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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.

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