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

October 2006

Food Industry Mergers and Acquisitions Lead to Higher Labor Productivity

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

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