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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
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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

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