When to Get In and Out of Dairy Farming: A Real Option Analysis

Loren W. Tauer

No 21251, 2006 Annual meeting, July 23-26, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The Dixit entry/exit real option model was applied to the entry/exit decisions of New York dairy farmers. For the cost structure of a 500-cow farm the entry milk price is $17.52 per hundredweight (cwt.) and the exit milk price is $10.84. For the 50-cow farm cost structure the entry price is higher at $23.71 per cwt., and the exit price is also higher at $13.48. If infinite numbers of representative farms enter and exit at these prices, the price of milk should range between $13.48 and $17.52 per cwt.

Keywords: Farm; Management (search for similar items in EconPapers)
Pages: 24
Date: 2006
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Citations: View citations in EconPapers (25)

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Related works:
Journal Article: When to Get In and Out of Dairy Farming: A Real Option Analysis (2006)
Journal Article: When to Get In and Out of Dairy Farming: A Real Option Analysis (2006)
Working Paper: When to Get In and Out of Dairy Farming: A Real Option Analysis (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea06:21251

DOI: 10.22004/ag.econ.21251

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