SARA LEE FOODS TAKES FLIGHT: AN ECONOMIC IMPACT ANALYSIS OF A TURKEY PLANT CLOSURE

Laura Martin Cheney and Allan P. Rahn

No 11550, Staff Paper Series from Michigan State University, Department of Agricultural, Food, and Resource Economics

Abstract: In 1998, the Sara Lee Corporation implemented a corporate strategy of deverticalization. Bil Mar Foods, Inc., a subsidiary of Sara Lee responsible for the processing of packaged meat products, followed the strategy by shutting down its turkey slaughter facility in Zeeland, Michigan. As a consequence, turkey growers in Michigan were left with no viable outlet for live bird slaughter and the potential end of live bird production in the region. The current study analyzes the economic impact associated with the cessation of live bird slaughter at the Bil Mar Food plant. The economic consequences may be as high as an $81 million loss in total industry output, a $29 million loss in income, and a total employment loss of nearly 800 jobs. Faced with these economic consequences, turkey growers in the region join forces to form a valued-added cooperative.

Keywords: Agribusiness; Community/Rural/Urban Development (search for similar items in EconPapers)
Pages: 10
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:midasp:11550

DOI: 10.22004/ag.econ.11550

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