Commodity, food prices unaffected by industry structure

by Bryan Salvage
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WASHINGTON — Neither commodity nor food prices have been adversely affected by the structure of the processing segment of the beef, pork, dairy as well as the overall retail sector, according to a new report by the U.S Government Accountability Office.

The American Meat Institute relays the study concluded that although concentration generally has increased at all levels of the food marketing chain in all agricultural sectors since the 1980s, overall food prices and food prices in each of the five major agricultural sectors have increased about as much as prices for consumer goods and services overall through July 2008.

The report further concludes the empirical economic literature has not established that concentration in the processing segment of the beef, pork or dairy sectors, and the retail sector overall, has adversely affected commodity or food prices. Most of the studies reviewed either found no evidence of market power or found efficiency effects that were larger than the market power effects of concentration.

Concentration probably did not cause the 2008 increase in commodity and food prices, which were more likely due to factors such as higher energy costs and growing global demand for grains, all of the experts said.

Click here to read the entire report.

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