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A Markov chain analysis of the size of hog production firms in the United States

Author

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  • Jeffrey M. Gillespie

    (Department of Agricultural Economics and Agribusiness, 101 Agricultural Administration Building, Louisiana State University, Baton Rouge, LA 70803. E-mail is jmgille@lsu.edu)

  • Joan R. Fulton

    (Department of Agricultural Economics, 1145 Krannert Building, Purdue University, West Lafayette, IN 47907-1145. E-mail: fulton@agecon.purdue.edu)

Abstract

The U.S. hog industry expanded rapidly during the 1980s and 1990s. Along with this expansion, hog farms have become larger, partly due to economies of size and new business arrangements. Using markov chain analysis, this study analyzes the movement of hog farms among three different size categories. Results indicate that the hog-corn price ratio has continued to affect the entry and exit of small hog farms, and has influenced the movement of hog farms among size categories. Interest rates, processing capacity, and agglomeration economies have impacted new entry of hog farms in the Unites States [L110, L230]. © 2001 John Wiley & Sons, Inc.

Suggested Citation

  • Jeffrey M. Gillespie & Joan R. Fulton, 2001. "A Markov chain analysis of the size of hog production firms in the United States," Agribusiness, John Wiley & Sons, Ltd., vol. 17(4), pages 557-570.
    • Handle: RePEc:wly:agribz:v:17:y:2001:i:4:p:557-570
    DOI: 10.1002/agr.1035
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    References listed on IDEAS

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    2. Nene, Gibson & Azzam, Azzeddine M. & Schoengold, Karina, 2009. "Environmental Regulations and the Structure of U.S. Hog Farms," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49395, Agricultural and Applied Economics Association.
    3. Piet, Laurent, 2011. "Assessing structural change in agriculture with a parametric Markov chain model. Illustrative applications to EU-15 and the USA," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114668, European Association of Agricultural Economists.
    4. Alexander Gocht & Norbert Röder & Sebastian Neuenfeldt & Hugo Storm & Thomas Heckelei, 2012. "Modelling farm structural change: A feasibility study for ex-post modelling utilizing FADN and FSS data in Germany and developing an ex-ante forecast module for the CAPRI farm type layer baseline," JRC Research Reports JRC75524, Joint Research Centre.
    5. Legrand D. F, Saint-Cyr, 2017. "Farm heterogeneity and agricultural policy impacts on size dynamics: evidence from France," Working Papers SMART 17-04, INRAE UMR SMART.
    6. Stokes, Jeffrey R., 2006. "Entry, Exit, and Structural Change in Pennsylvania's Dairy Sector," Agricultural and Resource Economics Review, Cambridge University Press, vol. 35(2), pages 357-373, October.
    7. Miller, Noah J. & Griffin, Terry & Bergtold, Jason & Sharda, Ajay & Ciampitti, Ignacio, 2017. "Adoption of Precision Agriculture Technology Bundles on Kansas Farms," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252832, Southern Agricultural Economics Association.

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