Small U.S. Dairy Farms: Can They Compete?

Jeffrey Gillespie, Richard F. Nehring, Carmen L. Sandretto and Charles B. Hallahan

No 52869, 111th Seminar, June 26-27, 2009, Canterbury, UK from European Association of Agricultural Economists

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 largescale 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.

Keywords: Livestock Production/Industries; Productivity Analysis (search for similar items in EconPapers)
Pages: 16
Date: 2009-08-20
New Economics Papers: this item is included in nep-agr and nep-eff
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Citations: View citations in EconPapers (8)

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Journal Article: Small U.S. dairy farms: can they compete? (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa111:52869

DOI: 10.22004/ag.econ.52869

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