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Regional Impacts of a U.S. Hog Slaughter Plant Closing: The Thorn Apple Valley Case

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  • Kellie Curry Raper
  • Laura M. Cheney
  • Meeta Punjabi

Abstract

As the 1998 U.S. hog market collapse unfolded, Thorn Apple Valley ceased hog slaughter operations at its Detroit, Michigan plant. We examine the impacts on Michigan live hog prices relative to Eastern Corn Belt hog prices. Results indicate that Michigan producers' relative price advantage diminished after the closure as procurement competition changed. As the impacts of the 1998 hog market collapse were absorbed, Michigan producers' relative price advantage became consistently negative. Examination of Michigan's market hog production distribution indicates postclosure shifts away from production in areas geographically near to Thorn Apple Valley and growth in counties geographically closer to alternative packers. Copyright 2006, Oxford University Press.

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  • 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.
    • Handle: RePEc:oup:revage:v:28:y:2006:i:4:p:531-542
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2006.00320.x
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    1. Phil Simmons & Phillip Hansen, 1997. "The effect of buyer concentration on prices in the Australian wool market," Agribusiness, John Wiley & Sons, Ltd., vol. 13(4), pages 423-430.
    2. 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.
    3. Harold G. Love & D. Milton Shuffett, 1965. "Short-Run Price Effects of a Structural Change in a Terminal Market for Hogs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(3), pages 803-812.
    4. Hayenga, Marvin & Deiter, Ronald & Montoya, Cristobal, 1986. "Price Impacts Associated with the Closing of Hog Slaughtering Plants," ISU General Staff Papers 198607010700001497, Iowa State University, Department of Economics.
    5. Hayenga, Marvin L., 1998. "Cost Structures of Pork Slaughter and Processing Firms: Behavioral and Performance Implications," Staff General Research Papers Archive 1254, Iowa State University, Department of Economics.
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    Cited by:

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    2. Loka Ashwood & Andy Pilny & John Canfield & Mariyam Jamila & Ryan Thomson, 2022. "From Big Ag to Big Finance: a market network approach to power in agriculture," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 39(4), pages 1421-1434, December.

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