Almuhanad Melhim Erik J. O'Donoghue C. Richard Shumway () (School of Economic Sciences, Washington State University)
Abstract
Recent 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 ten size cohorts through three successive censuses. We fail to reject Gibrat’s law in apple and wheat industries and the mean reversion hypothesis in beef and corn industries. Apple and wheat farms diversify over time. 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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Publisher Info
Paper provided by School of Economic Sciences, Washington State University in its series Working Papers with number
2008-5.