Location behavior of USDA inspected meat and poultry slaughter plants in the United States: A spatial probit approach

After the implementation of new health inspection regulations in 2000 there was a precipitous decline of the number of slaughter plants in the United States. Particularly affected were small and very small slaughter plants. This loss of capacity is affecting local food supply chains and may limit local supply options. The empirical analysis in this thesis uses the spatial distribution of people and livestock to analyze the location choice decisions of existing and new meat and poultry slaughter facilities. Utilizing a spatial probit estimator the model analyzes how location factors from the existing stock of USDA inspected meat and poultry slaughter plants in 2007 are different from new USDA inspected plants established during the time period 2008-2010. This comparison provides an understanding of factors that affect the location decision of new USDA inspected plants. Empirical results reveal that slaughter plant location behavior is strongly affected by the location of existing firms, infrastructure, and agglomeration factors. Inspection type as well as input supplies also significantly influences the location choice of USDA inspected meat and poultry plants. The analysis further reveals that new USDA inspected meat and poultry slaughter plants increasingly tend to locate in the Northeast region, as compared to the North Central Region and other areas of the United States