Dynamic Adjustment in Vertically Linked Markets : The Case of the U.S. Beef Industry

This duality model is used to investigate the dynamic structure of vertically linked sectors of the U.S. beef industry. The model employed allows for explicit hypothesis tests of the adjustment process and technology change. Vertically related sectors of the beef industry are included to emulate the organizational structure of the industry. Results suggest that the cow‐calf, feedlot, and beef processing sectors of the U.S. industry face significant adjustment costs. Another important finding is that imports may provide a way for the U.S. beef industry to adjust to short‐run market changes