The aim of this paper is to measure the cost and size efficiency with respect to allocated production capacity in danish agriculture. In this study 98 cash crop farms, 248 dairy farms and 185 pig farms have been investigated. A linear programming approach has been adopted in order to calculate the different efficiency scores. One main conclusion is that there exists great opportunities for a better cost allocation of the production capacity in Danish agriculture. However, another main conclusion is that differences in the size of farm capacity is not the most significant explanation for inefficiencies in the capacity costs of the farms investigated.