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Title: Market Power in Poultry Production Contracting? Evidence from a Farm Survey
Authors: MacDonald, James M.
Key, Nigel D.
Editors: Marchant, Mary A.
Bosch, Darrell J.
Keywords: broilers
market power
production contracts
JEL Codes: L11
Issue Date: 2012-11
Abstract: The exercise of market power by broiler processing firms (integrators) is plausible because local markets for growers are concentrated and because growers face hold-up risks arising from substantial investments in specific assets set against limited integrator purchase commitments. This article explores the links between local integrator concentration and grower compensation under production contracts using data from the 2006 broiler version of the USDA’s Agricultural Resource Management Survey. Results of this study, which account for characteristics of the operation and specific features of the production contract, suggest that greater integrator concentration results in a small but economically meaningful reduction in grower compensation.
Institution/Association: Journal of Agricultural and Applied Economics> Volume 44, Number 04, November 2012
Total Pages: 14
From Page: 477
To Page: 490
Collections:Volume 44, Number 04, November 2012

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