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Why Are Farms Getting Larger? The Case Of The U.S

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  • MacDonald, James M.
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    Abstract

    Agricultural production continues to shift to larger farms in the U.S. I show that the shift is persistent over time, large, and ubiquitous across commodities. I review theories of farm size, and classify three channels for analysis: 1) scale effects, through technological economies and managerial diseconomies; 2) the roles of relative factor prices and factor shares; and 3) policy and institutions. Finally, I evaluate the empirical evidence on the forces driving structural change, distinguishing between crops and livestock because of important differences in the role of scale economies and coordination, and I offer some directions for the future.

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    Bibliographic Info

    Paper provided by German Association of Agricultural Economists (GEWISOLA) in its series 51st Annual Conference, Halle, Germany, September 28-30, 2011 with number 115361.

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    Date of creation: 2011
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    Handle: RePEc:ags:gewi11:115361

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    Keywords: Agribusiness;

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    8. Milton Madison, 2005. "Technological Change and Economies of Scale in U.S. Poultry Processing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 116-129.
    9. MacDonald, James M. & O'Donoghue, Erik J. & McBride, William D. & Nehring, Richard F. & Sandretto, Carmen L. & Mosheim, Roberto, 2007. "Profits, Costs, and the Changing Structure of Dairy Farming," Economic Research Report 6704, United States Department of Agriculture, Economic Research Service.
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    21. Douglas W. Allen & Dean Lueck, 2004. "The Nature of the Farm: Contracts, Risk, and Organization in Agriculture," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511851, December.
    22. Hoppe, Robert A. & Korb, Penelope J. & Banker, David E., 2008. "Million-Dollar Farms in the New Century," Economic Information Bulletin 58623, United States Department of Agriculture, Economic Research Service.
    23. MacDonald, James M. & McBride, William D., 2009. "The Transformation of U.S. Livestock Agriculture: Scale, Efficiency, and Risks," Economic Information Bulletin 58311, United States Department of Agriculture, Economic Research Service.
    24. Peterson, Willis & Kislev, Yoav, 1986. "The Cotton Harvester in Retrospect: Labor Displacement or Replacement?," The Journal of Economic History, Cambridge University Press, vol. 46(01), pages 199-216, March.
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