Technical efficiency,herd size,and exit intentions in U.S. dairy farms

The U.S. dairy industry has seen major restructuring in recent decades. A sharp decline in the number of U.S. dairy farms and an increase in average herd sizes have accompanied exits, which have been concentrated among smaller herds. Given that more productive farms are better positioned to increase operation size and to continue operation, we hypothesize that the more technically efficient farms are better able to expand and also have stronger incentives to continue production. Using data from the USDA's 2010 ARMS Phase III, Dairy Production Practices and Costs and Returns Report, we estimate technical efficiency using stochastic production frontier analysis with endogenous inputs. The efficiency estimate is then incorporated into the analysis of exit intention and herd size. The results confirm our hypotheses that smaller and less efficient farms are more likely to exit and that more efficient dairy farms tend to expand herd size. Moreover, farms without successors but with older and more educated operators are more likely to exit.     

Spatial and Temporal Changes in the U.S. Hog, Dairy, and Fed-Cattle Sectors, 1975–2000

The hog, dairy, and fed-cattle sectors have become more geographically concentrated within states across the country. Hog and dairy inventories increased in nontraditional production regions but fed-cattle inventories increased only in the three major producing states. Regions in the northeastern quadrant of the United States tended to experience an attrition pattern of geographical concentration in livestock production. In contrast, an augmentation pattern is evident in the western regions where absolute inventory numbers increased along with geographical concentration. The patterns are most closely associated with changes in regional processing capacity.     

Contracting in the U.S. Pork and Beef Industries: Extent, Motives, and Issues

Contracting has increased significantly in the US livestock-meat sector. Over half of finished hogs and about a third of fed cattle are marketed under some form of contract. Contracting motives vary by type of contract, whether buyer or seller, and by commodity. Several motives for buyers and sellers of finished hogs and fed cattle are identified and discussed. Issues related to contracting per se and the trend toward increased contracting have been raised by contracting opponents, politicians, and economists. Several of these issues are discussed under six headings. Lastly, agricultural economists are encouraged to become actively involved in addressing these issues, especially providing pragmatic education and assistance to those involved in contracting.     

Farmer Participation,Processing, and the Rise of Dairy Production in Greater Beijing,P. R. China

With rapid income growth, dairy production and consumption in China have increased significantly. The emergence of the dairy sector provides opportunities for farmers to participate in a high-value, potentially more lucrative enterprise. The overall goal of this paper is to analyze the major determinants of farmer participation in dairy production. Our main questions include whether or not the pace of the emergence of the dairy processing industry has affected the ability of farmers (especially small and relatively poor ones) to participate in dairy production; and whether or not it has limited the expansion of their herd size. Based on household, village, and processor surveys conducted in the Greater Beijing region, our analysis indicates that the location of dairy processing firms is one key factor that determines the participation of farmers in dairy production. Although other factors affect participation and herd size, including road access and the ability to find employment off the farm (which affects the opportunity cost of household members), the proximity to a dairy processor is shown to be one of the major factors that has encouraged the growth of dairy production for a given farmer in a specific region during the past decade. The results also show that poor, less educated farmers with relatively less access to land are not excluded from the expansion of the Greater Beijing dairy market. La production laitière et la consommation ont augmenté considérablement en Chine, en raison de la croissance rapide du revenu. Pour les producteurs, la croissance du secteur laitier offre des occasions de se lancer dans des activités à forte valeur, potentiellement plus lucratives. L’objectif global du présent article consiste à analyser les principaux déterminants de la participation des producteurs à la production laitière. Nous nous sommes alors posé deux questions. Le rythme d’émergence de l’industrie de la transformation de produits laitiers influence-t-il ou non la capacité des producteurs (en particulier les petits producteurs de condition modeste) à se lancer dans la production laitière? Le rythme d’émergence de cette industrie limite-t-il ou non l’expansion de la taille de leurs troupeaux? Une analyse des enquêtes menées auprès des ménages, des villages et des transformateurs dans l’agglomération pékinoise a révélé que le lieu où se trouvent les entreprises de transformation de produits laitiers est l’un des principaux facteurs qui déterminent la participation des producteurs à la production laitière. Bien que d’autres facteurs influencent la participation des producteurs et la taille des troupeaux, notamment l’accès routier et la capacitéà trouver un emploi à l’extérieur de la ferme (qui influence le coût d’opportunité/d’option des membres du ménage), la proximité d’une usine de transformation serait l’un des principaux facteurs qui ont encouragé la croissance de la production laitière, pour un producteur donné dans une région en particulier, au cours des dix dernières années. Les résultats ont également indiqué que les producteurs de condition modeste, moins instruits et ayant un accès restreint à des terres ne sont pas exclus de l’expansion du marché laitier dans l’agglomération pékinoise.     

Induced Innovation in U.S. Agriculture: Time-series, Direct Econometric, and Nonparametric Tests

The hypothesis of induced innovation is tested for U.S. agriculture using a high-quality state-level panel data set and three disparate testing techniques—time series, direct econometric, and nonparametric. We find little support for the hypothesis. That conclusion is robust across testing techniques. However, as with all empirical tests of this hypothesis conducted to date, ours focus only on the demand side of the hypothesis. The hypothesis could have been rejected simply because the marginal cost of developing and implementing input-saving technologies for the relatively expensive inputs is greater than for the relatively cheap inputs.