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Concentration-Price Relations in Regional Fed Cattle Markets

Author

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  • Marion, Bruce W.
  • Geithman, Frederick E.

Abstract

Since 1977, the U.S. beef packing industry has been restructured at a pace unprecedented in large American industries. By 1987, four packers slaughtered over two-thirds of all steers and heifers. In the thirteen regional feedlot-packer markets studied here, the four leading packers slaughtered 85 percent of fed cattle, on average. The impact of packer concentration on fed cattle prices during 1971-86 was examined using several econometric models. The results generally support the hypothesis that packer concentration was negatively related to live cattle prices. Cattle prices were estimated to be about 3 percent less in the most concentrated region compared to the least concentrated region. There was evidence of a critical concentration of CR4 = 60 in regional livestock markets.

Suggested Citation

  • Marion, Bruce W. & Geithman, Frederick E., 1994. "Concentration-Price Relations in Regional Fed Cattle Markets," Research Reports 25213, University of Connecticut, Food Marketing Policy Center.
    • Handle: RePEc:ags:uconnr:25213
    DOI: 10.22004/ag.econ.25213
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    References listed on IDEAS

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    1. Azzam, Azzeddine M. & Schroeter, John R., 1991. "Implications Of Increased Regional Concentration And Oligopsonistic Coordination In The Beef Packing Industry," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(2), pages 1-8, December.
    2. A. M. Azzam & E. Pagoulatos, 1990. "Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The Us Meat‐Packing Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(3), pages 362-370, September.
    3. Menkhaus, Dale J. & St. Clair, James S. & Ahmaddaud, A. Zahedi, 1981. "The Effects Of Industry Structure On Price: A Case In The Beef Industry," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 6(2), pages 1-8, December.
    4. Quail, Gwen & Marion, Bruce & Geithman, Frederick & Marquardt, Jeffrey, 1986. "The Impact of Packer Buyer Concentration on Live Cattle Prices," Working Papers 204089, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    5. Bruce W. Marion & Donghwan Kim, 1991. "Concentration change in selected food manufacturing industries: The influence of mergers vs. internal growth," Agribusiness, John Wiley & Sons, Ltd., vol. 7(5), pages 415-431.
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