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Price Changes, Supply Elasticities, Industry Organization, and Dairy Output Distribution

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  • Adesoji O. Adelaja

Abstract

Long-run price elasticities of milk supply are decomposed into price elasticities of yield, herd size, and farm population. For northeastern U.S. dairy farms, these elasticities are shown to vary with farm size because of size-related differences in capital intensity, specialization, yield and herd size variability, and rates of entry/exit into dairy. In the short run, price responsiveness is shown to decrease with farm size. In the long run, large farms are shown to be most price responsive. Results suggest that lower milk prices could make revenue distribution less equal in both the short and long run by altering output and population distributions.

Suggested Citation

  • Adesoji O. Adelaja, 1991. "Price Changes, Supply Elasticities, Industry Organization, and Dairy Output Distribution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(1), pages 89-102.
    • Handle: RePEc:oup:ajagec:v:73:y:1991:i:1:p:89-102.
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    File URL: http://hdl.handle.net/10.2307/1242886
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    Citations

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    Cited by:

    1. Adelaja, Adesoji O. & Miller, Tracy & Taslim, Mohammad, 1998. "Land Values, Market Forces, and Declining Dairy Herd Size: Evidence from an Urban-Influenced Region," Agricultural and Resource Economics Review, Cambridge University Press, vol. 27(1), pages 63-71, April.
    2. Willard C. Losinger, 2006. "Evaluating the uncertainty in estimates of the economic impacts of Bovine‐Leukosis virus in U.S. dairy cows," Agricultural Economics, International Association of Agricultural Economists, vol. 35(3), pages 363-372, November.
    3. Tauer, Loren W., 1998. "Estimates Of Individual Dairy Farm Supply Elasticities," Working Papers 14745, Cornell University, Department of Applied Economics and Management.
    4. Min, Shi & Wang, Xiaobing & Liu, Min & Jikun, Huang, 2018. "The Asymmetric Response of Farmers to the Expected Change of Rubber Price: the Roles of Sunk Cost and Path Dependency," 2018 Annual Meeting, August 5-7, Washington, D.C. 274122, Agricultural and Applied Economics Association.
    5. Jean Joseph Minviel & Timo Sipiläinen, 2021. "A dynamic stochastic frontier approach with persistent and transient inefficiency and unobserved heterogeneity," Agricultural Economics, International Association of Agricultural Economists, vol. 52(4), pages 575-589, July.
    6. Mosnier, Claire & Wieck, Christine, 2010. "Determinants of spatial dynamics of dairy production: a review," Discussion Papers 162896, University of Bonn, Institute for Food and Resource Economics.
    7. Vavra, Pavel & Colman, David, 2003. "The analysis of UK crop allocation at the farm level: implications for supply response analysis," Agricultural Systems, Elsevier, vol. 76(2), pages 697-713, May.
    8. Omezzine, Abdallah & Al-Jabri, Omar S., 1998. "Price supply response of vegetable growers in the Sultanate of Oman," Agricultural Economics, Blackwell, vol. 19(3), pages 349-358, December.
    9. Unknown, 1998. "Commodity Costs and Returns Estimation Handbook (entire book-condensed file)," Commodity Costs and Returns Estimation Handbook,, Iowa State University.
    10. Unknown, 1998. "References/Literature Cited," Commodity Costs and Returns Estimation Handbook,, Iowa State University.
    11. Min, Shi & Wang, Xiaobing & Liu, Min & Huang, Jikun, 2018. "The asymmetric response of farmers to an expected change in the price of rubber: The roles of sunk costs and path dependency," Land Use Policy, Elsevier, vol. 79(C), pages 585-594.
    12. Howard Doran, 1993. "Testing Nonnested Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 95-103.

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