IDEAS home Printed from https://ideas.repec.org/p/cen/wpaper/00-03.html
   My bibliography  Save this paper

Scale Economies and Consolidation in Hog Slaughter

Author

Listed:
  • James M MacDonald
  • Michael E Ollinger

Abstract

We use establishment based panel data to estimate a cost function which identifies the role of scale economies in hog slaughter consolidation. We find modest by extensive technological scale economies in the 1990s, and they became more important over time. But wages rose sharply with plant size through the 1970s and those wage premiums generated a pecuniary scale diseconomy that largely offset the effects of technological scale economies. The size-wage relation disappeared in the 1980; with growing technological scale economies and disappearing pecuniary diseconomies, large plants realized growing cost advantages over smaller plants, and production shifted to larger plants.

Suggested Citation

  • James M MacDonald & Michael E Ollinger, 2000. "Scale Economies and Consolidation in Hog Slaughter," Working Papers 00-03, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:00-03
    as

    Download full text from publisher

    File URL: https://www2.census.gov/ces/wp/2000/CES-WP-00-03.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Allen, W Bruce & Liu, Dong, 1995. "Service Quality and Motor Carrier Costs: An Empirical Analysis," The Review of Economics and Statistics, MIT Press, vol. 77(3), pages 499-510, August.
    2. MacDonald, James M. & Ollinger, Michael & Nelson, Kenneth E. & Handy, Charles R., 2000. "Consolidation In U.S. Meatpacking," Agricultural Economic Reports 34021, United States Department of Agriculture, Economic Research Service.
    3. 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.
    4. Gallant, A. Ronald & Jorgenson, Dale W., 1979. "Statistical inference for a system of simultaneous, non-linear, implicit equations in the context of instrumental variable estimation," Journal of Econometrics, Elsevier, vol. 11(2-3), pages 275-302.
    5. Stevenson, Rodney, 1980. "Measuring Technological Bias," American Economic Review, American Economic Association, vol. 70(1), pages 162-173, March.
    6. Bryan E. Melton & Wallace E. Huffman, 1995. "Beef and Pork Packing Costs and Input Demands: Effects of Unionization and Technology," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 471-485.
    7. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. MacDonald, James M. & Ollinger, Michael & Nelson, Kenneth E. & Handy, Charles R., 2000. "Consolidation In U.S. Meatpacking," Agricultural Economic Reports 34021, United States Department of Agriculture, Economic Research Service.
    2. Siebert, John W. & Nayga, Rodolfo M., Jr. & Thelen, Gina C. & Kuker, Don, 2000. "Enhancing The Financial Performance Of Small Meat Processors," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 3(3), pages 1-12.
    3. Poray, Michael C. & Gray, Allan W. & Boehlje, Michael & Preckel, Paul V., 2003. "Evaluation of Alternative Coordination Systems Between Producers and Packers in the Pork Value Chain," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 6(2), pages 1-21.
    4. Milton Madison & James MacDonald & Michael Ollinger, 2000. "Technological Change and Economies of Scale in U.S. Poultry Slaughter," Working Papers 00-05, Center for Economic Studies, U.S. Census Bureau.
    5. Poray, Michael C. & Gray, Allan W. & Boehlje, Michael, 2002. "Evaluation of Alternative Coordination Systems Between Producers and Packers in the Pork Value Chain," Staff Papers 200386, Purdue University, Department of Agricultural Economics.
    6. Brester, Gary W. & Marsh, John M., 2001. "The Effects Of U.S. Meat Packing And Livestock Production Technologies On Marketing Margins And Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(2), pages 1-18, December.
    7. Raper, Kellie Curry & Cheney, Laura Martin & Punjabi, Meeta, 2000. "Assessing The Impact Of A Hog Slaughter Plant Closing: The Thorn Apple Valley Case," Staff Paper Series 11658, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    8. Preckel, Paul V. & Boehlje, Michael & Gray, Allan W. & Kim, Sounghun, 2004. "Vertically Aligned Vs. Open Market Coordination: Dominance Or Co-Existence?," 2004 Annual meeting, August 1-4, Denver, CO 20099, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Philip L. Paarlberg & Mildred M. Haley, 2001. "Market concentration and vertical coordination in the pork industry: Implications for public policy analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 197-212.
    10. Ollinger, Michael & Ralston, Katherine & Guthrie, Joanne, 2011. "School Foodservice Costs: Location Matters," Economic Research Report 262241, United States Department of Agriculture, Economic Research Service.
    11. 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.
    12. Adhikari, Bishwa B. & Harsh, Stephen B. & Cheney, Laura Martin, 2003. "Factors Affecting Regional Shifts Of U.S Pork Production," 2003 Annual meeting, July 27-30, Montreal, Canada 22200, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Joost M.E. Pennings & Scott H. Irwin & Darrel L. Good, 2002. "Surveying Farmers: A Case Study," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 266-277.
    14. Nganje, William E. & Mazzocco, Michael A. & McKeith, Floyd K., 1999. "Food Safety Regulation, Product Pricing, And Profitability: The Case Of Haccp," AE Series 23077, North Dakota State University, Department of Agribusiness and Applied Economics.
    15. Adhikari, Bishwa B. & Harsh, Stephen B. & Schwab, Gerald, 2004. "Regional Competitive Position Of Pork Industry," 2004 Annual meeting, August 1-4, Denver, CO 20057, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Pennings, Joost M.E. & Irwin, Scott H. & Good, Darrel L., 1999. "Surveying Farmers: A Research Note," AgMAS Project Research Reports 14781, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    17. Brian L. Buhr, 2004. "Case Studies of Direct Marketing Value-Added Pork Products in a Commodity Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(2), pages 266-279.
    18. Ben-Belhassen, Boubaker & Womack, Abner W., 2000. "Measurement And Explanation Of Technical Efficiency In Missouri Hog Production," 2000 Annual meeting, July 30-August 2, Tampa, FL 21819, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Rajagopal, Dagmar & Shah, Anwar, 1995. "A rational expectations model for tax policy analysis: An evaluation of tax incentives for the textile, chemical and pharmaceutical industries of Pakistan," Journal of Public Economics, Elsevier, vol. 57(2), pages 249-276, June.
    20. Perry Warjiyo & Wallace E. Huffman, 1997. "Dynamic input demand functions and resource adjustment for US agriculture: state evidence," Agricultural Economics, International Association of Agricultural Economists, vol. 17(2-3), pages 223-237, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:00-03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dawn Anderson (email available below). General contact details of provider: https://edirc.repec.org/data/cesgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.