Profits, Costs, and the Changing Structure of Dairy Farming
Richard F. Nehring,
Carmen L. Sandretto and
No 6704, Economic Research Report from United States Department of Agriculture, Economic Research Service
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.
Keywords: Farm Management; Industrial Organization; Livestock Production/Industries (search for similar items in EconPapers)
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