Consolidation in the Meat Sector

Slaughter industries are consolidating, as the number of firms falls and plant sizes grow. Related changes are occurring in upstream livestock production sectors: large cattle feedlots and hog farms now account for sharply growing shares of livestock sales. As in poultry, new contractual relationships have begun to replace spot market cash transactions for cattle and for hogs. Those sharp structural changes have raised concerns about market power, pollution control, and the reliability of traditional price reporting sources. This research conference aimed at encouraging evaluation and discussion of research methods, data sources, and results.

The eighteen papers presented at the conference covered such topics as:

• The existence, extent, and effects of market power in livestock and meat industries;
• Causal factors in consolidation, such as scale and scope economies, mergers, changes in product mix, innovation, and changes in contractual relations;
• Vertical coordination, as compared to spot markets for transferring livestock, including summaries of recent developments and implications for the location, for product characteristics, and for price discovery;
• Externalities associated with consolidation, including the effects of larger animal production facilities on pollution and the effects of local control regulations on consolidation.