Proceedings

PR – Milk Components And Farm Business Characteristics: Estimation Of Production Functions Versus A Multiple Output Distance Function

The effects of inputs and business factors on the four milk outputs of aggregate milk, butterfat, protein, and other solids were estimated using four individual production functions, and a separate stochastic output distance function, with New York dairy farm data. Results show that 13 independent variables out of 22 display statistically significant effects on the production of at least one of the four milk components. Differential impacts of some inputs on component production indicate that milk component composition can be modified given component prices. Profit increase potentials were computed for inputs.

Keywords: farm business characteristics, milk component production, seemingly unrelated regression, multiple output distance function, technical efficiency.

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Author(s): Cho, J., Tauer, L.W.

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Organizations(s): Applied Economics and Management, Cornell University, Ithaca, New York