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Curves describing the unit cost of production by herdsize were estimated separately for stanchion and parlor milking systems using empirical data for 1995 from 403 New York dairy farms. The least cost size for stanchion barns was 120 cows, for which the total cost of producing a hundredweight of milk was $13.86, or $1.00 less than the cost of produ...
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... Compared to stanchion milking systems, use of a parlor generally reduces milking labor costs and is more cost-efficient for larger herds (Tauer 1998). Various configurations include swing, herringbone, parallel, side opening, polygon, carousel, flat barn. ...
Adoption rates of 19 dairy technologies, management practices, and production
systems (TMPPS) are estimated for the U.S. for 2005 and 2010 and, in cases where
data are available, 1993 and 2000. Logit models are estimated to determine types of
farms most likely to use each TMPPS. TMPPS experiencing the greatest increases in
adoption have been automatic take-offs, the internet, breeding technologies, and
USDA certified organic production; recombinant bovine somatotropin experienced a
reduction in usage between 2005 and 2010. Factors influencing TMPPS usage include
farm size, tenure, and diversification; farmer age and education; and region of the U.S.
where the farm is located.
... Early studies that allowed for different technologies across firms include Mester [1993], who split US savings and loans banks based on if they are mutual or stock owned (essentially a private versus public split), Altunbas et al. [2001], splitting on organizational structure of banks, and Mester [1996] and Bos and Schmiedel [2007] splitting based on geography. Beyond the banking context, Bravo-Ureta [1986], Tauer [1998], Newman and Matthews [2006] specify heterogeneous technologies for dairy farms based on breed, location and production processes, respectively. This is easily tackled when observable classification information is present. ...
... If T is large, it seems implausible that the level of inefficiency of a firm may stay constant for an extended period of time or that a firm which was persistently inefficient would survive in the market. So the question is: Should one view the time-invariant component as persistent inefficiency [as per Kumbhakar, 1991, Kumbhakar and Heshmati, 1995, Kumbhakar and Hjalmarsson, 1993, 1998 or as individual heterogeneity that captures the effects of (unobserved) time-invariant covariates and has nothing to do with inefficiency? If the latter setting holds, then the results from the time-invariant inefficiency models are incorrect. ...
This monograph is an extension of our lecture notes for several short courses presented at Aalto University, the University of Stavanger, and Wageningen University in 2013. The organizers of those workshops are warmly acknowledged. All errors are ours alone.
... This approach has been used in previous dairy farm studies. For example, Hoch split a sample of Minnesota dairy farms into two groups based on location; Bravo-Ureta classified a sample of New England dairy farms based on the breed of the herd; Tauer (1998) estimated different cost curves for stanchion and parlor dairy farms; and Newman and Mathews estimated different output distance functions for specialist and non-specialist dairy farms. ...
Agricultural studies have often differentiated and estimated different technologies within a sample of farms. The common approach is to use observable farm characteristics to split the sample into several groups and subsequently estimate different functions for each group. Alternatively, unique technologies can be determined by econometric procedures such as latent class models. This paper compares the results of a latent class model with the use of a priori information to split the sample using dairy farm data in the application. Latent class separation appears to be a superior method of separating heterogeneous technologies.
... The flat barn system and stanchion systems tend to be more labor intensive, physically demanding and in most cases result in lower cow throughput per hour than a comparable parlor system, but are less expensive to build and equip than a milking parlor facility. For small farms, the cost of stanchion technology is generally lower than that of parlor technology (Tauer 1998 and processing the data: collected by the same organization in a similar format using hand enumeration, involving a complex sampling scheme, and representing the same population with broad national coverage. We report findings in Tables 1 and 2.Table 1 Using the jackknife, there are 15 replicates and 28 degrees of freedom. ...
The introduction of new technology, management practices, and alternative production systems has resulted in rapid structural change in the US dairy industry. This paper examines adoption rates and adopter characteristics for the following dairy technologies, practices, and systems: holding pen with an udder washer, milking units with automatic take-offs, genetic selection technologies, recombinant bovine somatotropin, membership in the Dairy Herd Improvement Association, computerized feed delivery systems, computerized milking systems, use of a nutritionist to design feed rations, grazing, milking cows 3 times daily, and milking parlors. Four of these were used on a greater percentage of farms in 2005 than in 2000, but increased farm sizes and the interaction of farm size with adoption suggest a greater percentage of milk being produced under each, with the exception of grazing. Except for grazing, technologies were generally complementary.
... Some researchers have chosen their data sample based on some criterion of homogeneous production, such as Tauer and Belbase (1987) who delete farms in their sample with technologies too different from the norm iii and Felthoven et al. (2009) who focus on a portion of a fishing fleet with specific characteristics (catcher-processors). Some have chosen particular characteristic to divide the sample and estimate different frontiers, such as Hoch (1962) who separates Minnesota dairy farms by location, Bravo-Ureta (1986) who separates new England dairy farms based on breed, Newman and Matthews (2006) and Tauer (1998) who separate Irish and New York dairy farms by production process (stanchion versus parlor milking and specialist and nonspecialist farms, respectively), and Kumbhakar et al. (2009) and Gillespie et al. (2009) who separate Finnish and U.S. dairy farms, respectively, into conventional and organic farms. Researchers such as Maudos et al. (2002) and Alvarez et al. (2008) instead accommodate multiple criteria for separating farms using cluster analysis based on output and input ratios, which divides the sample according to similarities in specific characteristics by maximizing the variance between groups and minimizing the variance within groups. ...
This contribution is based on the notion that different technologies are present in an industry. These different technologies result in differential “drivers” of economic performance depending on the kind of technology used by the individual firm. In a first step different technologies are empirically distinguished. Subsequently, the associated production patterns are approximated and the respective change over time is estimated. A latent class modelling approach is used to distinguish different technologies for a representative sample of E.U. dairy producers as an industry exhibiting significant structural changes and differences in production systems in the past decades. The production technology is modelled and evaluated by using the flexible functional form of a transformation function and measures of first- and second-order elasticities. We find that overall (average) measures do not well reflect individual firms’ production patterns if the technology of an industry is heterogeneous. If there is more than one type of production frontier embodied in the data, it should be recognized that different firms may exhibit very different output or input intensities and changes associated with different production systems. In particular, in the context of localized technical change, firms with different technologies can be expected to show different technical change patterns, both in terms of overall magnitudes and associated relative output and input mix changes. Assuming a homogenous technology would result in inefficient policy recommendations leading to suboptimal industry outcomes.
... These are distinct milking systems, and it would be expected that production characteristics would differ between these two systems as measured by output elasticities, returns to scale, input substitutability and efficiency. Thus, some studies have either estimated different technologies for parlor and stanchion farms (Tauer, 1998) or allowed for differences in efficiency between them (Tauer, 1993; Kompas and Che, 2006). ...
... Bravo-Ureta (1986) classified his sample according to herd breed. Tauer (1998) andKatsumata, andTauer (2005) estimated different cost functions for farms using alternative milking systems. Newman and Matthews (2006) estimated independent stochastic distance functions for specialized and nonspecialized dairy farms. ...
In recent decades, the dairy sector has shown a global tendency toward intensification. This structural change may have significant effects on farm efficiency and, consequently, on the economic results of the farms. The goal of this study was to offer an empirical analysis of the effect of intensification on dairy farming. To do this, we first classified a sample of dairy farms according to their level of intensification by using a cluster analysis. We then estimated independent stochastic cost frontiers for each group of farms to calculate their levels of efficiency. The methodology used in this study allowed for the presence of different technologies within a sample, which is a methodological issue frequently avoided in the agricultural economics literature. The empirical results showed that intensive farms were closer to their cost frontier than extensive ones, suggesting a positive relationship between intensification and efficiency.
... at milk by stanchion technology have small herd sizes because the technology is labor intensive, and dairy farms with large herd size use parlor technology which is more capital intensive. It is therefore presumed that the cost of production favors stanchion milking technology for small herd sizes and parlor milking technology for large herd sizes. Tauer (1998) shows this presumption to be true for New York dairy farms in 1995 by estimating cost curves separately for stanchion and parlor technologies. ...
This paper empirically estimates cost functions for two milking technologies, stanchion and parlor, using farm level data from New York dairy farms for the years 1993 through 2002. A translog cost function was estimated along with input cost share equations for each milking technology by Iterative Seemingly Unrelated Regression. Any pair of inputs among feed, hired Labor, and cows had some degree of substitutability except for a pair of feed and hired labor evaluated by the Allen elasticity, and that of hired labor and feed evaluated by the Morishima elasticity. Additionally, economies of scale were found to exist over the entire range of output levels of the samples. The cost of stanchion technology was lower than that of parlor technology over the sample range of output levels of stanchion technology, but because parlor using farms were larger and costs continually decline, parlor using farms eventually experience lower costs than farms milking with stanchions.
... Bennett et al. (1991) evaluated double-4, -6, -8, and double-10 herringbone parlors and double-6, -8, -10, and double- 12 parallel style parlors. Another study concluded that herds with more than 160 cows could produce milk at a lower cost by using a parlor than a stanchion barn (Tauer, 1998). The efficiencies of parlor milking systems also vary. ...
A modernization survey was used to determine producer satisfaction, efficiency, and investment cost measures of different milking systems. The 301 producers included in this study expanded herd size by at least 50% for smaller herds (60 to 100 cows), or 40% for larger herds, (>100 cows) between 1994 and 1998. The milking systems analyzed and compared were stall barn with pipeline, flat barn parlor walk through and back-out, and herringbone or parallel parlor in old barn or new building. Investment costs per cow were higher for pit parlor in new building, $979. Parallel parlors had a higher cost per milking unit, $13,201, and cost per cow, $860, than herringbone, $8944 and $582, respectively. Herringbone parlors were used more hours per day, 10.75, than parallel parlors, 8.84, of similar size. Pit parlors in new buildings were more labor efficient, as measured by cows per worker hour, than stall barns with pipeline or flat parlor or pit parlors in old barns. Herringbone and parallel parlor in new building were similar for cows per hour (82 and 83) and cows per worker hour (41 and 43). Parallel or herringbone parlors in old barns had fewer cows per hour (63 and 58) than parallel or herringbone parlors in new buildings. Survey respondents showed greater satisfaction for time spent milking, physical comfort of milker, and milk quality for parlor types over stall barn with pipeline. Safety of operator satisfaction was higher for pit parlors than flat parlors or stall barn. No difference in satisfaction was observed between parallel and herringbone parlors.
