Sunday, October 31, 2021

The U.S. Beef Industry as and Intermediate Group

In 2018, four companies slaughtered around 85% of grain-fed cattle in the U.S. The big four processers are Cargill, Tyson Foods, JBS SA, and National Beefpacking Co. With these four firms controlling over 80% of beef slaughtering industry (it depends how you break down the meat industry, but almost any breakdown has these four firms as the dominant firms), they constitute an oligopy. Specifically, since there's no one large firm, they can be classified as an "intermediate" group. The lobbying patterns of the industry support this, with no one firm dominating lobbying, and Tyson Foods and JBS having spent the most and third-most on political lobbying in the general meatpacking industry in 2021

Lobbying across the past 20 years by the industry has also shaped a lot of the legislation with Tyson itself spending $25 million across that timeframe. The lobbying supported specific members of Congress who have voted against climate change legislation and cap-and-trade systems, both of which would force a reduction in meat production or capital investment in greener meat production, ultimately affecting bottom-line profits of the companies. Funnily enough, Clinton was even nicknamed "Chicken Man" becuase of Tyon's support for him during his presidential runs. These lobbing efforts by the oligopolistic industry work to capture favorable regulation for the meat industry. Both the oligopolistic industry structure and the lobbying patterns and efforts of the industry provide a strong example of Olson's "intermediate" groups and of the Stigler-Peltzman Model of Regulation. 

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