On the economics of meat processing, livestock queuing, and worker safety

Abstract

Meat processing plants use inputs in fixed proportions, but these proportions vary with plant size. Shocks to the supply of labor and livestock induce allocative inefficiency, output reductions, and higher unit costs of production. Both labor conflicts and the pandemic caused long labor shortages resulting in unused capacity and large livestock queues. Industry concentration and vertical integration can mitigate some of these problems by internalizing queuing costs and by reallocating workers across plants. Daily shocks make plants operate with either too many workers or too many live animals. Larger plants choose to be labor-constrained more frequently, creating a trade-off between wages and safety for workers.