Concentration, Contracting and Competition: Problems in Using the Packers & Stockyards Act to Supplement Antitrust

The CPI Antitrust Journal, Vol. 4, No. 2, Spring 2010

8 Pages Posted: 2 May 2010

See all articles by Michael E. Sykuta

Michael E. Sykuta

University of Missouri at Columbia - Division of Applied Social Sciences

Date Written: April 29, 2010

Abstract

Consolidation and increased concentration in the agrifood sector over the past two decades, combined with an increased use of alternative marketing agreements in the poultry and livestock industries, have fueled concerns of anti-competitive behavior among large agribusinesses such as the major meat packing companies. The DOJ and USDA have partnered together in a pledge to strengthen enforcement both of antitrust restrictions and of the Packers and Stockyards Act of 1921 ("PSA"). This paper provides a brief overview of the ongoing changes in the meat and livestock industries and the role of the PSA. The paper then outlines several challenges facing the successful and efficient use of the PSA as a competition policy from both theoretical and empirical economic perspectives. I argue that regulators need to tread carefully into their newly launched enforcement partnership given how little is well understood of the factors leading to the existing system and, therefore, the likely consequences associated with more aggressive enforcement in the name of competition.

Keywords: antitrust, agriculture, consolidation, contracting

JEL Classification: K2, L1, L4, Q13

Suggested Citation

Sykuta, Michael E., Concentration, Contracting and Competition: Problems in Using the Packers & Stockyards Act to Supplement Antitrust (April 29, 2010). The CPI Antitrust Journal, Vol. 4, No. 2, Spring 2010, Available at SSRN: https://ssrn.com/abstract=1597886

Michael E. Sykuta (Contact Author)

University of Missouri at Columbia - Division of Applied Social Sciences ( email )

143 Mumford Hall
Columbia, MO 65211
United States
573-882-1738 (Phone)
573-884-3958 (Fax)

HOME PAGE: http://michaelsykuta.com

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