The structure of production agriculture, food processing industries, and the retail and food service industries are constantly changing. Market structure affects the behavior of firms. Rapid changes have taken place in the meatpacking industry. The causes and consequences of these structural and behavioral changes in meatpacking is a contentious issue for many.
Causes of structural changes are related to economies of size in production, processing and distribution. They are influenced by changes in demand for red meats and poultry. How much they are influenced by the drive for market power and profits is a highly debated topic. Clearly, mergers and acquisitions have increased the rate of consolidation among meatpacking firms. The consequences of structural and behavioral changes are equally controversial. The decreasing number of buyers along with their increase in absolute and relative size affects competition and price discovery. The increase in buyer concentration and consolidation leave many to conclude that meatpackers have excessive market power and domination.
Dr. Clem Ward has spent much of his career following structural and behavioral changes in meatpacking. He authored the book, Meatpacking Competition and Pricing in 1988. Both in research for the book and work since then, he has studied economies of size in slaughtering and fabricating, price discovery and pricing methods, and competition impacts on fed cattle prices, and effects of captive supplies on fed cattle prices.