MONOPSONISTIC FOOD PROCESSING AND FARM PRICES: THE CASE OF THE WEST ALABAMA CATFISH INDUSTRY

Henry Kinnucan and Gregory M. Sullivan

Southern Journal of Agricultural Economics, 1986, vol. 18, issue 2, 10

Abstract: Increasing concentration in food processing has important economic implications for agricultural producers and consumers. This paper addresses the issue by focusing on a case where pure monopsony conditions appear to hold-catfish processing in West Alabama. Farm-level impacts of the market power imbalance are described via a six equation theoretical model. Results show price elasticity of farm supply governing the economic incentive to the processor for exploiting its market power: less (more) elastic supply implies greater (lesser) divergence between competitive and monopsony price. The theoretical model is operationalized using an indirect procedure recently suggested by Houck for estimating farm level supply elasticities. Based on these supply elasticities and historical prices, the model predicts a 12-35 percent potential reduction in prices received by West Alabama producers as a result of market power imbalance.

Keywords: Industrial; Organization (search for similar items in EconPapers)
Date: 1986
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://ageconsearch.umn.edu/record/29772/files/18020015.pdf (application/pdf)

Related works:
Journal Article: Monopsonistic Food Processing and Farm Prices: The Case of the West Alabama Catfish Industry (1986)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:sojoae:29772

DOI: 10.22004/ag.econ.29772

Access Statistics for this article

More articles in Southern Journal of Agricultural Economics from Southern Agricultural Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().