In this article, we use structural econometrics to formally test whether the use of the AMAs by pork packers is the source of their market power on the spot (cash) market for live hogs. We extend Schroeter’s (1988) beef packing industry model and specify the packers’ conjectures of the change in total market procurement of live hogs through the spot market with respect to their own changes as the explicit functions of their AMAs supply stocks. Testing whether these stocks are significant determinants of the packers’ equilibrium conjectures can be taken as a test of whether the
use of the AMAs is a source of market power on the spot market for live hogs. The test is carried out using the USDA mandatory price reporting data. Our results show statistically significant market power of pork packers on
the spot market for live hogs, but the source of that market power cannot be narrowed down to the existence of AMAs stocks.

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