What Does Initial Farm Size Imply About Growth and Diversification?
AbstractRecent consolidation in agriculture has shifted production toward fewer but larger farms, reshaping business relationships between farmers, processors, input suppliers, and local communities. We analyze growth and diversification of U.S. corn, wheat, apple, and beef farms by examining longitudinal changes in 10 size cohorts through three successive censuses. We fail to reject Gibratâ€™s law in apple and wheat industries and the mean reversion hypothesis in beef and corn industries. Apple and wheat farms diversify over time. The findings suggest that scale economies diminish for large farms across all four industries and scope economies dominate scale economies for large apple and wheat farms.
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Bibliographic InfoArticle provided by Southern Agricultural Economics Association in its journal Journal of Agricultural and Applied Economics.
Volume (Year): 41 (2009)
Issue (Month): 01 (April)
diversification; firm growth; Gibratâ€™s law; longitudinal data; scale economies; scope economies; Agribusiness; Farm Management; Production Economics; Q12;
Other versions of this item:
- Almuhanad Melhim & Erik J. O'Donoghue & C. Richard Shumway, 2008. "What does Initial Farm Size Imply About Growth and Diversification?," Working Papers 2008-5, School of Economic Sciences, Washington State University.
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
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