Competition Issues in the U.S. Beef Industry: Market Concentration, Market Power, and Price-Fixing
AAEA member releases new research in AEPP
Source: Agricultural & Applied Economics Association (AAEA)
via PRWeb - Oct 11, 2021
MILWAUKEE (PRWEB) In 2019, fed cattle producers and beef buyers filed class action antitrust lawsuits against the four largest beef packers in the country: Tyson Foods, JBS USA, Cargill, and National Beef Packing Company. The plaintiffs alleged that these companies engaged in an unlawful conspiracy with the purpose of decreasing fed cattle prices and increasing wholesale and retail prices of beef as early as January 2015 and thus violated Section 1 of the Sherman Act (1890).
In the recent article “Competition Issues in the United States Beef Industry,” featured in the Applied Economic Perspectives & Policy Yuliya Bolotova, a former Assistant Professor from Clemson University, analyzes the U.S. beef industry dynamics in light of the alleged input and output price-fixing cartel of the four largest beef packers and highlights relevant competition (antitrust) policy issues.
Bolotova says, “The empirical evidence suggests that beef production, the farm, wholesale, and retail values of beef, and marketing margins increased, but farm sector share decreased in the period of the alleged price-fixing cartel (2015-2019), as compared with a prior period (2010-2014). The wholesale beef pricing by beef packers shifted from being consistent with a perfectly competitive industry pricing in the pre-cartel period to being consistent with the oligopoly and monopoly pricing in the cartel period. The retail beef pricing by food retailers was consistent with an oligopoly pricing in both periods. Beef packers and food retailers shifted to an output (beef) price stabilization practice in the cartel period.The empirical analysis is conducted using publicly available data reported by the U.S. Department of Agriculture Economic Research Service.”
If you are interested in setting up an interview, please contact Allison Ware in the AAEA Business Office.
ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit http://www.aaea.org.