Is China's dairy processing industry oligopolistic and/or oligopsonistic?

2014 ◽  
Vol 6 (4) ◽  
pp. 644-653 ◽  
Author(s):  
Jiawu Dai ◽  
Xiuqing Wang
Keyword(s):  
Market Power ◽  
Food Industry ◽  
Dairy Farm ◽  
Raw Milk ◽  
Processing Industry ◽  
New Approach ◽  
Content Type ◽  
Dairy Processing ◽  
Primal Dual ◽  
Oligopsony Power

Purpose – Complaints about lower agricultural farm-gate price and higher consumer price have emerged in China in recent years. The large gap between dairy farm-gate price and consumer price gives rise to worries that China's dairy industry is characterized by strong degree of oligopoly. The purpose of this paper is to take the dairy processing industry as an epitome of China's food industry, and use a new approach to investigate whether it is oligopolistic and/or oligopsonistic. Design/methodology/approach – Based on a new proposed Primal-Dual Solow Residual model, the authors first test the hypothesis that there are significant oligopoly and oligopsony powers in China's dairy sector, and the latter is stronger. The authors then turn to measure these two kinds of market power using regressions of the model. Findings – The estimation results show that firms in the sector have both strong oligopoly and oligopsony power, but the latter is stronger than the former. Meanwhile, with the continuous reinforcement of competition in China's dairy sector, market power in both the upstream and downstream has decreased slightly. Originality/value – This paper is the first to simultaneously test oligopoly and oligopsony power in China's dairy sector. The empirical results explicitly imply that more attention should be paid to the raw milk purchase market.

scholarly journals Oligopsony power in agricultural market: the case of the Lithuanian raw milk market

2015 ◽  
Vol 37 (1) ◽  
pp. 114-121
Author(s):  
Aldona Stalgienė ◽  
Andrej Jedik
Keyword(s):  
Market Power ◽  
Raw Milk ◽  
Agricultural Products ◽  
Food Supply Chain ◽  
Processing Industry ◽  
Milk Processing ◽  
Empirical Industrial Organization ◽  
Power Models ◽  
Milk Market ◽  
Oligopsony Power

As the milk in Lithuania produces by a lot of milk producers, who sell their product to several customers (several large dairy processors), a hypothesis appears, that Lithuanian raw milk sector is oligopsonic. In this case, the price is not determined by the product producer, but by the buyers. This situation is typical for many agricultural products in food supply chain. This study aims to determine the market power of the Lithuanian milk processing industry on the market of raw milk. An empirical analysis is based on the New Empirical Industrial Organization (NEIO) market power models. Empirical research has showed that there was an oligopsony (0.28) in the Lithuanian raw milk market.

scholarly journals Social capital, power and information sharing – evidence from the Dutch meat processing industry

2020 ◽  
Vol 122 (11) ◽  
pp. 3343-3360
Author(s):  
Cees J. Gelderman ◽  
Janjaap Semeijn ◽  
Ferdi Ter Avest ◽  
Ellen Peeters
Keyword(s):  
Social Capital ◽  
Information Sharing ◽  
Information Exchange ◽  
Food Industry ◽  
Meat Processing ◽  
Processing Industry ◽  
Supplier Relationships ◽  
Content Type ◽  
Expert Power ◽  
Structural Social Capital

PurposeBuying companies in the food industry increasingly recognize the need to cultivate relationships with their suppliers. Social capital and power are important to understand buyer–supplier relationships. Maintaining these relationships appears highly dependent on the degree of information sharing.Design/methodology/approachThe study investigates how power and social capital dimensions are related to information sharing. A survey of first-tier suppliers in the Dutch meat processing industry was carried out. The data from 82 suppliers was analyzed using partial least squares.FindingsIt appears that expert power contributes to the cognitive and structural social capital. In contrast, coercive power showed no influence at all. Cognitive and structural social capital dimensions have a direct link to relational social capital, which significantly improves buyer–supplier information sharing in the food industry.Practical implicationsBuying companies can encourage supplier information sharing by building up their own expertise and cultivating social relationships. They should refrain from strong-handed practices.Originality/valueCompanies in the food and food processing industry are dependent on effective information exchange for their very survival. This study investigates the role of power and social capital in making such exchange possible and sustainable.

scholarly journals Dairy Products and Dairy-Processing Environments as a Reservoir of Antibiotic Resistance and Quorum-Quenching Determinants as Revealed through Functional Metagenomics

mSystems ◽  
2020 ◽  
Vol 5 (1) ◽  
Author(s):  
Elena A. Alexa (Oniciuc) ◽  
Calum J. Walsh ◽  
Laura M. Coughlan ◽  
Amal Awad ◽  
Cezara A. Simon ◽  
...  
Keyword(s):  
In Silico ◽  
Dairy Products ◽  
Metagenomic Library ◽  
Raw Milk ◽  
Quorum Quenching ◽  
Functional Screening ◽  
Functional Metagenomics ◽  
Content Type ◽  
Quorum Sensing Inhibitors ◽  
Dairy Processing

ABSTRACT Here, the role of the dairy-processing chain as a reservoir of antimicrobial resistance (AR) determinants and a source of novel biocontrol quorum-sensing inhibitors is assessed through a functional metagenomics approach. A metagenomic library comprising ∼22,000 recombinant clones was built from DNA isolated from raw milk, raw milk cheeses, and cheese-processing environment swab samples. The high-throughput sequencing of 9,216 recombinant clones showed that lactic acid bacteria (LAB) dominated the microbial communities of raw milk cheese, while Gram-negative microorganisms of animal or soil origin dominated the microbiota of raw milk and cheese-processing environments. Although functional screening of the metagenomic library did not recover potential quorum-sensing inhibitors, in silico analysis using an in-house database built specifically for this study identified homologues to several genes encoding proteins with predicted quorum-quenching activity, among which, the QsdH hydrolase was the most abundant. In silico screening of the library identified LAB, and especially Lactococcus lactis, as a relevant reservoir of AR determinants in cheese. Functional screening of the library allowed the isolation of 13 recombinant clones showing an increased resistance toward ampicillin, which in all cases was accompanied by a reduced susceptibility to a wide range of β-lactam antibiotics. This study shows that the dairy-processing environment is a rich reservoir of AR determinants, which vary by sample source, and suggests that combining next-generation sequencing with functional metagenomics can be of use in overcoming the limitations of both approaches. IMPORTANCE The study shows the potential of functional metagenomics analyses to uncover the diversity of functions in microbial communities prevailing in dairy products and their processing environments, evidencing that lactic acid bacteria (LAB) dominate the cheese microbiota, whereas Gram-negative microorganisms of animal or soil origin dominate the microbiota of milk and cheese-processing environments. The functional and in silico screening of the library allowed the identification of LAB, and especially Lactococcus lactis, as a relevant reservoir of antimicrobial resistance (AR) determinants in cheese. Quorum-quenching (QQ) determinants were not recovered through the execution of wet-lab function-based screenings but were detected through in silico sequencing-based analyses.

Market power and returns to scale in farm-value share determination

2019 ◽  
Vol 11 (1) ◽  
pp. 70-78 ◽  
Author(s):  
Ling Ma ◽  
Alexander Nuetah ◽  
Xiuqing Wang
Keyword(s):  
Market Power ◽  
Returns To Scale ◽  
Content Type ◽  
Equilibrium Displacement Model ◽  
Constant Return ◽  
Exogenous Shocks ◽  
Constant Returns To Scale ◽  
Oligopsony Power

Purpose The purpose of this paper is to investigate the role of market power and returns to scale in the determination of farm-value share. Design/methodology/approach This paper utilizes the equilibrium displacement model to investigate the role of market power and returns to scale in the determination of farm-value share. Contrary to the current literature, the paper incorporates oligopoly power, oligopsony power and non-constant return to scale into one generalized model, which systematically enables us investigate the impacts of market power on the determination and changes of farm-value share. Findings The results imply that market power as well as non-constant returns to scale is central to the understanding of farm-value share. These, in turn, indicate that ignoring the impacts of market power and degree of return to scale may overestimate or underestimate the impacts of exogenous shocks on changes in farm-value share. Originality/value Thus, to the best of the authors’ knowledge, no literature has examined the co-existence of oligopsony power, oligopoly power as well as non-constant return to scale in farm-value share determination. This paper therefore tries to fill this gap.

scholarly journals Arcobacter butzleri, Arcobacter cryaerophilus, and Arcobacter skirrowii Circulation in a Dairy Farm and Sources of Milk Contamination

2015 ◽  
Vol 81 (15) ◽  
pp. 5055-5063 ◽  
Author(s):  
Federica Giacometti ◽  
Alex Lucchi ◽  
Antonietta Di Francesco ◽  
Mauro Delogu ◽  
Ester Grilli ◽  
...  
Keyword(s):  
Dairy Farm ◽  
Dairy Herd ◽  
Raw Milk ◽  
Living Environment ◽  
Feed Water ◽  
Industrialized Countries ◽  
Content Type ◽  
Milk Contamination ◽  
Dairy Animals ◽  
Milking Machine

ABSTRACTEven though dairy cows are known carriers ofArcobacterspecies and raw or minimally processed foods are recognized as the main sources of humanArcobacterinfections in industrialized countries, data onArcobacterexcretion patterns in cows and in milk are scant. This study aimed to identify potentially pathogenicArcobacterspecies in a dairy herd and to investigate the routes ofArcobactertransmission among animals and the potential sources of cattle infection and milk contamination. A strategy of sampling the same 50 dairy animals, feed, water, and milk every month for a 10-month period, as well as the sampling of quarter milk, animal teats, the milking environment, and animals living on the farm (pigeons and cats), was used to evaluate, by pulsed-field gel electrophoresis (PFGE), the characteristic patterns in animals, their living environment, and the raw milk they produced. Of the 463 samples collected, 105 (22.6%) were positive forArcobacterspp. by culture examination. All the matrices except quarter milk and pigeon gut samples were positive, with prevalences ranging from 15 to 83% depending on the sample. Only threeArcobacterspecies,Arcobactercryaerophilus(54.2%),A. butzleri(34.2%), andA. skirrowii(32.3%), were detected. PFGE analysis of 370 isolates from positive samples provided strong evidence ofArcobactercirculation in the herd: cattle likely acquire the microorganisms by orofecal transmission, either by direct contact or from the environment, or both. Water appears to be a major source of animal infection. Raw milk produced by the farm and collected from a bulk tank was frequently contaminated (80%) byA. butzleri; our PFGE findings excluded primary contamination of milk, whereas teats and milking machine surfaces could be sources ofArcobactermilk contamination.

Traceability systems in the Western Australia halal food supply chain

2015 ◽  
Vol 27 (2) ◽  
pp. 324-348 ◽  
Author(s):  
Delma Poniman ◽  
Sharon Purchase ◽  
Joanne Sneddon
Keyword(s):  
Food Processing ◽  
Food Production ◽  
Food Industry ◽  
Network Effect ◽  
Business Networks ◽  
Food Processing Industry ◽  
Processing Industry ◽  
Content Type ◽  
Traceability System ◽  
Halal Food

Purpose – The purpose of this paper is to explore the emergence and implementation of traceability systems in the Western Australian (WA) Halal food industry. In particular, to understand how individuals in facilitating organizations perceive the Halal idea logic and the benefits that a traceability system can provide to the Halal food processing industry. Design/methodology/approach – An empirical qualitative approach was employed to examine these issues utilizing in-depth interviews. Thematic analysis was carried out using Leximancer software. Findings – Findings suggest that individual’s perception of Halal idea logic is aligned to the roles they perform. These perceptions were impacted by the specific objectives or business interests of each organization. Facilitating organizations also perceive that traceability systems are a strategic tool in the Halal food processing industry. Practical implications – The research provides insights into how to improve existing understanding of the Halal idea logic within Halal food business networks and the benefits of implementing traceability systems in Halal food production. Joint activity between firms creates a network effect, where the value created is greater than that which the firms alone can create. Originality/value – Though traceability systems have become increasingly popular in the food industry, little research has been undertaken to understand how individuals in facilitating organizations perceive these systems, particularly in the growing Halal food industry. Hence, the study contributes to the literature of traceability studies and the area of change and process adaptation in business relationships in the context of halal food production.

Market power, ownership and technical efficiency

2019 ◽  
Vol 12 (2) ◽  
pp. 275-294 ◽  
Author(s):  
Jiawu Dai ◽  
Xun Li
Keyword(s):  
Market Power ◽  
Technical Efficiency ◽  
Stochastic Frontier ◽  
Firm Level ◽  
Content Type ◽  
New Model ◽  
Stochastic Frontier Production Function ◽  
Stochastic Frontier Cost Function ◽  
Frontier Production Function ◽  
Oligopsony Power

Purpose The purpose of this paper is to estimate oligopsony power in the upstream factor market and oligopoly power in the downstream product market. On this basis, the paper intends to examine the effects of both oligopsony and oligopoly power as well as ownership on technical efficiency which were rarely discussed in previous studies. Design/methodology/approach First, based on the stochastic frontier production function, the paper constructs a new model that is capable to estimate oligopsony power for each observation. Second, the paper employs the popular dual stochastic frontier cost function to estimate marginal cost as well as oligopoly power. Then, the system GMM method with different sets of instrumental variables is applied to test the effects of the two-sided market power and ownership on technical efficiency. Findings Using unbalanced panel data at the firm level, the paper demonstrates that oligopsony power is significantly variant across different sectors. The most notable point is that oligopsony power in China’s soya and peanut oil industries is negative, while that in pork and beef industries is much stronger than those in other industries. In addition, state-owned enterprises (SOEs) are found to be less technically efficient in most of the selected industries, while SOEs with higher oligopsony power tend to be more technically efficient than non-state-owned enterprises(NSOEs), which is consistent with the quiet life hypothesis. Originality/value This paper sheds light mainly on three aspects. First, it proposes a new model to estimate oligopsony power for each single firm. Second, it tests the effect of oligopsony power on technical efficiency. Third, it distinguishes the differential effect of oligopsony power on technical efficiency between SOEs and NSOEs.

scholarly journals Efficiency and Market Power in Pakistani Dairy Processing Industry in Pakistan

2011 ◽  
Vol 7 (10) ◽  
Author(s):  
Nadeem Bhatti ◽  
Shoukat Ali Raza ◽  
Muhammad Aamir Hashmi ◽  
Ashi Zeeshan ◽  
Faiz M. Shaikh
Keyword(s):  
Market Power ◽  
Processing Industry ◽  
Dairy Processing

Development of dairy productions in the regions of Ukraine: raw material aspect

2020 ◽  
pp. 42-51
Author(s):  
Svitlana Ishchuk ◽  
Olena Lyakhovska
Keyword(s):  
Milk Production ◽  
Dairy Products ◽  
Food Industry ◽  
Raw Milk ◽  
Raw Material ◽  
Dairy Production ◽  
Material Base ◽  
Agricultural Enterprises ◽  
Dairy Processing ◽  
Domestic Food

The production of milk and dairy products is a significant segment of the domestic food industry with a share of 14% in its structure. During 2014-2019, the volume of dairy production in Ukraine decreased by 15.68%, which caused the loss of 5 positions in the world ranking by this indicator. The purpose of the article is to determine the development potential of dairy production in Ukraine in the regional context based on the raw material supply. According to the results of the research, higher efficiency of agricultural enterprises (the share of which in the structure of raw milk production in Ukraine was less than 30%) as compared to households was found. Comparative estimates show that the regional structure of dairy products is more geographically concentrated than the structure of raw milk production. According to the results of grouping of regions of Ukraine by the volume of production of raw milk and its industrial processing products, only four regions had high complex potential in this segment in 2019, two – milk processing potential, six – raw milk potential, while the potential of the remaining 12 regions was insignificant. The transformation of commodity and geographic structures of export-import operations with dairy products in Ukraine was investigated. The main problems of the dairy processing segment of the domestic food industry were identified, namely: insufficient potential and poor quality of the raw material base for industrial dairy processing; interaction imbalance between suppliers of raw milk and industrial producers; the presence of a shadow segment and a high degree of falsification in the domestic dairy market; etc. A number of mechanisms were proposed to further enhance the dairy sector development in Ukraine. The basic directions of state support for agricultural enterprises producing raw milk and industrial enterprises producing dairy products were outlined.

Estimating market power in the Chinese pork-packing industry: a structural approach

2019 ◽  
Vol 12 (1) ◽  
pp. 57-70
Author(s):  
Hao Lan ◽  
Xiaojin Wang
Keyword(s):  
Supply Chain ◽  
Market Power ◽  
Structural Model ◽  
Market Competition ◽  
Developed Countries ◽  
Food Markets ◽  
Content Type ◽  
Food Market ◽  
Pass Through ◽  
Oligopsony Power

Purpose The purpose of this paper is to investigate market power in the Chinese pork supply chain. The authors aim to explain why a steady rise in prices is observed in the sector, apart from existing evidence on incomplete/asymmetric cost pass-through and concerns of growing concentration and consolidation in the sector. Design/methodology/approach This study uses a new empirical industrial organization model for both oligopoly and oligopsony power to measure the degree of market power exerted on consumers and hog farmers simultaneously. Findings By examining annual panel data across provinces in China, the authors find that both oligopoly and oligopsony powers exist in the pork supply chain. In particular, the authors determine that a higher degree of market power is found to influence prices paid to hog farmers than prices paid by pork consumers. Estimates of key elasticities in the Chinese pork supply chain are also updated based on the structural model estimation and the latest data. Research limitations/implications Due to the lack of data at a more granular level of geography, the authors are only able to estimate market power by three major economic regions. Practical implications The findings provide useful information for future policy analyses of Chinese food markets. First, the pork-packing industry should be of great concern in terms of market power and its influence on consumers’ and farmers’ welfare. It is essential to take into consideration market power in the pork supply chain before making any public policy regarding the pork market. Furthermore, following economic theory and experience from developed countries, large meat packers will eventually vertically control hog farmers given their stronger oligopsony power over the upstream. Vertical integration may be the next important issue in terms of food market competition. Finally, the results may also draw the government’s attention to investigating market competition in all major food markets. Originality/value The empirical evidence draws attention to the issue of food market competition in one of the largest and most important meat-packing markets in China. The authors hope to encourage further discussions on pork and hog market regulations and related public policies.

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