Hostname: page-component-586b7cd67f-t7czq Total loading time: 0 Render date: 2024-11-28T13:21:33.276Z Has data issue: false hasContentIssue false
  • English
  • Français

Cost Efficiency and Scope Economies of Crop and Livestock Farms in Missouri

Published online by Cambridge University Press:  28 April 2015

Shunxiang Wu  and
Tony Prato
Shunxiang Wu
Affiliation:
American Express, Phoenix, AZ
Tony Prato
Affiliation:
Department of Agricultural Economics, University of Missouri, Columbia, MO
Get access Rights & Permissions [Opens in a new window]

Abstract

This study investigates productive efficiency for a sample of Missouri crop-only (specialized) and integrated crop-livestock (diversified) farms using a cost frontier approach. Results suggest that significant cost inefficiency exists among sample farms. Lower cost efficiency in both types of farms was attributed to improper scale of operations and misallocation of inputs. On average, diversified farms were as technically and scale efficient as specialized farms. Lower allocative efficiency diluted gains in technical efficiency and resulted in greater cost inefficiency for diversified farms than for specialized farms. Technical efficiency was independent of farm size, whereas allocative, scale, and scope efficiencies were not.

Keywords

cost efficiencycroplivestockMissouri farmsscope economiesQ12R32
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 38 , Issue 3 , December 2006 , pp. 539 - 553
Copyright
Copyright © Southern Agricultural Economics Association 2006

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Afrait, S. “Efficiency Estimation of Production Functions.” International Economic Review. 13(1972):568-98.CrossRefGoogle Scholar
Bravo-Ureta, B.E., and Lee, T.. “Socioeconomic and Technical Characteristics of New England Dairy Cooperative Members and Nonmem-bers.” Journal of Agricultural Cooperation 3(1988):12–17.Google Scholar
Byrnes, P., Färe, R., Grosskopf, S., and Kraft, S.. “Technical Efficiency and Size: The Case of Illinois Grain Farms.” European Review of Agricultural Economics 14(1987):367-81.CrossRefGoogle Scholar
Chames, A., and Cooper, W.. “Programming with Linear Fractional Functionals.” Naval Resource and Logistics Quarterly 9(1962):181-85.Google Scholar
Chavas, J.V., and Aliber, M.. “An Analysis of Economic Efficiency in Agriculture: A Nonpara-metric Approach.” Journal of Agricultural and Resource Economics 18(1993): 1–16.Google Scholar
Coelli, T., Rao, D.S. Prasada, and Battese, G.E.. An Introduction to Efficiency and Productivity Analysis. Boston: Kluwer Academic, 1998.CrossRefGoogle Scholar
Deller, S.C., and Nelson, C.H.. “Measuring the Economic Efficiency of Producing Rural Road Services.” American Journal of Agricultural Economics 73(1991):194–201.CrossRefGoogle Scholar
Färe, R., Grosskopf, S., and Lovell, C.A.K.. The Measurement of Productivity Efficiency. Boston: Kluwer Nijhoff, 1985.CrossRefGoogle Scholar
Farrell, M.J. “The Measurement of Productive Efficiency.” Journal of Royal Statistic Society 120(1957):253-81.CrossRefGoogle Scholar
Featherstone, A.M., Langemeier, M.R., and lernet, M.. “A Nonparametric Analysis of Efficiency for a Sample of Kansas Beef Cow Farms.” Journal of Agricultural and Applied Economics 29(1997): 175-84.CrossRefGoogle Scholar
Featherstone, A.M., Moghnieh, G.A., and Goodwin, B.K.. “Farm-Level Nonparametric Analysis of Cost-Minimization and Profit-Maximization Behavior.” Agricultural Economics 13(1995):109-17.Google Scholar
Fernandez-Cornejo, J., Gempesaw, C.M., Elterich, J.G., and Stefanou, S.E.. “Dynamic Measures of Scope and Scale Economies: An Application to German Agriculture.” American Journal of Agricultural Economics 74(1992):329-42.CrossRefGoogle Scholar
Fernandez-Cornejo, J. “Nonradial Technical Efficiency and Chemical Input Use in Agriculture.” Agricultural and Resource Economic Review. 23(1994):11–21.CrossRefGoogle Scholar
Forsund, F.R., Lovell, C.A.K., and Schmidt, P.. “A Survey of Frontier Production Functions and their Relationship to Efficiency Measurement.” Journal of Econometrics 12(1980):5–25.CrossRefGoogle Scholar
Hallam, A. “Economies of Size, Theory, Measurement and Related Issues.” in Size, Structure, and the Changing Face of American Agriculture, Hallam, A., ed. Boulder, CO: Westview Press, 1993.Google Scholar
Kalaitzandonakes, N.G., Wu, S., and Ma, J.. “The Relationship Between Technical Efficiency and Firm Size Revisited.” Canadian Journal of Agricultural Economics 40(1992):427-42.CrossRefGoogle Scholar
Kalirajan, K. “The Importance of Efficient Use in the Adoption of Technology: A Micro Panel Data Analysis.” Journal of Productivity Analysis 2(1991):113-26.CrossRefGoogle Scholar
Kalirajan, K.P., and Shand, R.T.. “Types of Education and Agricultural Productivity: A Quantitative Analysis of Tamil Nadu Rice Farming.” Journal of Development Study 10(1985):232-43.CrossRefGoogle Scholar
Kumbhakar, S., and Lovell, C.A.K.. 2003. Stochastic Frontier Analysis. NY: Cambridge University Press.Google Scholar
Kumbhakar, S., Ghosh, S., and McGuckin, J.. “A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Industry.” Journal of Business and Economic Statistics 9(1991):279-86.Google Scholar
Missouri Agricultural Statistical Service (MASS). 2003. Farm Facts. Internet Site: http://agebb.missouri.edu/mass/ (Accessed April 17, 2006).Google Scholar
Latruffe, L., Balcombe, K., Davidova, S., and Zawalinska, K.. 2002. “Determinants of Technical Efficiency of Crop and Livestock Farms in Poland.” Internet site: http://www.rennes.inra.fr/economie/index.htm (Accessed April 17, 2006).Google Scholar
Leathers, H.D. “Allocatible Fixed Inputs as A Cause of Joint Production: An Empirical Investigation.” Journal of Agricultural Economics 35(1992): 109-24.CrossRefGoogle Scholar
Nehring, R., Fernandez-Cornejo, J., and Banker, D.. “Off-Farm Labor and the Structure of US Agriculture: The Case of Corn/Soybean Farms.” Paper presented at the annual meeting of the American Agricultural Economics Association, Long Beach, CA. July 28-31, 2002.Google Scholar
Preckel, P.V., Akridge, J.T., and Boland, M.A., “Efficiency Measures for Retail Fertilizer Dealers.” Agribusiness 13(1997):497–509.3.0.CO;2-1>CrossRefGoogle Scholar
Ray, S.C. “A Translog Cost Functions Analysis of the U.S Agriculture, 1939-1999.” American Journal of Agricultural Economics 64(1985): 660-65.CrossRefGoogle Scholar
Rowland, W., Langemeier, M.R., Schurle, B.W., and Featherstone, A.M.. “A Nonparametric Analysis of Efficiency for a Sample of Kansas Swine Operations.” Journal of Agricultural and Applied Economics 30(1998):189-99.CrossRefGoogle Scholar
Qiu, Z., Kalaitzandonakes, N.G., and Wellman, D.. “Firm-Level Productivity Growth Decomposition: A Non-Parametric Malmquist Approach.” Paper presented at the annual meeting of American Agricultural Economic Association, San Antonio, TX, August 8-10, 1996.Google Scholar
Seiford, L., and Thrall, R.. “Recent Developments in DEA: The Mathematical Programming Approach to Frontier Analysis.” Journal of Econometrics 46(1990):7–38.CrossRefGoogle Scholar
Tauer, L.W. and Hanchar, J.J.. “Nonparametric Technical Efficiency with K Firms, N Inputs, and M Outputs: A Simulation.” Agricultural and Resource Economic Review. 16(1995):185-89.CrossRefGoogle Scholar
U.S. Department of Agriculture. July 2002. Agricultural Prices: 2001 Summary. Internet site: http://usda.mannlib.cornell.edu/reports/nassr/price/zap-bb/agpran02.pdf (Accessed April 17, 2006).Google Scholar
Weersink, A., Turvey, C.G., and Godah, A.. “Decomposition Measures of Technical Efficiency for Ontario Dairy Farms.” Canadian Journal of Agricultural Economics 38(1990):439-56.CrossRefGoogle Scholar
Wu, S., Devadoss, S., and Lu, Y.. “Estimation of Technical Efficiency and its Decomposition for Sugar-beet Farms.” Applied Economics 35(2003): 471-84.CrossRefGoogle Scholar
Wu, S., Prato, T., and Kaylen, M.. “Cost Efficiency and its Decomposition for Missouri Grain Farms.” The Journal of Economics 31 (2005): 19–44.Google Scholar