Industrial Organization Commons^™

Competition In The Us Meatpacking Industry: Is It History?, Azzeddine Azzam

Azzeddine Azzam

The U.S. meatpacking industry has become concentrated to a degree not experienced since the days of the 'Beef trust' a century ago. A number of mainstream studies have investigated if such concentration has been detrimental to competition. Just as earlier studies may have helped shape competition policy towards meatpacking a century ago, contemporary studies have made their way into current discussions and may shape competition policy at the turn of this century. This paper asks whether or not contemporary studies are useful in informing competition policy. After comparing how competition looks from the econometric vantage point with how it looks …

Measuring Market Power And Cost-Efficiency Effects Of Industrial Concentration, Azzeddine Azzam

Azzeddine Azzam

In this paper, the author shows how E. Appelbaum's framework for testing price-taking behavior in a single industry can be formally extended to consider concentration explicitly. In so doing, he separates the market power effect of concentration from its cost-efficiency effect. Data from the U.S. beef-packing industry are used to illustrate an empirical application of the model. The findings support oligopsonistic market power and slaughter-cost efficiency in the industry. However, the cost-efficiency effect outweighs the market-power effect.

Testing The Monopsony-Inefficiency Incentive For Backward Integration, Azzeddine Azzam

Azzeddine Azzam

In theory, monopsony at one stage in a vertically related market provides an incentive for backward integration into the adjacent competitive stages. By integrating backward, a monopsonist internalizes the monopsony inefficiency due to underemployment of the factor produced upstream. However, little is known about the importance of such incentive in practice. In this paper, the author provides an empirically implementable model to test the monopsony-inefficiency incentive for vertical integration. For illustration, the model is applied to the U.S. beef slaughter industry. Findings seem to support the monopsony-inefficiency incentive for backward integration by the industry into the live cattle market.

The Tradeoff Between Oligopsony Power And Cost Efficiency In Horizontal Consolidation: An Example From Beef Packing, John Schroeter, Azzeddine Azzam

Azzeddine Azzam

In this paper, the authors model the trade-off between regional oligopsony power and cost efficiency resulting from consolidation in a food processing industry. The model can be used to calculate the cost reductions necessary to offset the anticompetitive effects of market power and to compare them to actual cost savings achieved through plant scale or multiplant operating economies. For an application, the authors choose the beef packing industry. For this case, they find that the estimated cost savings necessary to neutralize the anticompetitive effects of consolidation in beef packing are about half the actual cost savings from scale economies.

Markdown Pricing And Cattle Supply In The Beef Packing Industry, Kyle Stiegert, Azzeddine Azzam, Wade Brorsen

Azzeddine Azzam

The authors determine the effect of anticipated and unanticipated cattle supply on the departure of fed cattle price from cattle's marginal value product. Results indicate fed cattle were priced significantly below their marginal value during thirty-one of the fifty-nine quarters between 1972 II and 1986 IV. When unanticipated supply shocks are small, markdown behavior is consistent with the hypothesis that packers follow an average processing cost pricing rule. One implication of the authors' results is that reducing industry concentration is not likely to lead to changes in cattle prices predicted by structure-conduct-performance-based studies of the industry.

Changes In The Western Australian Dairy Farm Industry, Ross Kingwell, Graham Annan

Journal of the Department of Agriculture, Western Australia, Series 4

Over the past decade, the number of dairy cows and the number of producers in the Western Australian dairy industry have steadily declined. The industry still relies heavily on market milk quotas for its profits, but recent export contracts have boosted profits from manufacturing milk production.

Market milk quotas remain unevenly distributed across the dairy regions and amongst quotaholders, although the regional distribution of quotas is changing.

The Week: An Industrial, Financial, And Agricultural Review, Zach S. Henderson Library Special Collections

Finding Aids

This collection consists of typescript articles on letterhead titled The Week: An Industrial, Financial, and Agricultural Review. The articles cover topics related to public utilities (especially rural electrification), agricultural diversification and reform, economic development in Georgia, and the work of the Utilities Information Committee of Georgia, an alliance between businessmen and landowners formed in 1919 to promote economic development. Most of the articles are undated but content indicates that they were written from 1926 through 1928.

Find this collection in the University Libraries' catalog.

Marketing Margins, Market Power, And Price Uncertainty, John Schroeter, Azzeddine Azzam

Azzeddine Azzam

This paper provides a conceptual and empirical framework for analyzing marketing margins in a noncompetitive food-processing industry facing output price uncertainty. The framework allows for the decomposition of observed margins into components reflecting the marginal cost of the processing industry, oligopoly/oligopsony price distortions, and an output price risk component. The empirical procedure is applied to a time series of spreads between wholesale pork prices and farm prices of market hogs. The principal finding is that, while farm/wholesale margins are more consistent with competitive performance now than they were fifteen years ago, the output price risk component persisted throughout the sample …

Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The U.S. Meat-Packing Industry, Azzeddine Azzam, Emilio Pagoulatos

Azzeddine Azzam

This paper extends the conjectural approach in industrial organization to the analysis of imperfections in output and factor markets. Starting from the specification of a production function, the econometric analysis is based on the formulation and estimation of a simultaneous-equation model consisting of production function, first-order conditions associated with factor employment, and two conjectural elasticities to parameterize the industry's oligopoly and oligopsony equilibria. As an example, we provide and application to the U.S. meat-packing industry. Our results suggest that the industry exercises market power in both the output (meat) market and the factor (live animal) market.

Economic Evaluation Of Mechanizing Land Preparation, Raouf Fareed Khouzam

Archived Theses and Dissertations

No abstract provided.

B746: Economies Of Size For Maine Potato Packing Plants, Edward F. Johnston

Bulletins

The objective of this study was to find where economies in scale lie, and what, if any, would be the preferred or most economical in packing facilities. Data relative to equipment and labor requirements and capabilities and to materials and services were obtained through manufacturers, sales agencies, research studies and case studies. Two computerized programs were developed to select equipment, labor, and facilities which would be most efficient and least-cost and this was done for packing 10-pound bags with potatoes. Ten model lines resulted from the analysis allowing for input rates of 80 to 800 cwt/hr when based on a …