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Optimum Dairy Plant Location with Economies of Size and Market-Share Restrictions

Author

Listed:
  • Donald W. Kloth
  • Leo V. Blakley

Abstract

Significant economies are possible under optimum organizations of the U. S. dairy industry, but models that minimize industry costs with a single firm in each market overestimate the potential savings. The effects of market-share restrictions for processing firms are estimated. Costs are higher than under single-firm organizations but remain below levels for the current plant-size environment. The major interregional effect of the restrictions is on the regional identity of the firms processing milk for local markets, not on the total quantity of milk transported between regions. With market-share restrictions, more milk is processed locally.

Suggested Citation

  • Donald W. Kloth & Leo V. Blakley, 1971. "Optimum Dairy Plant Location with Economies of Size and Market-Share Restrictions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(3), pages 461-466.
  • Handle: RePEc:oup:ajagec:v:53:y:1971:i:3:p:461-466.
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    File URL: http://hdl.handle.net/10.2307/1238223
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    Citations

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    Cited by:

    1. Mendez, David F. & Hughes, David W. & Yu, T. Edward & Griffith, Andrew P., 2017. "Determining the Location of a Tennessee Milk Condensing Plant," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252841, Southern Agricultural Economics Association.
    2. Koo, Won W. & Cho, Kyu D., 1991. "Alternative Agricultural Policies in Korea," Agricultural Economics Reports 23294, North Dakota State University, Department of Agribusiness and Applied Economics.
    3. Pratt, James & Keniston, Maura & Novakovic, Andrew, 1989. "Geographic Price Relationships in the U.S. Fluid Milk Industry: A Mathematical Programming Analysis," Staff Papers 197573, Cornell University, Department of Applied Economics and Management.
    4. Martin, Larry & Hedley, H.A., 1975. "An Analysis of Structural Change in the Ontario Feed Milling Sector," Working Papers 245020, University of Guelph, Department of Food, Agricultural and Resource Economics.
    5. Pratt, James & Keniston, Maura & Novakovic, Andrew, 1989. "Geographic Price Relationships In The U.S. Fluid Milk Industry: A Mathematical Programming Analysis," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270486, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Pratt, James E. & Bishop, Phillip M. & Erba, Eric M. & Novakovic, Andrew M. & Stephenson, Mark W., 1997. "A Description of the Methods and Data Employed in the U.S. Dairy Sector Simulator, Version 97.3," Research Bulletins 122723, Cornell University, Department of Applied Economics and Management.
    7. Buccola, Steven T. & Conner, M. C., 1979. "Least-Cost Milk Assembly And Manufacturing Plant Locations For The Northeastern Dairy Industry," Journal of the Northeastern Agricultural Economics Council, Northeastern Agricultural and Resource Economics Association, vol. 8(1), pages 1-7, April.
    8. M T Lucas & D Chhajed, 2004. "Applications of location analysis in agriculture: a survey," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(6), pages 561-578, June.
    9. Conner, M.C., 1973. "Increasing Productivity In The Fluid Milk Processing Sector Through Changes In Market Organization And Structure," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 5(2), pages 1-6, December.
    10. Keniston, Maura & Pratt, James E. & Stephenson, Mark W. & Novakovic, Andrew M., 1992. "Disaster Planning in the Dairy Industry: Conceptual Issues and a Spatial Modelling Approach," Staff Papers 121540, Cornell University, Department of Applied Economics and Management.
    11. Miller, Bill R. & Ersoz, A. & North, Ronald M., 1977. "On The Facilitative Role Of The Economist In Economic Development - Case Study Of A Georgia Shrimp Harbor Investment," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 9(2), pages 1-6, December.

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