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On the Nature and Magnitude of Cost Economies in Hog Production

Author

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  • Carl Gaigné

    (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)

  • Sabine Duvaleix-Treguer

    (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)

Abstract

In this paper, we assess the impact of farm size on production cost and evaluate the marginal costs and margins by considering that input prices may change with the scale of production. By using French hog farm data, we estimate a system of equations including a feed price function, input demand functions, and an output supply function based on a technology approximated by a combined generalized Leontief-Quadratic form. Our results suggest that the marginal costs are over-estimated when the adjustment of the feed unit prices to a change in farm size is not controlled for.

Suggested Citation

  • Carl Gaigné & Sabine Duvaleix-Treguer, 2016. "On the Nature and Magnitude of Cost Economies in Hog Production," Post-Print hal-01238428, HAL.
    • Handle: RePEc:hal:journl:hal-01238428
    DOI: 10.1111/agec.12245
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    Cited by:

    1. Sabine Duvaleix-Treguer & Carl Gaigné, 2015. "Producer organizations and members performance in hog production," Post-Print hal-02794642, HAL.
    2. Tsakiridis, Andreas & Hanrahan, Kevin & Breen, James & Wallace, Michael & O’Donoghuea, Cathal, 2016. "Feed substitution and economies of scale in Irish beef production systems," 149th Seminar, October 27-28, 2016, Rennes, France 244769, European Association of Agricultural Economists.
    3. Sabine Duvaleix-Treguer, 2018. "Producer organisations in the meat sector," Post-Print hal-01923028, HAL.
    4. Hennessy, David A. & Zhang, Jing & Bai, Na, 2019. "Animal health inputs, endogenous risk, general infrastructure, technology adoption and industrialized animal agriculture," Food Policy, Elsevier, vol. 83(C), pages 355-362.

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    More about this item

    Keywords

    scale economie; marginal cost; farm size; input price; price-cost margin; livestock production industrie; production Economic;
    All these keywords.

    JEL classification:

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

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