Competitiveness of U.S. Food Processing: Benefits from Primary Agriculture

Abstract

High-value agricultural products such as processed foods are becoming increasingly important for both the production and trade of the United States. Efficiency gains in primary agriculture may be transferred to the processed food sector in the form of cheaper inputs because price declines and productivity growth have been coincidental in agriculture. In turn, efficiency gains in the processed food sector are transferred, in part, back to primary agriculture by increasing the derived demand and, thus, mitigating the decline in the latter's price. Efficiency gains are relatively more important in primary agriculture than in food processing. Policies which encourage productivity growth that lowers the production costs can increase the competitiveness of both sectors. The ultimate beneficiaries of the price declines in primary agriculture and food processing are consumers. Copyright 1996, Oxford University Press.

Geography of underweight and overweight among women in India: A multilevel analysis of 3204 neighborhoods in 26 states

“…Those Indians who have become wealthy in the past decades have increased the demand for animal-derived foods (Kaur et al, 2005) which uses up a significant portion of the cheaper raw unprocessed food grains (Gopinath et al, 1996). Use of these unprocessed grains to grow food animals diminishes the supply of unprocessed foods and increases the price of these staples that make up the diet of the disadvantaged groups.…”

The application of trade and growth theories to agriculture: a survey

“…Griliches (1992) concluded after a survey of the empirical literature that spillovers in agriculture and industry exist and that their magnitude may be large. Recent studies by Gopinath, Roe and Shane (1996) and Gopinath and Roe (1999) con¢rm these results. In the latter, the authors found empirical evidence for substantial interindustry spillovers from farm machinery to both primary agriculture and food processing in the United States for the period 1961^1991.…”

Agricultural Prices, Selection, and the Evolution of the Food Industry

“…For example, in the US, whether material inputs alone, which include primary agricultural goods, account for almost all of the growth and of the increase in competitiveness in agrifood sectors, it appears that all …rms did not gain to the same extent, as the concentration in market shares continued to increase (see Gopinath et al 1996 and2004). Similarly, in France, the relative prices of agricultural commodities have declined for the period 1973-2004(Butault, 2008 whereas the market shares of the largest agrifood …rms have increased (Blanchard et al, 2010).…”

“…Our model helps reconcile some well-established empirical results regarding the food processing industry, which may seem to be contradictory. Indeed, because the agrifood …rms use intensively agricultural goods as inputs and are sensitive to agricultural prices (Gopinath, 1996;Paul and MacDonald, 2003), we might expect that a decline in relative prices of agricultural commodities reduces the production costs of food processing …rms allowing them to increase their sales or inducing the entry of new …rms. However, the e¤ects of input prices deserve much more attention.…”

“…However, the e¤ects of input prices deserve much more attention. Indeed, one the one hand, similar to the other manufacturing sectors, food processing …rms exhibit heterogeneity in terms of productivity, plant size, and market share (Gopinath et al, 1996 and2004;Blanchard et al, 2010). On the other hand, food …rms operate under imperfect competition and sell di¤erentiated products (Sexton and Lavoie, 2001;McCorriston, 2002).…”