Excel and Monfort has already spent large sums on market testing of branded products. If the large meat packers become more involved in product development and branding, it will mean more diversified red meat products for consumers and expanded markets for livestock producers. Packers also will become more aggressive in marketing their products and pressure retain stores for more shelf space to merchandise the products. This expanded marketing should benefit both consumers and livestock producers. Disadvantages of Fewer and Larger Firms On the other hand, fewer and larger firms can evolve into an environment of monopoly practices.
Fewer packers mean fewer buyers and less price competition.
With fewer national packers, some regions within the U.S. could be in a monopsony situation. As firms gain more control of the market, they often try to control more closely the quality of the inputs they buy, i.e., more product specification buying. If, for example, livestock do not fit into a narrow range of specifications, they do not qualify for premium prices or may even be heavily discounted. Livestock producers would have less freedom in choosing the type of livestock they produce. Fewer buyers can lead to less public marketing information, with more transactions completed by private treaty or formula pricing.