Safety Regulation: For Whom? The Effects of Poultry Slaughter Line Speed Regulation on Firm Profits

This event is part of the SOAS Economics Seminar Series 2025/26.

This paper examines the effects on firm profits of three regulatory changes in the U.S. poultry industry from the 1990s through 2020. The U.S. Department of Agriculture regulates line speeds in poultry slaughter establishments to prevent foodborne illness. 

At the same time, large poultry companies consistently lobby for higher line speeds, and existing literature cites regulations that limit line speed as a bottleneck to firm productivity and profitability.  I use synthetic control methodology to estimate the impact of regulatory changes that increased maximum slaughter line speed on profit rates, profit margins, and gross profits for five major poultry firms. I find that line speed increases do not consistently boost any measure of profitability in the short-run. 

Even more surprising, after a line speed change in 1999, all three profitability measures decreased for all companies involved. The results in this case, combined with data on chicken production and pricing as well as information from primary sources such as firm annual reports, indicate that increased line speeds led to overproduction, which lowered poultry prices and ultimately reduced profitability. Overproduction poses a significant challenge for the industry, where chicken, as a highly perishable product, cannot be stockpiled to await favorable market conditions. 

My findings suggest that firms push for deregulatory measures that may ultimately intensify the very competition that undermines their profits. These findings offer important insights for policymakers who must weigh trade-offs and often view line speed increases as an unqualified positive for the industry.

Header image credit: Artem Beliaikin via Unsplash.