Do Alternative Marketing Arrangements Increase Pork Packers' Market Power?

Posted: 17 Jan 2009

See all articles by Xiaoyong Zheng

Xiaoyong Zheng

North Carolina State University

Tom Vukina

North Carolina State University - Department of Agricultural & Resource Economics

Abstract

In this article we use structural econometrics to formally test whether the use of the alternative marketing arrangements (AMAs) by pork packers is the source of their market power on the spot (cash) market for live hogs. We specify the pork packers' conjectures of the change in the industry total market procurement of live hogs through the spot market with respect to their AMAs stocks. The test is carried out using the mandatory price reporting data. Our results show that pork packers have statistically significant market power on the spot market for live hogs, but the source of that market power cannot be narrowed down to the existence of AMAs stocks.

Suggested Citation

Zheng, Xiaoyong and Vukina, Tomislav, Do Alternative Marketing Arrangements Increase Pork Packers' Market Power?. American Journal of Agricultural Economics, Vol. 91, No. 1, pp. 250-263, February 2009. Available at SSRN: https://ssrn.com/abstract=1327337 or http://dx.doi.org/10.1111/j.1467-8276.2008.01185.x

Xiaoyong Zheng (Contact Author)

North Carolina State University ( email )

Box 8109
3332 Nelson Hall
Raleigh, NC 27695-8109
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919-515-4543 (Phone)
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HOME PAGE: http://www4.ncsu.edu/~xzheng

Tomislav Vukina

North Carolina State University - Department of Agricultural & Resource Economics ( email )

Box 8109
3332 Nelson Hall
Raleigh, NC 27695-8109
United States
919-515-5864 (Phone)
919-515-6268 (Fax)

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