Interregional competition in the United States turkey industry

Bawden, D; Carter, H; Dean, G

Interregional competition in the United States turkey industry

Authors

D. Lee Bawden
H. O. Carter
G. W. Dean

Authors Affiliations

D. Lee Bawden was Assistant Professor of Agricultural Economics, University of Wisconsin, formerly Postgraduate Research Economist, University of California, Berkeley; H. O. Carter was Associate Professors of Agricultural Economics and Associate Agricultural Economists in the Experiment Station and on the Giannini Foundation, Davis; G. W. Dean was Associate Professors of Agricultural Economics and Associate Agricultural Economists in the Experiment Station and on the Giannini Foundation, Davis.

Publication Information

Hilgardia 37(13):437-531. DOI:10.3733/hilg.v37n13p437. June 1966.

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Abstract

The purpose of this study is to predict the future locational changes of the turkey industry, both in the short and long run, with particular attention given to the competitive position of California.

Three spatial equilibrium models, including 60 producing and 58 consuming regions, are developed. The components of the various models include regional production and processing costs, regional demand and supply functions, and transportation costs.

The short-run ex post model suggested that, given the present location of production and consumption in the United States, the transportation of turkey follows reasonably efficient shipment patterns. The short-run ex ante model predicted prices, quantities, and shipments by region recursively for the three-year period 1962-1963-1964, based on data available in 1961. Predictions for the first year were reasonably accurate, but errors tended to accumulate beyond this. The long-run ex ante model predicted a long-run relocation of the industry, with concentrations of production in the Midwest and South, with the West (including California) dropping out of turkey production.

Various policies designed to improve California’s long-run competitive position were examined, using the interregional models. Neither a uniform United States minimum wage of up to $1.25 per hour nor a 50 per cent reduction in transportation rates on dressed turkey exports from California would prevent the state from being a net importer of turkey. Transportation rates on feed inshipments would need to be reduced nearly 40 per cent for California to remain even self-sufficient in turkey production.

The interregional models also were used to examine certain aspects of the 1962 turkey marketing order. Freezing production location by historical allotment could increase the aggregate production and processing cost of meeting long-run demand by up to 14 per cent. Adapted to the specific case, and supplemented with judgment and political considerations, the models could be useful in assessing the effects of various types and levels of production control and even in the administration of such programs.

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