Food Industry Mergers and Acquisitions Lead to Higher Labor Productivity

By Michael Ollinger, Sang V. Nguyen, Donald Blayney, Bill Chambers, and Ken Nelson

Economic Research Report No. (ERR-27) 39 pp, October 2006

Processing plants in eight major food industries were highly productive before being acquired and they significantly improved their labor productivity afterward, Economic Research Service and U.S. Census Bureau researchers found in their analysis of Census data. The industries are meat packing, meat processing, poultry slaughtering and processing, cheese making, fluid milk processing, flour milling, feed processing, and oilseed crushing. The analysis suggests that mergers and acquisitions contributed to the general improvement in labor productivity from 1972-92, echoing an earlier ERS study. Labor productivity is defined as output per worker.

Keywords: Mergers and acquisitions, labor productivity, structural change, food processing, consolidation, grain processing, meat slaughter, dairy processing, ERS, USDA

In this report ...

Chapters are in Adobe Acrobat PDF format.

• Report summary, 98 kb | HTML

• Abstract, Acknowledgments, Contents, and Summary, 178 kb.
• Introduction, 90 kb.
• Merger and Acquisition Theories, 89 kb.
• Production Plants as Appropriate Units of Analysis, 87 kb.
• Two Census Bureau Datasets, 318 kb.
• Acquired Plants Have Higher Initial Labor Productivity Than Nonacquired Plants, 100 kb.
• Most Acquired Plants Have Higher Labor Productivity Growth, 106 kb.
• Conclusion: Firms Buy Efficient Plants and Improve Their Labor Productivity, 78 kb.
• References, 81 kb.
• Appendix, 94 kb.

• Entire Report, 314 kb.

Updated date: October 23, 2006