Effect of Food Industry Mergers and Acquisitions on Employment and Wages

Empirical analysis of mergers and acquisitions in eight important food industries suggests that workers in acquired plants realized modest increases in employment and wages relative to other workers. Results also show that mergers and acquisitions reduced the likelihood of plant closures while high relative labor costs encouraged plant shutdowns. These results differ from commonly held views that mergers and acquisitions lead to fewer jobs, wage cuts, and plant shutdowns.Food product industries, mergers and acquisitions, plant closures, Agribusiness, Industrial Organization,

Food Industry Mergers and Acquisitions Lead to Higher Labor Productivity

Processing plants in eight major food industries were highly productive before being acquired and they significantly improved their labor productivity afterward, Economic Research Service and U.S. Census Bureau researchers found in their analysis of Census data. The plant-level data on production inputs and costs provided a detailed picture of food-production facilities involved in mergers and acquisitions. The industries are meatpacking, meat processing, poultry slaughtering and processing, cheese making, fluid milk processing, flour milling, feed processing, and oilseed crushing. The analysis suggests that mergers and acquisitions contributed to the general improvement in labor productivity, echoing an earlier ERS study. Labor productivity is defined as output per worker.Mergers, acquisitions, labor productivity, consolidation, structural change, Agribusiness, Industrial Organization, Productivity Analysis,

Structural Change in the Meat, Poultry, Dairy and Grain Processing Industries

Consolidation and structural changes in the food industry have had profound impacts on firms, employees, and communities in many parts of the United States. Over 1972-92, eight important food industries underwent a structural transformation in which the number of plants declined by about one-third and the number of employees needed to staff the remaining plants dropped by more than 100,000 (20 percent). The number of plants in one other industry also dropped, but that industry added jobs. Economists generally attribute structural changes such as these to rising or falling demand and shifts in technology. This report examines consolidation and structural change in meatpacking, meat processing, poultry slaughter and processing, cheese products, fluid milk, flour milling, corn milling, feed, and soybean processing. Plant size and output per employee rose sharply in all industries, and even industries with rapidly growing demand—such as soybean processing and poultry slaughter/processing—used fewer plants. These findings suggest that technological change was the major force driving structural change.structural change, food processing, consolidation, grain processing, meat slaughter, dairy processing, Industrial Organization,

Food Industry Mergers and Acquisitions Lead to Higher Labor Productivity

Processing plants in eight major food industries were highly productive before being acquired and they significantly improved their labor productivity afterward, Economic Research Service and U.S. Census Bureau researchers found in their analysis of Census data. The plant-level data on production inputs and costs provided a detailed picture of food-production facilities involved in mergers and acquisitions. The industries are meatpacking, meat processing, poultry slaughtering and processing, cheese making, fluid milk processing, flour milling, feed processing, and oilseed crushing. The analysis suggests that mergers and acquisitions contributed to the general improvement in labor productivity, echoing an earlier ERS study. Labor productivity is defined as output per worker

Structural Change in the Meat, Poultry, Dairy and Grain Processing Industries

Consolidation and structural changes in the food industry have had profound impacts on firms, employees, and communities in many parts of the United States. Over 1972-92, eight important food industries underwent a structural transformation in which the number of plants declined by about one-third and the number of employees needed to staff the remaining plants dropped by more than 100,000 (20 percent). The number of plants in one other industry also dropped, but that industry added jobs. Economists generally attribute structural changes such as these to rising or falling demand and shifts in technology. This report examines consolidation and structural change in meatpacking, meat processing, poultry slaughter and processing, cheese products, fluid milk, flour milling, corn milling, feed, and soybean processing. Plant size and output per employee rose sharply in all industries, and even industries with rapidly growing demand—such as soybean processing and poultry slaughter/processing—used fewer plants. These findings suggest that technological change was the major force driving structural change

Effect of Food Industry Mergers and Acquisitions on Employment and Wages

Empirical analysis of mergers and acquisitions in eight important food industries suggests that workers in acquired plants realized modest increases in employment and wages relative to other workers. Results also show that mergers and acquisitions reduced the likelihood of plant closures while high relative labor costs encouraged plant shutdowns. These results differ from commonly held views that mergers and acquisitions lead to fewer jobs, wage cuts, and plant shutdowns