Progress 01/15/24 to 01/14/25
Outputs
Target Audience:The target audiences for this reporting period are other academics and the public at large.The two mediums uses are peer-reviewed academic journals and departmental outreach publications. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?Results from Article 1 have beenpublished in a peer-reviewed journal, and disseminated through a departmental publicationsthat is distributed to stakeholders, and through an AI-Generated Podcast by Google Notebook. What do you plan to do during the next reporting period to accomplish the goals?Finish drafting Article 3 and submit it for pee-review to the American Journal of Agricultural Economics.
Impacts
What was accomplished under these goals?
Constructed a dataset from a national survey of small meatpackers we conducted in 2023. The dataset formed the basis of a research paper (Article 1) entitled "Resilience of Small Beef Packers and the USDA Meat Supply Initiative." The paper has been published in2024 in Agribusiness: An International Journal. Constructed state-level COVID-19 resilience indices for beefpacking based on the methodology I developed in a Food Policy journal article on the comparative resilience of U.S. and European Union meat processing. We used the state-level indices to estimate the impact of state-level beef packing concentration, meatpacking labor conditions, and covid-mitigation policy. We report the results in a journal article (Article 2) entitled" COVID-19 Resilience Metrics for U.S. Beef Packing: Determinants and Policy Implications". Status: Article under review in Journal of Agricultural and Resource Economics. Developed and estimated an econometric dominant-oligopoly competitive-fringe model that simulates the resilience, market power, cost-efficiency, and social welfare tradeoff due to exogenous entry by small meatpackers, represented by the competitive fringe in the model. The paper (Article 3) , "Industrial Restructuring, Resilience, Cost Efficiency, and Welfare: U.S. Beef Packing." Status: In progress.
Publications
- Type:
Peer Reviewed Journal Articles
Status:
Published
Year Published:
2024
Citation:
Dhoubhadel, S., A. Azzam, and B. Khanal. 2024. Resilience of Small Meat Packers to COVID-19 and the USDA Supply Chain Initiative." Agribusiness: An International Journal
- Type:
Other
Status:
Published
Year Published:
2024
Citation:
Small beef-packer resilience during COVID-19: Evidence and Policy Implications. Cornhusker Economics ( November 20, 2024)
- Type:
Other Journal Articles
Status:
Under Review
Year Published:
2024
Citation:
Dhoubhadel, S., A. Azzam, and B. Khanal. Resilience in the U.S. Beef Supply Chain: Key Determinants and Implications for Post-COVID-19 Industry Transformation. Journal of Agricultural and Resource Economics
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Progress 01/15/23 to 01/14/24
Outputs
Target Audience:Since outputs related to the project have been disseminated solely through refereed academic journals, the target audience is other academics andresearchers interested in the performance of the meat industry. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?
Nothing Reported
What do you plan to do during the next reporting period to accomplish the goals?Having established the predictive accuracy of the policy simulation model, the next step is to use itto simulate the effect of the USDA-sponsored expansion of smaller meat establishments on resilience. Resilience and other performance measures, such as beef price spreads, aremeasured under alternative expansion scenarios by the difference between the actual cattle slaughter during COVID-19 and the simulated cattle slaughter without COVID-19.
Impacts
What was accomplished under these goals?
Objective 1:Estimate pre-COVID and COVID packer conduct and its implications for pricing, resilience, and social welfare. Objective 2:Assess the implications of restructuring the beef for resilience, pricing, and social welfare. Developed and validated a resilience-policy simulation model for the US beefpacking industry based on the theoretical dominant-oligopsony competitive-fringe model I published in 2023 inApplied Economics Lettersunder the title "RestructuringUS Meatpacking as a Resilience Strategy Against Capacity Disruptions: Will it Work?" Using historical data from 1985 onwards, the model not only provides estimates of pre-COVID and COVID packer conduct and marginal processing cost for the dominant packers and the fringe, but it also hashigh within-samplepredictive accuracy, a rare feature of structural oligopolymodels. The next step is to use the model to simulate the effect of the USDA-sponsored expansion of smaller meat establishments on resilience. Resilience and other performance measures, such as beef price spreads, aremeasured under alternative expansion scenarios by the difference between the actual cattle slaughter during COVID-19 and the simulated cattle slaughter without COVID-19.
Publications
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Progress 01/15/22 to 01/14/23
Outputs
Target Audience:Reached academic audiences through two refereed publications: Azzam, Azzeddine, and Sunil Dhoubhadel. "COVID-19, beef price spreads, and market power."Journal of Agricultural and Resource Economics47, no. 2 (2022): 462-476. Azzam, Azzeddine. "Restructuring US meatpacking as a resilience strategy against capacity disruptions: will it work?."Applied Economics Letters(2022): 1-4. Reached public audiences through interviews with various media outlets: The Study of Meatpacking and its Complexity. Market to Market, Iowa-PBS podcast (April 18, 2022). USDA to fund far-ranging study of meatpacking resilience. Nebraska Today (April 5, 2022) Also reported in Meat+Poultry, MeatingPlace, and Supermarket Perimeter. UNL Agriculture Economist to Study Meat Packing Industry. Interview with WNAX Radio (April 5, 2022). A beef 'bigs': What rethink of competition starts with the meat industry. The Christian Science Monitor (February 18, 2022). Interviewed by Laurent Belsie. Biden's $1 billion bet to make beef cheaper: When will prices fall? CNN Business (January 4, 2021) Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided?The project has provided an opportunity to learn about constructing survey questionnaires and administering them by phone. How have the results been disseminated to communities of interest?Results have been disseminated through academic journals and various media outlets. What do you plan to do during the next reporting period to accomplish the goals?Objective 1: Re-estimate pre-covid and covid packer conduct using a dominant-oligopoly/oligopsony competitive-fringe model published in Azzam and Dhoubhadel (2022).The modelrequires historical market share data of thetop four packers and empirical strategies to identify their residual derived demand for cattle. Objective 2: Expand the theoretical dominant-oligopoly/oligopsony competitive-fringe model and use it for simulating the effect of expanding small-packer slaughter capacity on resilience and associated changes in consumer and cattle feeder welfare.
Impacts
What was accomplished under these goals?
Objective 1: The question addressed hereis whether the spike in beef price spreadsduring the covid-19 related processing plantshutdowns was due to noncompetitive beef packer behavior,supply and demand, or both. Method 1:We developed an empirical structural oligopoly/oligopsony model that uses the demand/supply rotation technique to identify pre-covid19 to covid19 packer conduct and its effect on beef price spreads. The results, published byAzzam and Dhoubhadel(2022), did not find (statistical) evidence of noncompetitive behavior during the shutdowns, concluding the spike in the spreads was most likely due to covid-19 related changes in consumer demand and packer costs due to shutdowns. Method 2: We developed a structural dominant-oligopoly competitive fringe that also uses the demand/supply rotation technique to identify conduct. Appropriate data is being gathered to empirically implement the model. Objective 2: The issue addressed here is whether the policy of expandingthe slaughter capacity of smaller packers can enhance the resilience of the beef packing industry to covid-19 like capacity disruptions. Since the policy is in still progress, the likely future impact is addressed through simulation that combines industrial organization theory and parameters that summarize industry behavior during covid-19. To that end: A theoretical dominant-oligopsony competitive-fringe model is formulated toassessthe implication of expanding the slaughter capacity of smaller meat processing establishments for the beef packing industry's resilience to capacity disruptions. The model, which was published byAzzam (2022), shows that, if resilience is defined as undisrupted slaughter, small packersshould share the cattle market equally with the dominant packers. To expand the definition of resilience, Indices of resilience to covid-19 were developed and operationalized using US and European Union (EU) beef slaughter data. The EU applicationwas supported by a Fulbright grant in Sweden during the summer of 2022. Results are reported in a paper under review. A survey questionnaire was administered by phone to 260 out of 560 US beef packers to gather information on their capacity and its utilization pre-covid19 and during covid-19. The information is useful for determining whetherplant shutdowns were correlated with plant size. That information is useful for the simulation model. The packer survey continues as of thisreport.
Publications
- Type:
Journal Articles
Status:
Published
Year Published:
2022
Citation:
Azzam, Azzeddine, and Sunil Dhoubhadel. "COVID-19, beef price spreads, and market power." Journal of Agricultural and Resource Economics 47, no. 2 (2022): 462-476.
- Type:
Journal Articles
Status:
Awaiting Publication
Year Published:
2022
Citation:
Azzam, Azzeddine. "Restructuring US meatpacking as a resilience strategy against capacity disruptions: will it work?." Applied Economics Letters (2022): 1-4.
- Type:
Journal Articles
Status:
Under Review
Year Published:
2022
Citation:
Azzam, Azzeddine, Ing-Marie Gren, and Hans Andersson. Comparative resilience of US and EU beef processing to the Covid-19 pandemic: measurement and policy implications
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