Technical Bulletin No. (TB-1881) 30 pp

February 2000

Structural Change and Competition in Seven U.S. Food Markets

Recent trends in mergers and acquisitions in the U.S. food sector--food manufacturers, wholesalers, and retailers--raise concerns about market power. In the presence of market power, farmers may receive lower than competitive farm prices, and consumers may pay higher than competitive retail prices. This study presents empirical tests of market power at the national level for seven food categories: beef, pork, poultry, eggs, dairy, fresh fruit, and fresh vegetables. At the national level, our tests provide evidence of competitive conduct in both the sale of final food products and the purchase of farm ingredients.

Keywords: Retail food and farm prices, market power, structural change, cointegration

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