Market Power in the Irish Beef Processing Industry

Abstract

Irish beef processors and cattle farmers have been involved in a lasting controversy on power asymmetry. This paper estimates the degree of market power in the Irish beef processing industry. The New Empirical Industrial Organization approach is extended for estimation, and the market power is testified by conjectural elasticity with supply and demand functions, indicating that beef processors exert a significant market power on cattle farms. Export-orientation and high subsidies are two outstanding features in the Irish beef industry. Exports and subsidies are shown in this paper to have an insignificant influence on market power. This paper confirms that beef processors can exercise market power on farmers to lower prices below the marginal cost.

Market power and cost‐efficiency effects: Broiler packing industry in South Korea

“…Furthermore, our focus on the Asian poultry market is particularly noteworhty since the market has received little attention in the existing literature, despite its high concentration. The literature on concentration issues has mainly focused on specific areas, such as the United States (Azzam, 1997; Chung et al, 2018; Ji & Chung, 2016; Surathkal & Chung, 2019), hog and cattle market (Azzam & Andersson, 2008; Fu et al, 2021; Wang et al, 2019), and the dairy industry (Guo et al, 2016; Hatirli et al, 2006). This underscores the novelty of our empirical evidence and potential for our study to inspire future research in the understudied area.…”

Transmisión vertical y horizontal de precios en el sub-sector ganado carne de bovino en México

“…El análisis de la asimetría en la transmisión de precios entre los diferentes niveles de una cadena de comercialización puede rechazar o aceptar la sospecha de que los intermediarios de ganado y procesadores de carne de bovino ejercen poder de mercado sobre los ganaderos y de mantener los precios del ganado por debajo de un nivel competitivo para obtener mayores ganancias y perjudicar las de los ganaderos, generando competencia imperfecta (Fu et al 2021).…”

Market Concentration, Producer Organizations, and Policy Measures to Strengthen the Opportunities of Farmers for Value Addition—Empirical Findings from the Austrian Meat Supply Chain Using a Multi-Method Approach

“…In such situations, economic theory predicts farmers' prices being lower than those provided through a competitive market, as downstream firms are able to exercise buyer power [1]. Such firms may use their market position (monopsony power) to gain economic rents at the cost of producers, as recently exemplified in a study on the Irish beef market [2]. The undesirably lower quantity provided by the market creates welfare loss.…”

“…Apart from this, two recent legislative acts aim at contributing to a better functioning of food commodity markets: (1) Based on the Commission Implementing Regulation (EU) 2019/1746, the collection of statistical data necessary for the analysis of price formation mechanisms along the agricultural and food supply chain will be improved. (2) The Directive (EU) 2019/633 of the European Parliament and of the Council addresses imbalances in bargaining power between suppliers and buyers by defining and sanctioning unfair trading practices in business-tobusiness relationships in the agricultural and food supply chain. Due to how recently these were implemented, the effects of these regulations have not yet materialized; this may also be due to the fact that some member states have been reluctant to implement them in national legislation (in July 2021, the commission began infringement procedures against 12 Member States for not transposing EU rules banning unfair trading practices (details are available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_21_3903) (access on 18 November 2021).…”

“…Nes et al (2021) compared the concentration of EU food markets at several stages; however, the farm level was excluded [16]. In contrast to these studies and others, such as Fu et al (2021), we evaluate market concentration at multiple stages of the supply chain [2]. Our research adds empirical evidence for a country with many small farms which are addressed in the SDGs and show how better insights can be obtained by complementing quantitative findings with information obtained by producer and stakeholder interviews.…”