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Economies Of Scale And Output Flexibility In Northeastern U.S. Dairy

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  • Bruun, Madalene C.
  • Adelaja, Adesoji O.

Abstract

This paper argues that even with strong economies of scale, all farm sizes could have similar adjusted average costs and be equally competitive because the advantages of flexibility on small farms tend to offset those of economies of scale on large farms. Evidence from Northeastern U.S. dairy farms suggests that capital intensity and specialization increase with size, flexibility decreases with size, and small and larr,e farms are equally viable despite slight economies of scale.

Suggested Citation

  • Bruun, Madalene C. & Adelaja, Adesoji O., 1990. "Economies Of Scale And Output Flexibility In Northeastern U.S. Dairy," 1990 Annual meeting, August 5-8, Vancouver, Canada 270871, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea90:270871
    DOI: 10.22004/ag.econ.270871
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    References listed on IDEAS

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    1. Mills, David E & Schumann, Laurence, 1985. "Industry Structure with Fluctuating Demand," American Economic Review, American Economic Association, vol. 75(4), pages 758-767, September.
    2. Kislev, Yoav & Peterson, Willis, 1982. "Prices, Technology, and Farm Size," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 578-595, June.
    3. Jean-Paul Chavas & Richard M. Klemme, 1986. "Aggregate Milk Supply Response and Investment Behavior on U.S. Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 55-66.
    4. Sheshinski, Eytan & Dreze, Jacques H, 1976. "Demand Fluctuations, Capacity Utilization, and Costs," American Economic Review, American Economic Association, vol. 66(5), pages 731-742, December.
    5. Mills, David E, 1984. "Demand Fluctuations and Endogenous Firm Flexibility," Journal of Industrial Economics, Wiley Blackwell, vol. 33(1), pages 55-71, September.
    6. George Stigler, 1939. "Production and Distribution in the Short Run," Journal of Political Economy, University of Chicago Press, vol. 47(3), pages 305-305.
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