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Abstract
In this paper we estimate the parameters of a translog cost
function for the broiler production activity in Brazil, to infer about scale
economies in the activity. Cross-section data is used, from a survey of
229 producers in the main producing regions. Other characteristics of
the producers surveyed are also discussed. Our estimates of scale economies
show an optimal scale of production around 110 thousand kilos of
live hens, corresponding to a 3,500 m2 plant area. The paper points to
the conclusion that the optimal size of exploitation is smaller than that
suggested by some processing industries. Larger scale farms would be
operating with diseconomies of scale, what could generate pressures for
price increases in the future. The evidence suggests also that some smallscale
producers characteristics could help minimize the importance of
operating under optimal scale.