Determinants, differentiation, and development of short-term marginal costs in dairy production: an empirical analysis for selected regions of the EU
Abstract
This work provides evidence on the determinants, cost differentiation, and development of short-term marginal costs of dairy farms in important production regions of the European Union. The empirical study is based on the estimation of multi-input multi-output Symmetric Generalized McFadden cost functions using an unbalanced panel data set of the European Farm Accountancy Data Network. The results show considerable regional differences in the impact of the outputs, input prices, and fixed factors on marginal costs. Strong evidence can be found that marginal costs decrease over time and is further underlined by the development of derived regional aggregated short-term supply curves. Marginal cost elasticities and correlation coefficients validate the hypotheses that a high degree of farm specialization, large milk output, and low milk prices are associated with lower marginal costs. Furthermore, the marginal cost spread in the data sample is analyzed. We show that milk output, milk yield, herd size, labor input, and fodder production can be attributed to significant marginal cost differentiation of farms, whereas for crop and animal output, grassland, stock of other animals, and depreciation only minor differentiation can be found. Copyright 2007 International Association of Agricultural Economists.Download Info
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Bibliographic Info
Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.
Volume (Year): 36 (2007)
Issue (Month): 2 (03)
Pages: 203-220
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Britz, Wolfgang & Heckelei, Thomas, 2008. "Recent Developments In Eu Policies – Challenges For Partial Equilibrium Models," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6315, European Association of Agricultural Economists.
- Hansen, Kristiana & Baudry, Alexandre & De Blander, Rembert & Frahan, Bruno Henry de & Polome, Philippe, 2009. "Estimating an Ex Ante Cost Function for Belgian Arable Crop Farms," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49477, Agricultural and Applied Economics Association.
- Casasnovas, Valero L. & Aldanondo, Ana Maria, 2011. "Influence of Animal Feeding on Milk Supply in Navarre," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114316, European Association of Agricultural Economists.
- Baudry, Alexandre & Frahan, Bruno Henry de & Polome, Philippe & Howitt, Richard E., 2008. "Dairy Farms without Quotas: Simulations Based on a Multi-output Multi-input Cost Function," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43965, European Association of Agricultural Economists.
- Kempen, Markus & Witzke, Peter & Pérez Domínguez, Ignacio & Jansson, Torbjörn & Sckokai, Paolo, 2011. "Economic and environmental impacts of milk quota reform in Europe," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 29-52, January.
- Latruffe, Laure & Letort, Elodie, 2011. "Short-term Marginal Costs in French Agriculture," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114385, European Association of Agricultural Economists.
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