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Decomposition of Total Factor Productivity Change in the U.S. Hog Industry

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  • Key, Nigel D.
  • McBride, William D.
  • Mosheim, Roberto

Abstract

The U.S. hog industry has experienced dramatic structural changes and rapid increases in farm productivity. A stochastic frontier analysis is used to measure hog enterprise total factor productivity (TFP) growth between 1992 and 2004 and to decompose this growth into technical change and changes in technical efficiency, scale efficiency, and allocative efficiency. Productivity gains over the 12-year period are found to be explained almost entirely by technical progress and by improvements in scale efficiency. Differences in TFP growth rates in the Southeast and Heartland regions were found to be explained primarily by differences in farm size growth rates.

Suggested Citation

  • Key, Nigel D. & McBride, William D. & Mosheim, Roberto, 2008. "Decomposition of Total Factor Productivity Change in the U.S. Hog Industry," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(01), April.
  • Handle: RePEc:ags:joaaec:45512
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    References listed on IDEAS

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    6. Key, Nigel D. & McBride, William D., 2007. "The Changing Economics of U.S. Hog Production," Economic Research Report 6389, United States Department of Agriculture, Economic Research Service.
    7. Brian Roe & Elena G. Irwin & Jeff S. Sharp, 2002. "Pigs in Space: Modeling the Spatial Structure of Hog Production in Traditional and Nontraditional Production Regions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 259-278.
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    9. Ribaudo, Marc & Kaplan, Jonathan D. & Christensen, Lee A. & Gollehon, Noel R. & Johansson, Robert C. & Breneman, Vincent E. & Aillery, Marcel P. & Agapoff, Jean & Peters, Mark, 2003. "Manure Management For Water Quality Costs To Animal Feeding Operations Of Applying Manure Nutrients To Land," Agricultural Economics Reports 33911, United States Department of Agriculture, Economic Research Service.
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    Citations

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    Cited by:

    1. Kellermann, Magnus A., 2015. "Total Factor Productivity Decomposition and Unobserved Heterogeneity in Stochastic Frontier Models," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(1), April.
    2. MacDonald, James M., 2011. "Why Are Farms Getting Larger? The Case Of The U.S," 51st Annual Conference, Halle, Germany, September 28-30, 2011 115361, German Association of Agricultural Economists (GEWISOLA).
    3. Sabine Duvaleix-Tréguer & Carl Gaigné, 2016. "On the nature and magnitude of cost economies in hog production," Agricultural Economics, International Association of Agricultural Economists, vol. 47(4), pages 465-476, July.
    4. Key, Nigel, 2013. "Production Contracts and Farm Business Growth and Survival," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 45(02), pages 277-293, May.
    5. Lukáš Čechura & Heinrich Hockmann, 2010. "Sources of Economical Growth in the Czech Food Processing," Prague Economic Papers, University of Economics, Prague, vol. 2010(2), pages 169-182.
    6. David Hadley & Euan Fleming & Renato Villano, 2013. "Is Input Mix Inefficiency Neglected in Agriculture? A Case Study of Pig-based Farming Systems in England and Wales," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(2), pages 505-515, June.
    7. Schulz, Lee L. & Hadrich, Joleen C., 2014. "Feeding Practices and Input Cost Performance in U.S. Hog Operations: The Case of Split-Sex and Phase Feeding," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169983, Agricultural and Applied Economics Association.
    8. Subal Kumbhakar & Kai Sun, 2012. "Estimation of TFP growth: a semiparametric smooth coefficient approach," Empirical Economics, Springer, vol. 43(1), pages 1-24, August.
    9. Key, Nigel D. & McBride, William D., 2008. "Do Production Contracts Raise Farm Productivity? An Instrumental Variables Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), October.
    10. Yeager, Elizabeth A. & Langemeier, Michael R., 2011. "Productivity Divergence across Kansas Farms," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(2), August.
    11. Duvaleix-Treguer, Sabine & Gaigne, Carl, 2012. "Cost Economies in Hog Production: Feed prices matter," Working Papers 125261, Structure and Performance of Agriculture and Agri-products Industry (SPAA).

    More about this item

    Keywords

    hog production; scale efficiency; stochastic frontier; technical change; total factor productivity growth; Livestock Production/Industries; Production Economics; D24; Q12;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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