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Entry, Exit, and Structural Change in Pennsylvania's Dairy Sector

Published online by Cambridge University Press:  15 September 2016

Jeffrey R. Stokes
Jeffrey R. Stokes*
Affiliation:
Department of Agricultural Economics and Rural Sociology at the Pennsylvania State University in University Park, Pennsylvania
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Abstract

Data on the number of Pennsylvania dairy farms by size category are analyzed in a Markov chain setting to determine factors affecting entry, exit, expansion, and contraction within the sector. Milk prices, milk price volatility, land prices, policy, and cow productivity all impact structural change in Pennsylvania's dairy sector. Stochastic simulation analysis suggests that the number of dairy farms in Pennsylvania will likely fall by only 2.0 percent to 2.5 percent annually over the next 20 years, indicating that dairy farming in Pennsylvania is likely to be a significant enterprise for the state in the foreseeable future.

Keywords

dairymaximum entropyfarm sizeMarkov chainsimulation
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 35 , Issue 2 , October 2006 , pp. 357 - 373
Copyright
Copyright © 2006 Northeastern Agricultural and Resource Economics Association 

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