The Consumers’ Beef about Beef Prices

• Author: Roger D. Blair
• DOI: http://doi.org/10.1177/0003603X221149366
• Published date: 01 March 2023
• Date: 01 March 2023
• Subject Matter: Articles

https://doi.org/10.1177/0003603X221149366

The Antitrust Bulletin

2023, Vol. 68(1) 107 –116

© The Author(s) 2023

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DOI: 10.1177/0003603X221149366

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Article

The Consumers’ Beef about Beef

Prices

Roger D. Blair*

Abstract

There have been allegations that the dominant meatpackers have conspired to raise beef prices in

violation of §1 of the Sherman Act. In this article, I examine the market structure and find it to be

conducive to collusion, which may be tacit or overt. The article analyzes the allegations of collusion

in a partial conspiracy model. The empirical evidence appears to be consistent with the implications

of the theory. The article also considers evidentiary problems for the plaintiffs as well as the pursuit

of private damages and public sanctions.

Keywords

monopoly, collusion, price-fixing, antitrust

I. Introduction

The protein markets—beef, chicken, eggs, lamb, pork, salmon, tuna, and turkey—are fraught with

allegations of collusion in both the input markets and the output markets. Although many consumers

have begun to shy away from red meat, beef continues to be of major importance. In 2020, beef con-

sumption in the United States amounted to 27.6 billion pounds.1 Beef is over a $123.3 billion industry.2

Consequently, collusion in the beef market could impose substantial welfare losses.

The focus of this article is on the alleged price-fixing conspiracy among the largest meatpackers in

the United States.3 We begin with an overview of the structure of the beef industry and the conditions

that are conducive to collusion. Based on that structure and the allegations in the antitrust complaints,

we provide an economic model of collusion by adapting the dominant firm model.

In the next section, I review the structure of the beef market and provide some evidence that it

is conducive to collusion among the four major meatpackers: Cargill, JBS, National Beef, and Tyson.

In section III, I spell out the antitrust allegations that have been leveled against the four dominant

*Professor, Department of Economics, University of Florida, Gainesville, FL, USA; Affiliate Faculty, Levin College of Law,

University of Florida, Gainesville, FL, USA

Corresponding Author:

Roger D. Blair, Professor, Department of Economics, University of Florida, 224 Matherly Hall, P.O. Box 117140, Gainesville,

FL 32611-7140, USA.

Email: rdblair@ufl.edu

1149366ABXXXX10.1177/0003603X221149366The Antitrust BulletinBlair

research-article2023

1. USDA Table 1. U.S. beef industry, https://www.ers.usda.gov/topics/animal-products/cattle-beef/statistics-information/.

2. Id.

3. The allegations of collusion among the major meatpackers in purchasing fed cattle are addressed elsewhere. See Brianna

L. Alderman, Meatpackers Feed on Fed Cattle, 68 Antitrust Bull. (2023).