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Small U.S. Dairy Farms: Can They Compete?

Author

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  • Gillespie, Jeffrey M.
  • Nehring, Richard F.
  • Sandretto, Carmen L.
  • Hallahan, Charles B.

Abstract

The U.S. dairy industry is undergoing rapid structural change, evolving from a structure including many small farmers in the Upper Midwest and Northeast to one that includes very large farms in new production regions. Small farms are struggling to retain competitiveness via improved management and low-input systems. Using data from USDA’s Agricultural Resource Management Survey, we determine the extent of U.S. conventional and pasture-based milk production during 2003-2007, and estimate net returns, scale efficiency, and technical efficiency associated with the systems across different operation sizes. We compare the financial performance of small conventional and pasture-based producers with one another and with largescale producers. A stochastic production frontier is used to analyze performance over the period for conventional and pasture technologies identified using a binomial logit model. Large conventional farms generally outperformed smaller farms using most economic measures – technical efficiency, various profitability measures, and returns to scale.

Suggested Citation

  • Gillespie, Jeffrey M. & Nehring, Richard F. & Sandretto, Carmen L. & Hallahan, Charles B., "undated". "Small U.S. Dairy Farms: Can They Compete?," 111th Seminar, June 26-27, 2009, Canterbury, UK 52869, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa111:52869
    DOI: 10.22004/ag.econ.52869
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    1. D’Antoni, Jeremy M. & Mishra, Ashok K. & Blayney, Donald, 2013. "Assessing participation in the Milk Income Loss Contract program and its impact on milk production," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 243-254.
    2. Nehring, Richard & Gillespie, Jeffrey & Harris, J. Michael Harris, "undated". "The Economics and Productivity of Organic versus Non-organic U.S. Dairy Farms," 2018 Annual Meeting, August 5-7, Washington, D.C. 273123, Agricultural and Applied Economics Association.
    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. Díaz-Fernández, M. Carmen & González- Rodríguez, M. Rosario & Simonetti, Biagio, 2020. "Top management team diversity and high performance: An integrative approach based on upper echelons and complexity theory," European Management Journal, Elsevier, vol. 38(1), pages 157-168.
    5. Syed H. Jafri & K. M. Mehedi Adnan & Stefan Baimbill Johnson & Anzalin Ali Talukder & Mark Yu & Edward Osei, 2024. "Challenges and Solutions for Small Dairy Farms in the U.S.: A Review," Agriculture, MDPI, vol. 14(12), pages 1-25, December.
    6. Thyena Karen Magalhães Dias & Edward Martins Costa & Filipe Augusto Xavier Lima & Helson Gomes de Souza, 2021. "Regional Heterogeneity of the Family Farming in Brazil: an Analysis Using a Spatial Stochastic Frontier," Journal of Agricultural Studies, Macrothink Institute, vol. 9(3), pages 179-214, September.
    7. Nehring, Richard F. & Gillespie, Jeffrey M. & Hallahan, Charles B. & Sauer, Johannes, 2012. "Economic Efficiency of U.S. Organic Versus Conventional Dairy Farms: Evidence from 2005 and 2010," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119769, Southern Agricultural Economics Association.
    8. Nehring, Richard F. & Sauer, Johannes & Gillespie, Jeffrey M. & Hallahan, Charles B., "undated". "Intensive versus Extensive Dairy Production Systems: Dairy States in the Eastern and Midwestern U.S. and Key Pasture Countries the E.U.: Determining the Competitive Edge," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98824, Southern Agricultural Economics Association.

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