Profits, Costs, and the Changing Structure of Dairy Farming
AbstractU.S. dairy production is consolidating into fewer but larger farms. This report uses data from several USDA surveys to detail that consolidation and to analyze the financial drivers of consolidation. Specifically, larger farms realize lower production costs. Although small dairy farms realize higher revenue per hundredweight of milk sold, the cost advantages of larger size allow large farms to be profitable, on average, even while most small farms are unable to earn enough to replace their capital. Further survey evidence, as well as the financial data, suggest that consolidation is likely to continue.
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Bibliographic InfoPaper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 6704.
Date of creation: 2007
Date of revision:
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Dairy farming; economies of scale; economies of size; dairy farm structure; milk costs; Farm Management; Industrial Organization; Livestock Production/Industries;
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