Policy Documents

No. 104 - Opportunities and Benefits from Pork Industry Organization (Study)

Ross Korves –
October 20, 2004

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Changes in consumer demand for pork products over the past 20 years have led to rapid changes in the way hogs are produced and marketed. Vertical integration--in which successive stages of production and distribution are placed under the control of a single company--and virtual integration--when processors choose to use qualified suppliers who ensure the availability of at least a portion of their needs with known quality--are two of the most pervasive and controversial changes. This analysis finds increased integration in the pork industry benefits hog producers, consumers, and processors. Production and marketing contracts are helping many small and mid-sized producers better manage risk while gaining access to the capital and markets they need to remain competitive. Well-intentioned policymakers should leave well enough alone.