Analysis of the Turkish broiler sector: the case of price competition

Turhan Ş., Ozbag B. C., Cetin B.

NEW ZEALAND JOURNAL OF AGRICULTURAL RESEARCH, vol.49, no.4, pp.431-437, 2006 (SCI-Expanded) identifier identifier


Production technology used in the Turkish broiler sector is well developed. Eighty percent of production is mostly carried out at integrated facilities, using internationally competitive techniques that are employed in developed countries. Broiler slaughter capacities are 15000-17000 units/h. The increase in the concentration ratio of top four firms (CR4) in the broiler sector has caused doubts about the competitiveness. According to 2004 data, the top 20 firms produce 84% of the total production and CR4 is 38.7%. In this study, a differentiated product oligopoly model has been applied to the Turkish broiler sector, and the price competition from 1998 to 2004 has been analysed. The top five firms, which have the highest competitive power and which are the only firms that meet the European Standards and are exporting broiler meat to the EU countries, have been included in the analysis. The results show that these firms have elastic demand and positive price cost margin.