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Market Power in the Irish Beef Processing Industry

Rao Fu (), Chenguang Li () and Liming Wang ()
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Rao Fu: School of Agriculture and Food Science, University College Dublin, D04 V1W8 Dublin 4, Ireland
Chenguang Li: School of Agriculture and Food Science, University College Dublin, D04 V1W8 Dublin 4, Ireland
Liming Wang: School of Economics and Management, Beijing University of Technology, Beijing 100124, China

Sustainability, 2021, vol. 13, issue 11, 1-18

Abstract: Irish beef processors and cattle farmers have been involved in a lasting controversy on power asymmetry. This paper estimates the degree of market power in the Irish beef processing industry. The New Empirical Industrial Organization approach is extended for estimation, and the market power is testified by conjectural elasticity with supply and demand functions, indicating that beef processors exert a significant market power on cattle farms. Export-orientation and high subsidies are two outstanding features in the Irish beef industry. Exports and subsidies are shown in this paper to have an insignificant influence on market power. This paper confirms that beef processors can exercise market power on farmers to lower prices below the marginal cost.

Keywords: market power; Irish beef; beef processing (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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