Economic Efficiency, Structure and Scale Economies in the U.S. Dairy Sector

Roberto Mosheim and C.A. Knox Lovell

No 21440, 2006 Annual meeting, July 23-26, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This study uses a new dataset based on the 2000 Agricultural Resource Management Survey, the most recent national survey of dairy producers in the United States. A shadow cost function is employed to decompose and analyze economic efficiency and scale economies. The study details the development of the data employed in the analysis and focuses on the estimation of scale relationships across farms in different regions and of different sizes. Preliminary results point to important scale economies and suggest that surviving small farms are on average more economically efficient but can exploit scale economies to a much lesser degree than larger farms. The preferred specification of the cost function does not show a region of decreasing returns to scale.

Keywords: Industrial Organization (search for similar items in EconPapers)
Date: 2006
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