Food Industry Mergers and Acquisitions Lead to Higher Labor Productivity

by Michael Ollinger, Sang V. Nguyen, Donald Blayney, William Chambers, and Kenneth Nelson

Processing plants in eight major food industries were highly productive before being acquired and they significantly improved their labor productivity afterward, Economic Research Service and U.S. Census Bureau researchers found in their analysis of Census data. The industries are meat packing, meat processing, poultry slaughtering and processing, cheese making, fluid milk processing, flour milling, feed processing, and oilseed crushing. The analysis suggests that mergers and acquisitions contributed to the general improvement in labor productivity from 1972-92, echoing an earlier ERS study. Labor productivity is defined as output per worker.

Keywords: Mergers and acquisitions, labor productivity, structural change, food processing, consolidation, grain processing, meat slaughter, dairy processing

In this publication...

• Entire Report
• Abstract, Acknowledgments, Contents, and Summary
• Introduction
• Merger and Acquisition Theories
• Production Plants as Appropriate Units of Analysis
• Two Census Bureau Datasets
• Acquired Plants Have Higher Initial Labor Productivity Than Nonacquired Plants
• Most Acquired Plants Have Higher Labor Productivity Growth
• Conclusion: Firms Buy Efficient Plants and Improve Their Labor Productivity
• References
• Appendix
• Report summary