Structural Change and Competition in Seven U.S. Food Markets

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Structrual Change and Competition in Seven U.S. Food Markets By A. J. Reed and J. S. Clark, Food and Rural Economics Division, Economic Research Service, U.S. Department of Agriculture. Technical Bulletin No. 1881 (TB-1881). February 2000.

Abstract

Recent trends in mergers and acquisitions in the U.S. food sector--food manufacturers, wholesalers, and retailers--raise concerns about market power. In the presence of market power, farmers may receive lower than competitive farm prices, and consumers may pay higher than competitive retail prices. This study presents empirical tests of market power at the national level for seven food categories: beef, pork, poultry, eggs, dairy, fresh fruit, and fresh vegetables. At the national level, our tests provide evidence of competitive conduct in both the sale of finalfood products and the purchase of farm ingredients.

Keywords: Retail food and farm prices, market power, structural change, cointegration

Contents

• Frontmatter (Title page, Contents, List of Tables, Summary); 38 kb
• Introduction; 139 kb
• The Economic Model; 139 kb
• Structural Change, Cointegration, and Market Clearing; 140 kb
• Further Empirical Results; 117 kb
• Conclusions; 25 kb
• References and Appendix; 53 kb

• Entire report; 193 kb

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Updated: March 16, 2000