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In this paper, we provide a conceptual framework for analyzing the market and welfare effects of mergers that result in multiproduct firms producing strongly demand-related products and derive the conditions under which such type of mergers improve welfare. The Tyson-IBP merger is used as an empirical application of the model. Using estimates of own- and cross-price elasticities of demand for beef, pork, and chicken, we infer that the Tyson-IBP merger has generated the cost-efficiencies necessary to make consumers and livestock producers better off.

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The economic profitability of adding value to catfish processing wastes by further processing the waste into fishmeal and fish oil was evaluated with capital budgeting investment and financial risk analysis. Five fishmeal/oil plant sizes (48‐h capacities of 181 metric tons, 91 metric tons, 45 metric tons, 23 metric tons, and 5 metric tons) were modeled. Estimated net present values were positive for all but the smallest plant size, indicating economic feasibility. The estimated modified internal rate of return was moderate and ranged from 19% for the largest plant (at 10% cost of capital and 15% reinvestment rate) to 3% for the smallest plant (at 10% cost of capital and 3% reinvestment rate). The smallest plant sizes were the most affected by risks of increased operating costs. This analysis showed potential for catfish processing plants to add value by processing wastes into fishmeal/oil, under the assumptions used in this study. However, comprehensive assessment of the market for fishmeal/oil products from catfish processing waste is needed to assess overall feasibility of such a venture.

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