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GAO Report: Industry Structure Not Affecting Commodity or Food Prices

Tuesday, August 11, 2009

(American Meat Institute)

The structure of the processing segment of the beef, pork and dairy sectors and the retail sector overall has not adversely affected commodity or food prices, according to a new report by the United States Government Accountability Office (GAO).

The report concluded that while concentration generally has increased at all levels of the food marketing chain in all agricultural sectors since the 1980s, overall food prices and food prices in each of the five major agricultural sectors have increased about as much as prices for consumer goods and services overall through July 2008.

In addition, the report concludes that the empirical economic literature has not established that concentration in the processing segment of the beef, pork, or dairy sectors or the retail sector overall has adversely affected commodity or food prices. Most of the studies reviewed either found no evidence of market power or found efficiency effects that were larger than the market power effects of concentration.

All of the experts said that concentration probably did not cause the 2008 increase in commodity and food prices, which were more likely due to factors such as higher energy costs and growing global demand for grains.

To view this report in its entirety, click here: http://gao.gov/products/GAO-09-746R

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