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Profits, costs, and the changing structure of dairy farming


Author:
MacDonald, James M. and United States Department of Agriculture. Economic Research Service.
Source:
Economic research report (United States. Department of Agriculture. Economic Research Service) ; no. 47 2007
Year:
2007
Subject:
Dairy farming -- United States, Farms, Size of -- Economic aspects -- United States, Milk trade -- United States -- Costs, dairy farming, milk industry, and United States
Abstract:
U.S. dairy production is consolidating into fewer but larger farms. This report uses data from several USDA surveys to detail that consolidation and to analyze the financial drivers of consolidation. Specifically, larger farms realize lower production costs. Although small dairy farms realize higher revenue per hundredweight of milk sold, the cost advantages of larger size allow large farms to be profitable, on average, even while most small farms are unable to earn enough to replace their capital. Further survey evidence, as well as the financial data, suggest that consolidation is likely to continue.
Language:
English
Publisher:
U.S. Dept. of Agriculture, Economic Research Service
Collection:
USDA publications