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Milk Assembly Costs in the Greater Ohio Area: A Multiproduct Analysis

Author

Listed:
  • Edward W. Gallagher
  • Cameron S. Thraen
  • Gary D. Schnitkey

Abstract

The economics of raw milk assembly is examined. The hauling technology is described as a multiple output process with road miles and volume by weight hauled as the outputs produced by the hauling firms. A translogarithmic total cost function is estimated using survey data from the greater Ohio milk production region. The relative share of total cost is substantially lower for the volume hauled output relative to the distance driven outputs. Current hauling rate schedules strictly based on volume, or on volume per mile driven, substantially overcharge large volume dairy producers and under-charge small volume producers.

Suggested Citation

  • Edward W. Gallagher & Cameron S. Thraen & Gary D. Schnitkey, 1993. "Milk Assembly Costs in the Greater Ohio Area: A Multiproduct Analysis," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(1), pages 75-88.
    • Handle: RePEc:oup:revage:v:15:y:1993:i:1:p:75-88.
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    File URL: http://hdl.handle.net/10.2307/1349713
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    Cited by:

    1. Ollinger, Michael & Ralston, Katherine L. & Guthrie, Joanne F., 2011. "School Breakfast and Lunch Costs: Are There Economies of Scale?," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103191, Agricultural and Applied Economics Association.
    2. Gervais Jean-Philippe & Rude James I, 2003. "Some Unintended Consequences of TRQ Liberalization," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-18, May.
    3. Mafoua, Edouard & Hossain, Ferdaus, 2001. "Scope And Scale Economies For Multi-Product Farms: Firm-Level Panel Data Analysis," 2001 Annual meeting, August 5-8, Chicago, IL 20627, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Shumway, C. Richard, 1995. "Recent Duality Contributions In Production Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-17, July.
    5. Mafoua, Edouard, 2002. "Economies Of Scope And Scale Of Multi-Product U.S. Cash Grain Farms: A Flexible Fixed-Cost Quadratic (Ffcq) Model Analysis," 2002 Annual meeting, July 28-31, Long Beach, CA 19734, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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