Abstract
In this paper, we draw on microeconomic theory to show that farm animal enclosure regulations can and have lead to increased farm-level concentration in affected industries in the U.S. The desirability of this increased concentration is a function of modern industry structures. Farm animal enclosure requirements can push traditional “short” supply chains like eggs toward vertical integration. However, vertically integrated systems (e.g., broiler chickens and hogs) may benefit from the induced farm-level concentration by increasing bargaining power among contract farmers. In all systems, the increased farm-level concentration induced by enclosure requirements may lead to greater ability to solve future collective action problems like wastewater pollution and antimicrobial resistance.
Highlights
Concentration in the animal agricultural sector is a growing concern (Watson and Winfree, 2021)
For the four industries most affected by farm animal enclosure requirements, the shift in concentration induced by farm animal enclosure requirements is not an abrupt transition away from the “Jeffersonian Ideal” of a countryside speckled with small farms
The resulting increased farm-level concentration may lead to greater ability to solve future collective action problems like wastewater pollution and antimicrobial resistance
Summary
Concentration in the animal agricultural sector is a growing concern (Watson and Winfree, 2021). It summarizes the current state of farm animal welfare regulation in the U.S Section 3 explains how animal housing standards lead to increased farm-level concentration. We test this result empirically based on outcomes in the California and U.S egg industry following the imposition of minimum cage size requirements in January 2015.
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