|
AgEcon Search >
Cornell University >
Department of Applied Economics and Management >
Working Papers >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/127239
|
| Title: | Can the Small Dairy Farm Remain Competitive in U.S. Agriculture? |
| Authors: | Tauer, Loren W.
Mishra, Ashok K. |
| Issue Date: | 2003-09 |
| Series/Report no.: | WP 2003-28 |
| Abstract: | The cost of milk production by farm size was decomposed into frontier and
efficiency components with a stochastic cost curve using data on 755 USA dairy farms
from the year 2000. The estimated frontier function is much flatter than the composite
cost curve, and although the frontier cost of production decreases with farm size, that cost
reduction is not as pronounced as a cost curve that includes inefficiency. The higher cost
of production of many smaller farms is caused by inefficiency. The 50-cow farm has a
frontier cost of production of $10.05 and an inefficiency cost of $10.27 for a composite
cost of $20.32. In contrast, the 1,000-cow herd has a frontier cost of production of $9.27
and an inefficiency cost of $2.82 for a composite cost of $12.09. The implication is that
the efficient 50-cow farm is competitive with the average 1,000-cow farm, but not with
the efficient 1,000-cow farm. |
| URI: | http://purl.umn.edu/127239 |
| Institution/Association: | Cornell University>Department of Applied Economics and Management>Working Papers |
| Total Pages: | 23 |
| Collections: | Working Papers
|
Files in This Item:
| File |
Description |
Size | Format |
|---|
| Cornell_Dyson_wp0328.pdf | | 545Kb | PDF | View/Open |
|
Recommend this item
All items in AgEcon Search are protected by copyright.
|
