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Urban Influence on Costs of Production in the Corn Belt
Author(s) -
Nehring Richard,
Barnard Charles,
Banker David,
Breneman Vince
Publication year - 2006
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2006.00907.x
Subject(s) - livestock , production (economics) , agricultural economics , frontier , business , stochastic frontier analysis , agricultural science , natural resource economics , economics , geography , environmental science , forestry , archaeology , macroeconomics
This article determines the relative technical efficiency of rural‐ and urban‐influenced crop/livestock enterprises in the Corn Belt. Farmers in urban‐influenced locations are less technically efficient than farmers in rural locations. During 1998–2000, stochastic production frontier procedures indicate that a 10% increase in urban influence leads to a close to 4% decrease in technical efficiency. The most successful urban‐influenced farms have controlled costs as effectively as rural farms. They have tended to de‐emphasize that nondairy livestock activities—particularly beef and hogs—do not rely extensively on off‐farm income, and have relatively large, less residential/lifestyle operations compared to less successful urban‐influenced farmers. However, our statistical analysis clearly bears out the refrain in popular literature that urban proximity raises the cost for, and decreases the viability of, traditional farms.