Concentration-Price Relations in Regional Fed Cattle Markets

Bruce W. Marion and Frederick E. Geithman

No 25213, Research Reports from University of Connecticut, Food Marketing Policy Center

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.

Keywords: Demand and Price Analysis; Industrial Organization; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 16
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uconnr:25213

DOI: 10.22004/ag.econ.25213

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