Structural Change in the Meat and Poultry Industry and Food Safety Regulations

This study uses plant-level micro-data over 1987-2002 and a translog cost function to examine structural change in the cattle and chicken slaughter and pork processing and sausage-making industries during a period of increasing food safety oversight. Results suggest that labor and capital cost shares rose and the meat share of costs dropped in all industries and that long-run costs rose in the cattle slaughter, pork processing, and chicken slaughter industries. Results also suggest that events may have favored large cattle slaughter plants throughout the period and large chicken slaughter plants during the implementation period of the Pathogen Reduction Hazard Analysis Critical Control Point (PR/HACCP) rule spanning the 1997-2002 period. There is no evidence that events favored large plants over small plants in pork processing and sausage-making. This is important because regulatory effects must have been small in those industries if the relationship did not change. [EconLit citations: L510; L160]. (C) 2010 Wiley Periodicals, Inc.