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Changes in Agriculture and Food Production in NAE Since 1945 | 35

Table 2-3. Concentration in the U.S. and Canadian food industry.

Commodity Market and Top Firms 2007 Concentration Ratio* Historical CR4
Beef packing (Tyson, Cargill Excel, Swift & Co, National Beef) CR4=83.5% CR4=72% (1990)
Pork packing (Smithfield, Tyson, Swift & Co, Hormel) CR4=66% CR4=37% (1987)
Broilers (Pilgrims' Pride, Tyson, Perdue, Sanderson Farms) CR4=58.5% CR4=35% (1986)
Turkeys (Smithfield/Maxwell Foods, Hormel, Cargill, Sara Lee) CR4=55% CR4=31% (1988)
Flour milling (Cargill/CHS, ADM, ConAgra) CR3=55% CR4=40% (1982)
Soybean crushing (ADM, Bunge, Cargill) CR3=71% CR4=54% (1977)
Food retailing (Wal-Mart, Kroger, Albertson's, Safeway, Ahold USA) CR5=48% CR5=24% (1997)
Selected information about concentration in the Canadian agriculture and food industry
Commodity market and top firms Concentration Ratio, 2006
Beef packing (Cargill, Lakeside Packers [owned by Tyson], XL Foods) CR3=75%
Durum milling (ADM, Robin Hood Foods [owned by J.M. Smucker Co]) CR2=57%
Flour milling (ADM, Robin Hood Foods [owned by J.M. Smucker Co]) CR2=57%

*Concentration Ratio refers to the market share that the top four firms (or three as in the case of soybean crushing, and five in the case of food retailing) control. Concentration Ratios are calculated using statistics reported in trade journals. Source: Hendrickson and Heffernan, 2006, 2007.

Livestock production in Europe is less consolidated than in North America. For instance, the top 10 integrated broiler producers in Europe account for only 36% of production compared with 66% in the US.
     The grain trading sector worldwide is dominated by three NAE based firms. These three players are in the pro­cess of rationalizing crushing capacity, closing down some factories and increasing the utilization rate of others.
     During the  1990s, intensive mergers among farmer dairy cooperatives left only two major US cooperatives, one of which currently produces 33% of the US milk supply. Two of the largest private companies merged to become the

 

largest dairy processor, controlling 30% of the US milk sup­ply (Hendrickson and Heffernan, 2005). Retail consolida­tion in dairy increased prices for consumers, yet decreased farm gate prices (Cotterill and Franklin, 2001). Across Eu­rope, there has been a process of international consolidation in dairy processing, led by farmer-owned businesses, in the race to remain competitive with multinational companies. Concentration in dairy is also a trend in Central and Eastern Europe (Csaki et al., 2004).
     It is estimated that 60% of retail food purchases in the United States go to the ten largest global food corporations (Lyson and Raymer, 2000). The major food manufacturing

Figure 2-6. Trends in consolidation in the US food industry from 1990 to 2007. Source: Hendrickson and Heffernan, 2007

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