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

This paper examines the effects on firm profits of three regulatory changes to slaughter line speeds in the U.S. poultry industry from the 1990s through 2020. Poultry firms consistently lobby for higher line speeds to increase throughput and reduce per-unit costs, and existing literature cites regulation limiting line speed as a bottleneck to firm productivity. I use synthetic control methodology to assess the impact of regulation that allows slaughter line speed to increase on profit rates, profit margins, and profits for five major poultry firms. I complement the quantitative findings with qualitative analysis including the use of primary sources such as firm annual reports. I find that line speed increases do not consistently boost any of the three measures of profitability. In fact, after one notable regulatory change, increased line speeds led to overproduction, driving down poultry prices and ultimately reducing profitability. Overproduction poses a significant challenge for the poultry industry, where chicken, as a highly perishable product, cannot be stockpiled to await favorable market conditions. The data suggest that firms, which compete over prices and therefore try to minimize costs, push for deregulatory measures that may ultimately intensify the very competition that undermines their profits. As faster slaughter line speeds are also worse for poultry plant workers, the findings offer important lessons for policymakers about balancing productivity goals with market stability and worker safety in future regulatory frameworks.