Structural Changes in the Meat Wholesaling Industry

Abstract

F UNDAMENTAL and deep-rooted structural and organizational changes are in evidence in the processing and marketing sectors of the nation's agricultural economy as well as at the producer level. Judging, however, from the nature and results of agricultural economic studies made in recent years, the structural changes in the processing and distributive industries appear to have been largely ignored by research technicians. There are several possible reasons for this apparent indifference. Some researchers, the institutionalists particularly, seem to have been content after calculation of a few concentration ratios to toss all questions arising from structural changes into the political arena. Others have sagely dismissed them with the observation that the structural changes which have come about appear to have been accompanied by improvements in operational efficiency and little, if any, degeneration in pricing efficiency.' Still another group, it appears, avoids studies of industry structure for the reason that the reseach techniques and tools available are inadequate. It is difficult to believe that the obstacles to study of market structure, although formidable, are insurmountable. In addition, the economic effects of changes in the structure of processing and distributing industries are of primary concern, today, to producers, business concerns, trade associations, other industry leaders, and legislators. Accordingly, an expanded program of research on market structure appears defensible. First, however, we need to know the nature and extent of structural changes under way and this, as related to a particular industry, is the principal task undertaken in this paper. Second, and involved here is a challenge to theoreticians and econometricians, principles are needed which explain (1) expected effects of various factors or conditions on market structure, and (2) the effects of market structure on such factors as prices, costs and output. The principles, when provided, can be used to adjust for inapplicabilities of presently available models to study of structural change.2 They can be used either to develop new models or to modify