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On the Nature and Magnitude of Cost Economies in Hog Production

Carl Gaigne and Sabine Duvaleix-Tréguer ()

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Abstract: In this paper, we assess the impact of farm size on production cost and evaluate the marginal costs and margins by considering that input prices may change with the scale of production. By using French hog farm data, we estimate a system of equations including a feed price function, input demand functions, and an output supply function based on a technology approximated by a combined generalized Leontief-Quadratic form. Our results suggest that the marginal costs are over-estimated when the adjustment of the feed unit prices to a change in farm size is not controlled for.

Keywords: scale economie; marginal cost; farm size; input price; price-cost margin; livestock production industrie; production Economic (search for similar items in EconPapers)
Date: 2016
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Published in Agricultural Economics, Wiley, 2016, 47 (4), pp.465-476. 〈10.1111/agec.12245〉

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Journal Article: On the nature and magnitude of cost economies in hog production (2016) Downloads
Working Paper: On the Nature and Magnitude of Cost Economies in Hog production (2014) Downloads
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DOI: 10.1111/agec.12245

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