Published by the US Department of Agriculture's Economic Research Service (USDA ERS), the report examined activities within the meat, poultry, dairy and grain processing industries between 1972 and 1992.
Using US Census Bureau data to examine processing plants in these industries, the ERS found that mergers and acquisitions (M&A) "dramatically" improved the general labor productivity.
The plants, which were "highly productive before being acquired, significantly improved their labor productivity afterward," with some often doubling their output per worker, it said.
Industries examined included meatpacking, meat processing, poultry slaughter and processing, cheese making, fluid milk processing, flour milling, feed processing, and oilseed crushing.
Mergers and acquisitions in the US food industry have provoked controversy for many years. Critics are concerned that mergers, by reducing the numbers of firms and increasing industry concentration, make it easier for firms to increase output prices and lower wages and input prices.
Others argue that M&As increase efficiencies and boost productivity by allowing companies to lower costs and provide consumers with goods at lower prices.
According to the ERS, until 1977, consolidation was not much of an issue for most food industries. At that time, the average four-firm-concentration ratios for the eight food industries examined were about 31 percent.
A wave of mergers and acquisitions led to a jump in average concentration to about 44 percent by 1992, said the report, which examined if these M&As were efficient, and whether they fostered productivity in 'acquired' companies.
Firms in the eight industries examined transferred about 20 percent of industry market share to other firms through M&As over each of three 5-year periods: 1977-82, 1982-87, and 1987-92. By contrast, M&As accounted for only about 7 percent of all output over 1972-77.
According to the report, M&As have been driven by slow growth in consumer demand for meat, dairy, and grain products and technological changes that have led to a sharp rise in output per worker and in plant sizes.
"Food production plants that are acquired yield efficiencies if productivity improves and generate synergies if the plants were productive before the acquisitions and then raise labor productivity to an even higher level afterward," it said.
Over the past 5 years, high-profile M&As include the acquisitions of IowaBeef Processors by Tyson and ConAgra by a private group in meat packing, Pillsbury by General Foods in flour milling, and parts of Dean Foods by Suiza in fluid milk processing.