Technology, Labor Wars, and Producer Dynamics: Explaining Consolidation in Beefpacking
Posted: 16 Feb 2007
Beefpacking underwent a dramatic transformation in the 1970s and 1980s, as plants got much larger and industry concentration rose dramatically. We use individual Census Bureau plant records to analyze the sources of the transformation. We find that there were modest but extensive scale economies in packing plants, covering the full range of plant sizes, and that such economies became more important throughout the period of the study. As production shifted to larger plants, we estimate that the industry's aggregate processing costs fell by 35.3% by 2002, compared to what they would have been without consolidation.
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