Estimating feed utilisation matrices using a cost function approach

In this paper a multiple-output cost function framework is proposed to construct national feed balances or feed utilisation matrices (FUMs). The framework is applied to the Belgian compound feed industry. For estimation purposes a Symmetric Generalised McFadden (SGM) cost function is selected. The cost function is estimated using readily available time-series data for the period 1962-88. Unlike previous studies based on duality theory, this study exploits the properties of nonjointness in animal feed production to establish a complete FUM. The allocation of feed ingredients among different livestock categories as well as the composition of various compound feeds are identified. Also own- and cross-price elasticities of demand for feed ingredients by type of livestock are reported.

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Journal Article
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Agricultural Economics: The Journal of the International Association of Agricultural Economists, Volume 09, Issue 2
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 Record created 2017-04-01, last modified 2018-01-22

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