The exercise of market power by broiler processing firms (integrators) isplausible because local markets for growers are concentrated and becausegrowers face hold-up risks arising from substantial investments in specificassets set against limited integrator purchase commitments. This articleexplores the links between local integrator concentration and growercompensation under production contracts using data from the 2006 broilerversion of the USDA's Agricultural Resource Management Survey. Results ofthis study, which account for characteristics of the operation and specificfeatures of the production contract, suggest that greater integratorconcentration results in a small but economically meaningful reduction ingrower compensation.