Analysis of Marketing Margins in the U.S. Lamb Industry

Factors affecting marketing margins were identified and assessed using a relative price spread technique. Margins were disaggregated into slaughter-to-wholesale and wholesale-to-retail for a more complete understanding. Marketing costs, concentration, demand, and price were used to explain variations within these margins. Results showed that packer concentration had a significant effect on margins. Forces of supply and demand (as represented by production and market price) and changes in marketing costs also explained the variation in margins. A higher degree of price transmission from slaughter-to-wholesale level was observed in comparison to the wholesale-to-retail level. Background rose from 43.6 to 65.9 percent (Packers and Stock-yards Administration). Prompted by a request from thirteen senators, in- Given such historical characteristics, the meat cluding then Senator Bentsen of Texas and Senator packig industry has been the focus of research Simpson of Wyoming, a Justice Department inves- related to the impact of structure on firm behavior, tigation of the lamb industry was launched in particularly with respect to pricing or marke