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English Pig Producers and 'Imperfect Competition'

by 5m Editor
14 January 2009, at 6:37am

UK - According to the June English pig herd census, over 40 per cent of the national breeding herd is now outdoors, writes Digby Scott for the National Pig Association (NPA).

If one assumes three-quarters of the pork from the progeny of these pigs ends up with an "outdoors" description of some sort on the label, it means nearly a third of English pigmeat is now differentiated in a way the continentals simply cannot copy.

This means English pig producers are shedding their "perfect-competition" strait-jacket. It means they are (in theory at least) moving away from being price-takers.

"Perfect-competition" is the economists' term for a market in which there are many small producers, they do not differentiate their product, they are price-takers, and they make "zero economic profit" ie. just enough to stay in business. Sound familiar?

There are few perfect examples of perfect-competition. Cabbages would be a candidate perhaps, and certainly continental pigmeat. But what are the implications for English pig producers as they move from perfect-competition to imperfect-competition?

More to follow soon...