IDEAS home Printed from https://ideas.repec.org/p/ags/ifma17/345793.html

Estimating the most efficient farm size for crop producers

Author

Listed:
  • Ibendahl, Gregory

Abstract

Economic theory suggests that farms will experience increasing economies of size up to some number of hectares. After that, there is likely a range of hectares where economies of size are constant before starting to increase. Finding that range where economies of size are constant will be where firms earn the most profit per hectare and are most likely to survive in the long run. This paper examined the net returns per hectare for over 200 farms in central Kansas. Regression analysis was used to predict the adjusted net farm income per hectare based on either the number of hectares or the log of hectares. The expectation was that there were enough farms examined to show both the increasing and decreasing economies of size. However, the resulting R squared was very low because of a large variability in net returns per hectare for the smaller farms. A linear regression line fit the data just as well as a nonlinear model. This could indicate that most farms in the examination were already at an efficient size.

Suggested Citation

  • Ibendahl, Gregory, 2017. "Estimating the most efficient farm size for crop producers," 21st Congress, Edinburgh, Scotland, July 2-7, 2017 345793, International Farm Management Association.
    • Handle: RePEc:ags:ifma17:345793
    DOI: 10.22004/ag.econ.345793
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/345793/files/17_PR_Ibendahl_w3_p7.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.345793?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Yu Sheng & Shiji Zhao & Katarina Nossal & Dandan Zhang, 2015. "Productivity and farm size in Australian agriculture: reinvestigating the returns to scale," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(1), pages 16-38, January.
    2. Langemeier, Michael R. & DeLano, Fredrick D., 1999. "Characteristics Of Highly Efficient Farms," 1999 Annual Meeting, July 11-14, 1999, Fargo, ND 35671, Western Agricultural Economics Association.
    3. Duffy, Michael, 2009. "Economies of Size in Production Agriculture," Staff General Research Papers Archive 31282, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zheng, Yanan & Goddard, Ellen W. & Qiu, Feng, "undated". "Exploring the Effect of Disease Outbreaks on Farm Structure Change: A Dynamic Analysis for Canadian Pig Industry," 2018 Annual Meeting, August 5-7, Washington, D.C. 273801, Agricultural and Applied Economics Association.
    2. Barnes, Andrew P. & Thomson, Steven G. & Ferreira, Joana, 2020. "Disadvantage and economic viability: characterising vulnerabilities and resilience in upland farming systems," Land Use Policy, Elsevier, vol. 96(C).
    3. Shami, Labib & Lazebnik, Teddy, 2022. "Economic aspects of the detection of new strains in a multi-strain epidemiological–mathematical model," Chaos, Solitons & Fractals, Elsevier, vol. 165(P2).
    4. Anaka Aiyar & Prabhu Pingali, 2020. "Pandemics and food systems - towards a proactive food safety approach to disease prevention & management," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(4), pages 749-756, August.
    5. Barbón, A. & Fortuny Ayuso, P. & Bayón, L. & Silva, C.A., 2023. "Experimental and numerical investigation of the influence of terrain slope on the performance of single-axis trackers," Applied Energy, Elsevier, vol. 348(C).
    6. Takeshima, Hiroyuki & Hatzenbuehler, Patrick L. & Edeh, Hyacinth O., 2020. "Effects of agricultural mechanization on economies of scope in crop production in Nigeria," Agricultural Systems, Elsevier, vol. 177(C).
    7. Elizabeth Ahikiriza & Joshua Wesana & Xavier Gellynck & Guido Van Huylenbroeck & Ludwig Lauwers, 2021. "Context Specificity and Time Dependency in Classifying Sub-Saharan Africa Dairy Cattle Farmers for Targeted Extension Farm Advice: The Case of Uganda," Agriculture, MDPI, vol. 11(9), pages 1-19, August.
    8. Martinsson , Elin & Storm, Hugo, . "Conceptualization of How Adopting Novel Technology Induces Structural and Behavioural Changes on Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 50(3).
    9. Filip Hampl, 2020. "A statistical analysis of the financial performance of organic and conventional farms in the Czech Republic with respect to their size," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(1), pages 1-9.
    10. Tatiana Montenegro-Romero & Cristián Vergara-Fernández & Fabian Argandoña-Castro & Fernando Peña-Cortés, 2022. "Agriculture and Temperate Fruit Crop Dynamics in South-Central Chile: Challenges for Fruit Crop Production in La Araucanía Region, Chile," Land, MDPI, vol. 11(6), pages 1-12, May.
    11. Micheels, Eric T. & Nolan, James F., 2016. "Examining the effects of absorptive capacity and social capital on the adoption of agricultural innovations: A Canadian Prairie case study," Agricultural Systems, Elsevier, vol. 145(C), pages 127-138.
    12. McFarlane, Jim A. & Blackwell, Boyd D. & Mounter, Stuart W. & Grant, Bligh J., 2016. "From agriculture to mining: The changing economic base of a rural economy and implications for development," Economic Analysis and Policy, Elsevier, vol. 49(C), pages 56-65.
    13. Georgieva, Vanya, 2024. "Increasing or Decreasing Scale? The Pros and Cons of Farm Size for Financial Sustainability," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 16(2), June.
    14. Hiroyuki Takeshima & Zin Wai Aung & Ian Masias & Bart Minten, 2024. "Endogenous technologies and productivity in rice production: Roles of social instability in Myanmar since 2021," Agricultural Economics, International Association of Agricultural Economists, vol. 55(6), pages 925-942, November.
    15. Eigner, Amanda E. & Nuppenau, Ernst-August, 2019. "Applied spatial approach of modelling field size changes based on a consideration of farm and landscape interrelations," Agricultural Systems, Elsevier, vol. 176(C).
    16. Kiyotaka Masuda, 2018. "Energy Efficiency of Intensive Rice Production in Japan: An Application of Data Envelopment Analysis," Sustainability, MDPI, vol. 10(1), pages 1-11, January.
    17. Bjerke, Lina, 2016. "Knowledge in agriculture: a micro data assessment of the role of internal and external knowledge in farm productivity in Sweden," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 118(2), pages 1-9, August.
    18. Xingguang Li & Xuexi Huo, 2022. "Agricultural labor markets and the inverse plot size–productivity relationship: Evidence from China's apple growers," Review of Development Economics, Wiley Blackwell, vol. 26(4), pages 2163-2183, November.
    19. Fertő, Imre & Csonka, Arnold, 2017. "Válság- és agglomerációs hatások a magyarországi sertéstartásban [Crisis and agglomeration in Hungary s pig production]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 105-122.
    20. George Martin & Roland Clift & Ian Christie, 2016. "Urban Cultivation and Its Contributions to Sustainability: Nibbles of Food but Oodles of Social Capital," Sustainability, MDPI, vol. 8(5), pages 1-18, April.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ifma17:345793. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifmaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.