What Does Initial Farm Size Imply About Growth and Diversification?

Recent consolidation in agriculture has shifted production toward fewer but larger farms, reshaping business relationships between farmers, processors, input suppliers, and local communities. We analyze growth and diversification of U.S. corn, wheat, apple, and beef farms by examining longitudinal changes in 10 size cohorts through three successive censuses. We fail to reject Gibrat’s law in apple and wheat industries and the mean reversion hypothesis in beef and corn industries. Apple and wheat farms diversify over time. The findings suggest that scale economies diminish for large farms across all four industries and scope economies dominate scale economies for large apple and wheat farms.


Issue Date:
2009-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/48757
Published in:
Journal of Agricultural and Applied Economics, Volume 41, Number 1
Page range:
193-206
Total Pages:
14
JEL Codes:
Q12




 Record created 2017-04-01, last modified 2017-08-25

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