Concentration-Price Relations in Regional Fed Cattle Markets

Since 1977, the U.S. beef packing industry has been restructured at a pace unprecedented in large American industries. By 1987, four packers slaughtered over two-thirds of all steers and heifers. In the thirteen regional feedlot-packer markets studied here, the four leading packers slaughtered 85 percent of fed cattle, on average. The impact of packer concentration on fed cattle prices during 1971-86 was examined using several econometric models. The results generally support the hypothesis that packer concentration was negatively related to live cattle prices. Cattle prices were estimated to be about 3 percent less in the most concentrated region compared to the least concentrated region. There was evidence of a critical concentration of CR4 = 60 in regional livestock markets.


Issue Date:
1994
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/25213
Total Pages:
16
Series Statement:
Research Report No. 25




 Record created 2017-04-01, last modified 2017-08-24

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