CONSOLIDATION IN U.S. MEATPACKING
James MacDonald,
Michael Ollinger,
Kenneth E. Nelson and
Charles R. Handy
No 34021, Agricultural Economic Reports from United States Department of Agriculture, Economic Research Service
Abstract:
Meatpacking consolidated rapidly in the last two decades: slaughter plants became much larger, and concentration increased as smaller firms left the industry. We use establishment-based data from the U.S. Census Bureau to describe consolidation and to identify the roles of scale economies and technological change in driving consolidation. Through the 1970's, larger plants paid higher wages, generating a pecuniary scale diseconomy that largely offset the cost advantages that technological scale economies offered large plants. The larger plants' wage premium disappeared in the 1980's, and technological change created larger and more extensive technological scale economies. As a result, large plants realized growing cost advantages over smaller plants, and production shifted to larger plants.
Keywords: Industrial Organization; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 42
Date: 2000
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Citations: View citations in EconPapers (29)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerser:34021
DOI: 10.22004/ag.econ.34021
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