Technology Adoption Decisions in Dairy Production and the Role of Herd Expansion

Hisham S. El-Osta, Mitchell J. Morehart

Elsewhere No. (0008), April 1999

The notion that technological change is a major determinant of structural change is perhaps most relevant to farms that specialize in dairy production. The expense of advanced laborsaving technologies, which could be afforded by larger operations, has also restrained """"open"""" entry into dairy farming. In addition, technological change limited to milk production has also influenced specialization in dairy farming. As a result, fewer but larger farms now characterize the structure of U.S. milk production. Because of the structural implication of technological adoption, the analysis examines the determinants of adopting capital- and management-intense technologies, with special emphasis given to the role of herd expansion.

Keywords: Dairy farms, technology, labor intensive, capital intensive, farm structure, age, size, economies of scale, Economic Research Service, ERS, USDA, U.S. Department of Agriculture

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Updated date: April 1999