processors and cattle farmers have been involved in a lasting controversy on power asymmetry. This paper estimates the degree of market power in the Irish beef processing industry. The New Empirical Industrial Organization approach is extended for estimation, and the market power is testified by conjectural elasticity with supply and demand functions, indicating that beef processors exert a significant market power on cattle farms. Export-orientation and high subsidies are two outstanding features in the Irish beef industry. Exports and subsidies are shown in this paper to have an insignificant influence on market power. This paper confirms that beef processors can exercise market power on farmers to lower prices below the marginal cost.

Suggested Citation

  • Rao Fu & Chenguang Li & Liming Wang, 2021. "Market Power in the Irish Beef Processing Industry," Sustainability, MDPI, vol. 13(11), pages 1-18, June.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:11:p:6453-:d:569780
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