The U.S. Pork and Beef Sectors: Divergent Organizational Patterns, Paradoxes and Conflicts

John D. Lawrence; Marvin L. Hayenga

The U.S. Pork and Beef Sectors: Divergent Organizational Patterns, Paradoxes and Conflicts

In: Paradoxes in Food Chains and Networks

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John D. Lawrence

John D. Lawrence Iowa State University 468 Heady Hall Ames, IA 50011 Phone: 515-294-6290 Fax: 515-294-1700 jdlaw@iastate.edu

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Marvin L. Hayenga

Marvin L. Hayenga Iowa State University 468 Heady Hall Ames, IA 50011 Phone: 515-294-6290 Fax: 515-294-1700 jdlaw@iastate.edu

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Type:: Chapter

Pages:: 512–521

DOI:: https://doi.org/10.3920/9789086865079_048

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The vertical coordination systems between livestock producers and processors have dramatically shifted toward long-term contract coordination or vertical integration in the pork sector; however, fed cattle producers still rely heavily on spot market or short-term contract linkages with meat packers. Concerns about the negative influences of contracts—enhancing packer market power and causing lower prices for independent producers—have clearly been much more strident in the beef industry. We postulate that the large size of pork producers in the Southeast and few processors available there, the greater specific investments for pork producers and branded pork processors, and the beef industry’s greater length and breadth of the multiple stage supply chain and later emphasis on brand merchandising programs provide the leading rationale for the different patterns of organizational change in these two industries. Related paradoxes—the great success of formula pricing contracts is likely to lead to its demise, and the concerns about contract linkages negatively affecting prices have been greater in the industry where there is less contracting.

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Paradoxes in Food Chains and Networks

E-Book ISBN:: 9789086865079

Publisher:: Wageningen Academic

Print Publication Date:: 10 Oct 2002

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- Life Sciences

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The U.S. Pork and Beef Sectors: Divergent Organizational Patterns, Paradoxes and Conflicts

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Paradoxes in Food Chains and Networks

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