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Regional Impacts of a U.S. Hog Slaughter Plant Closing: The Thorn Apple Valley Case
Author(s) -
Raper Kellie Curry,
Cheney Laura M.,
Punjabi Meeta
Publication year - 2006
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/j.1467-9353.2006.00320.x
Subject(s) - competition (biology) , agricultural economics , closing (real estate) , procurement , distribution (mathematics) , production (economics) , economics , agricultural science , biology , ecology , finance , mathematical analysis , mathematics , management , macroeconomics
As the 1998 U.S. hog market collapse unfolded, Thorn Apple Valley ceased hog slaughter operations at its Detroit, Michigan plant. We examine the impacts on Michigan live hog prices relative to Eastern Corn Belt hog prices. Results indicate that Michigan producers' relative price advantage diminished after the closure as procurement competition changed. As the impacts of the 1998 hog market collapse were absorbed, Michigan producers' relative price advantage became consistently negative. Examination of Michigan's market hog production distribution indicates postclosure shifts away from production in areas geographically near to Thorn Apple Valley and growth in counties geographically closer to alternative packers.