CONTEMPORARY ECONOMICS OF ANIMAL AGRICULTURE: MARKET POWER, COLLUSION AND ANIMAL WELFARE

The structure of different animal/meat industries and their relationship to the retails sector generates interesting dynamics where the retail sector dominates the meat and poultry sectors in terms of dictating marketing trends in products development and requiring environmentally friendlier production practices. For example, the profound changes in consumer preferences and attitudes towards animal welfare, filtered through the retail chains and reflected in the change in the consumers purchasing patterns created an environment where the animal sector had no choice but to respond to new demands by changing husbandry practices towards more humane treatment of animals. The examples are numerous: from the ban of gestation creates for sows and cages for laying hens in the production of table eggs to stricter requirements for organic labels both in terms of nutritional requirements and outdoor access for birds. Because all these required modifications in husbandry practices substantially increase the cost of production, to protect the profit margins, meat and poultry sector responded by trying to exert their market power towards upstream participants (farmers and contract growers) and arguably even engaged in the collusive behavior in the downstream markets. This situation creates a rich research agenda for agricultural economists to engage in.Based on the above description of the meat and poultry sectors, I propose three research programs focusing on:Economics of animal welfareCollusion to fix prices in the broiler industrySwine production quotas, monopsony power and farm valuesThe goals of the proposed 5-year project are to conduct several stand-alone studies within the outlined research programs mainly in collaboration with different graduate students working on their respective Ph.D. dissertations.