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The Achilles heel of the U.S. food industries: Exposure to labor and upstream industries in the supply chain

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  • Ahmad Zia Wahdat
  • Jayson L. Lusk

Abstract

The modern‐day food industries are part of a complex agri‐food supply chain, where food production has become efficient yet potentially vulnerable to supply chain risks. The COVID‐19 pandemic is a testament to that end. This article measures and identifies the U.S. food manufacturing industries' vulnerability to upstream industries and labor occupations by (a) calculating a food industry's diversification of intermediate input purchases across upstream industries, (b) quantifying the relative exposure of food manufacturing in a given industry and location to upstream input suppliers and labor occupations, and (c) estimating each food industry's gross output elasticity of inputs. This article also explores geographic heterogeneity in food industries' vulnerability. Among our results, we find evidence that the animal processing industry's output is relatively vulnerable to production labor, consistent with the observed disruptions to the meatpacking sector during COVID‐19, which were largely caused by labor issues. Our results may help academics and practitioners to understand food industries' vulnerabilities to upstream industries and labor occupations.

Suggested Citation

  • Ahmad Zia Wahdat & Jayson L. Lusk, 2023. "The Achilles heel of the U.S. food industries: Exposure to labor and upstream industries in the supply chain," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 624-643, March.
    • Handle: RePEc:wly:ajagec:v:105:y:2023:i:2:p:624-643
    DOI: 10.1111/ajae.12331
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    Cited by:

    1. Mitchell, James L. & Thompson, Jada M. & Malone, Trey, 2024. "Biological lags and market dynamics in vertically coordinated food supply chains: HPAI impacts on U.S. egg prices," Food Policy, Elsevier, vol. 126(C).
    2. G Tassinari & S Boccaletti & C Soregaroli, 2023. "Recycling sludge in agriculture? Assessing sustainability of nutrient recovery in Italy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(5), pages 1633-1658.
    3. Andrew W. Stevens & Jim Teal, 2024. "Diversification and resilience of firms in the agrifood supply chain," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(2), pages 739-778, March.
    4. Christopher N. Boyer & Dayton M. Lambert & Charles C. Martinez & Joshua G. Maples, 2023. "Beef and pork processing plant labor costs," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 691-702, July.
    5. Timothy J. Richards & Zachariah Rutledge & Marcelo Castillo, 2024. "Labor shortages and agricultural trucking rates," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 72(2), pages 105-129, June.

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