An Empirical Model of Pricing in the Catfish Industry

The adoption of aquacultural products has created an imbalance of market power between catfish producers and a processing sector that exerts a monopsonistic power in certain regions of the U.S. such as west Alabama.However, because of the recent changes caused by vertical integration of thecatfish industry, the existence of an oligopolistic power has been identified inthe catfish industry. An empirical model of pricing in the catfish industry was developed using a theoretical model proposed by Appelbaum. An analysis of the market structure was conducted to provide estimates of conjectural elasticities over time. Conjectural elasticities were used to construct the oligopoly power index. Results show some evidence of the existence of oligopolistic power in the catfish industry that further suggests some degree of price enhancement.