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Economic Efficiency, Structure and Scale Economies in the U.S. Dairy Sector

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  • Mosheim, Roberto
  • Lovell, C.A. Knox

Abstract

This study uses a new dataset based on the 2000 Agricultural Resource Management Survey, the most recent national survey of dairy producers in the United States. A shadow cost function is employed to decompose and analyze economic efficiency and scale economies. The study details the development of the data employed in the analysis and focuses on the estimation of scale relationships across farms in different regions and of different sizes. Preliminary results point to important scale economies and suggest that surviving small farms are on average more economically efficient but can exploit scale economies to a much lesser degree than larger farms. The preferred specification of the cost function does not show a region of decreasing returns to scale.

Suggested Citation

  • Mosheim, Roberto & Lovell, C.A. Knox, 2006. "Economic Efficiency, Structure and Scale Economies in the U.S. Dairy Sector," 2006 Annual meeting, July 23-26, Long Beach, CA 21440, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea06:21440
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    File URL: http://purl.umn.edu/21440
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    References listed on IDEAS

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    3. Alvarez, Antonio & Arias, Carlos, 2004. "Technical efficiency and farm size: a conditional analysis," Agricultural Economics, Blackwell, vol. 30(3), pages 241-250, May.
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    6. Tim Coelli & Antonio Estache & Sergio Perelman & Lourdes Trujillo, 2003. "A Primer on Efficiency Measurement for Utilities and Transport Regulators," World Bank Publications, The World Bank, number 15149, March.
    7. Atkinson, Scott E & Halvorsen, Robert, 1980. "A Test of Relative and Absolute Price Efficiency in Regulated Utilities," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 81-88, February.
    8. Arunava Bhattacharyya & Elliott Parker & Kambiz Raffiee, 1994. "An Examination of the Effect of Ownership on the Relative Efficiency of Public and Private Water Utilities," Land Economics, University of Wisconsin Press, vol. 70(2), pages 197-209.
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    11. Antonio Alvarez & Carlos Arias, 2003. "Diseconomies of Size with Fixed Managerial Ability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 134-142.
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    Cited by:

    1. Almuhanad Melhim & Erik J. O'Donoghue & C. Richard Shumway, 2009. "Do the Largest Firms Grow and Diversify the Fastest? The Case of U.S. Dairies," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(2), pages 284-302, June.
    2. repec:oup:revage:v:31:y:2009:i:2:p:284-302. is not listed on IDEAS
    3. Snider, Lindsey & Langemeier, Michael R., 2009. "A Long-Term Analysis of Changes in Farm Size and Financial Performance," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 45915, Southern Agricultural Economics Association.
    4. Mayen, Carlos D. & Balagtas, Joseph Valdes & Alexander, Corinne E., 2009. "Vertical Economies of Scope for Organic and Conventional Dairy Farms in the United States," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49409, Agricultural and Applied Economics Association.
    5. Hisham S. El-Osta, 2016. "Farmland Ownership and Its Impact on the Debt Servicing Capacity Among U.S. Married-Couple Farm Households," Applied Economics and Finance, Redfame publishing, vol. 3(4), pages 190-206, November.

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    Keywords

    Industrial Organization;

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