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Small U.S. dairy farms: can they compete

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 large-scale 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.
Author(s):
Nehring, Richard , Gillespie, Jeffrey , Sandretto, Carmen , Hallahan, Charlie
Subject(s):
dairy farming , small farms , dairy farm management , pastures , dairy cows , costs and returns , economic analysis , economic outlook and situation , economic trends , econometric models , United States
Description:
Includes references
Source:
Agricultural economics the journal of the International Association of Agricultural Economists 2009 Nov., v. 40, no. s1
Language:
English
Year:
2009
Publisher:
Blackwell Publishing Inc
Collection:
Journal Articles, USDA Authors, Peer-Reviewed
File:
Download [PDF]   
Rights:
Works produced by employees of the U.S. Government as part of their official duties are not copyrighted within the U.S. The content of this document is not copyrighted.