Brazilian beef exportation agro industry: structure and strategic

Abstract

The Brazilian beef agrichain demonstrates an increasing participation in the international market share with impact on the strategic behavior of the meatpacking industry. This paper aims to examine the structural characteristics of the sector, to evaluate the meatpacking industries’ efficiency and strategic behavior. Specifically, it seeks to: i) characterize the export sector of Brazilian beef; ii) identify the strategic behavior of the processing industry; and c) examine the impact of export beef prices on internal market prices. The research is developed through a survey of secondary data with a qualitative and quantitative approach. The market structure is analyzed considering three theoretical contributions: i) Structure-Conduct-Perfomance paradigm; ii) Contestability; and iii) Transaction Cost Economics. The conclusion is that the industry presents economical efficiency, in spite of the concentration ratio and the strong barriers to entrance basically related to scale. The efficiency is related to price competitiveness. The economical efficiency does not exempt, however, the possibility of exercise of market power for the leader companies of the sector. Finally, this research confirms one high correlation between the practiced prices in the international market and the domestic market.