Price and Quality of Pork and Broiler Products: What's the Role of Vertical Coordination?
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Significant changes in vertical coordination of the U.S. broiler industry many years ago may provide useful insight into the rapid changes occurring in today's pork industry. Under production contracts and vertical integration, the broiler industry developed and grew into the leader in U.S. meat production-outpacing beef and pork. Production efficiencies, quality assurances, and convenience in product offerings have led to falling chicken prices and rising per capita consumption. Incentives for contracting in the pork industry are similar to those in the broiler industry in many ways. The similarities suggest that consumers may also expect plentiful supplies of high-quality pork products at economical prices.