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A Conjectural Variations Approach to Detecting Collusion: The Broiler Chicken Antitrust Litigation Case

  • Qiwen Sheng and Tomislav Vukina ORCID logo EMAIL logo
Published/Copyright: January 21, 2025
Journal of Agricultural & Food Industrial Organization
From the journal Journal of Agricultural & Food Industrial Organization Volume 23 Issue 1

Abstract

In this paper we investigated the dynamic of competition in the U.S. broiler chicken industry from 2000 to 2023, focusing on the detection and the implications of alleged collusive behaviour. By employing a structural econometrics approach, we estimated the conjectural elasticities, offering an explanation for how potential collusive arrangements evolved over time. Our most important results show that the alleged collusion period elevated the conjectural elasticities for all defendants but increased the conjectural elasticity of the group of three largest publicly traded broiler companies the most. These results suggest that the industry tacit collusion could have morphed into explicit collusion, with the largest three firms being the likely leaders of the conspiracy. In addition, the computed Lerner indexes show that the market power has increased during the collusion period relative to the pre-collusion period and remained elevated afterwards, suggesting stubborn impact of collusion on competition even during the post collusion period.

Keywords: cartel; antitrust litigation; conjectural elasticities; broiler industry
Corresponding author: Tomislav Vukina, Department of Agricultural and Resource Economics, North Carolina State University, Raleigh, USA, E-mail:
Data Appendix
Table A1:

Defendant and Co-conspirator Market Shares Based on Live Weight 2000-2020.

(Percentages) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Georgia dock defendants
Tyson 24.22 23.80 23.61 23.77 23.45 22.73 22.19 20.66 20.05 21.64 21.69 21.51 20.68 20.81 20.32 19.79 19.47 19.19 21.64 20.49 20.24 19.99 20.09 21.09
Pilgrim’s pride 6.90 8.95 8.74 15.75 15.55 15.86 25.04 23.74 21.35 18.94 17.10 17.60 17.44 18.41 16.41 16.12 15.89 16.29 15.48 15.63 15.81 15.83 15.04 15.08
Wayne farms 4.16 3.99 4.10 4.01 3.82 3.90 4.30 4.20 4.13 4.12 4.20 4.49 4.41 5.01 5.19 5.20 5.02 4.91 4.86 4.90 4.80 4.90 4.72 4.76
Sanderson 3.40 3.47 3.65 3.89 3.99 3.95 4.40 4.85 5.70 5.89 6.01 6.53 6.84 6.83 6.74 7.11 7.62 8.29 8.62 8.71 9.01 8.91 8.77 8.84
Fieldale farms 2.12 1.88 1.80 1.80 1.78 1.76 1.84 1.78 1.90 2.04 1.97 1.96 1.87 1.77 1.83 1.87 1.92 1.88 1.84 1.83 1.80 1.73 1.70 1.78
Koch 0.97 0.95 2.00 2.08 2.00 1.94 2.71 2.67 2.63 4.86 5.01 4.98 6.45 6.32 6.22 5.99 6.12 5.98 5.85 6.45 6.36 6.32 6.28 6.26
Claxton poultry 0.85 0.86 0.85 0.88 0.86 0.84 0.83 0.82 0.80 0.87 0.84 0.92 0.97 1.00 1.01 0.99 1.01 1.02 1.03 0.97 0.96 0.93 0.93 0.92
Mar-Jac 0.60 0.90 0.87 0.93 0.90 0.87 0.86 0.93 0.92 0.96 0.93 0.92 0.92 0.90 1.91 1.87 1.86 1.80 1.76 1.71 1.68 1.67 1.63 1.62
Harrison poultry 0.50 0.50 0.50 0.60 0.60 0.60 0.60 0.63 0.63 0.62 0.61 0.66 0.68 0.71 0.70 0.67 0.58 0.55 0.54 0.53 0.54 0.54 0.52 0.65
Sub-total 43.72 45.30 46.12 53.72 52.93 52.45 62.77 60.28 58.11 59.95 58.35 59.56 60.25 61.77 60.32 59.59 59.50 59.89 61.62 61.21 61.20 60.29 59.16 60.35
Other defendants
Perdue 7.83 7.34 7.29 7.23 7.42 6.48 7.73 7.57 7.37 7.59 7.26 7.15 7.18 7.21 7.15 7.55 7.51 7.40 7.41 7.03 6.73 6.56 6.52 6.28
Mountaire 2.90 2.96 3.03 3.20 3.33 3.44 3.66 3.97 3.98 4.13 4.17 4.41 4.73 4.82 5.04 5.09 5.07 5.12 5.04 5.68 6.03 6.30 6.06 6.21
Foster farms 2.67 3.79 3.19 3.13 3.21 3.31 3.16 3.05 3.05 3.30 3.51 3.62 3.74 3.68 3.47 3.44 3.22 3.15 2.79 3.09 3.01 2.89 2.91 2.91
OK foods 2.02 2.30 1.93 2.21 2.32 2.25 2.26 2.23 2.00 2.20 2.12 1.71 1.95 1.91 1.88 1.81 1.63 1.63 1.60 1.55 1.53 1.26 1.28 1.28
Peco 1.89 1.84 1.85 1.91 2.34 2.47 2.22 2.07 2.19 2.59 2.63 3.04 3.21 3.27 3.20 3.30 3.58 4.16 4.21 4.09 3.98 3.77 3.65 3.96
House of raeford 1.79 1.84 1.83 1.99 2.11 2.19 2.62 3.08 2.88 2.84 3.01 2.74 2.90 2.98 3.09 3.12 3.03 3.02 2.90 2.85 3.07 3.08 3.04 3.05
Simmons 1.47 1.51 1.51 1.38 1.45 1.50 1.47 1.60 1.92 2.01 2.21 1.78 1.77 1.76 1.73 1.80 1.82 1.82 1.78 1.78 2.43 2.29 2.23 2.34
George’s 1.35 2.18 2.11 2.11 2.04 2.10 2.09 2.10 2.02 2.04 2.14 2.21 2.51 2.44 2.47 2.37 2.44 2.47 3.13 3.11 3.10 3.14 3.13 3.11
Case farms 1.23 1.09 1.13 1.10 1.16 1.21 1.24 1.30 1.40 1.58 1.61 1.63 1.93 2.01 2.10 2.08 2.12 2.11 2.07 2.09 2.09 2.09 2.07 2.08
Amick farms 0.60 0.60 0.70 0.70 0.70 0.82 0.86 0.98 1.00 1.16 1.49 1.86 1.90 1.88 1.98 2.23 2.37 2.27 2.27 2.38 2.43 2.45 2.82 3.05
Sub-total 23.75 25.47 24.57 24.97 26.08 25.76 27.33 27.95 27.80 29.44 30.16 30.16 31.81 31.96 32.09 32.78 32.78 33.16 33.20 33.65 34.39 33.83 33.71 34.27
Co-conspirators
Allen Harim 1.66 1.53 1.48 1.55 1.55 1.63 1.63 1.85 1.70 1.52 1.32 0.63 0.61 0.65 0.74 0.85 1.01 0.96 0.87 0.79 0.74 0.66 0.68 0.76
Total 69.12 72.29 72.17 80.24 80.57 79.83 91.74 90.09 87.61 90.91 89.83 90.35 92.67 94.37 93.15 93.22 93.29 94.02 95.69 95.66 96.33 94.78 93.55 95.37

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Received: 2024-04-02
Accepted: 2024-12-30
Published Online: 2025-01-21

© 2025 Walter de Gruyter GmbH, Berlin/Boston

Articles in the same Issue

  1. Frontmatter
  2. Research Articles
  3. Animal Welfare Ballot Initiatives and the Vote-Buy Gap
  4. A Conjectural Variations Approach to Detecting Collusion: The Broiler Chicken Antitrust Litigation Case
  5. Collusion and Price Behavior in the U.S. Pork Industry
  6. Price Connectedness in the Futures Markets of Livestock Commodities
  7. Unintended Competition from Volume Controls: A Note on the Horne v. Department of Agriculture Decision
  8. A Theoretical Assessment of Informal Agricultural Cooperation Under Distrust: Implications from a Network Perspective
https://doi.org/10.1515/jafio-2024-0020
Keywords for this article
cartel; antitrust litigation; conjectural elasticities; broiler industry

Articles in the same Issue

  1. Frontmatter
  2. Research Articles
  3. Animal Welfare Ballot Initiatives and the Vote-Buy Gap
  4. A Conjectural Variations Approach to Detecting Collusion: The Broiler Chicken Antitrust Litigation Case
  5. Collusion and Price Behavior in the U.S. Pork Industry
  6. Price Connectedness in the Futures Markets of Livestock Commodities
  7. Unintended Competition from Volume Controls: A Note on the Horne v. Department of Agriculture Decision
  8. A Theoretical Assessment of Informal Agricultural Cooperation Under Distrust: Implications from a Network Perspective
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