Technological Change and Economies of Scale in U.S. Poultry Processing

Posted: 13 Dec 2005

See all articles by Michael E. Ollinger

Michael E. Ollinger

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

James M. MacDonald

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Milton Madison

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Abstract

This article uses a unique data set provided by the Census Bureau and a translog cost function to empirically examine technological change in the U.S. poultry industry. Results reveal substantial scale economies that show no evidence of diminishing with plant size and that are much greater than those realized in cattle and hog slaughter. Findings suggest that consolidation is likely to continue, particularly if demand growth diminishes, and that controlling for plant product mix is critical to accurate cost estimates.

Suggested Citation

Ollinger, Michael E. and MacDonald, James M. and Madison, Milton, Technological Change and Economies of Scale in U.S. Poultry Processing. American Journal of Agricultural Economics, Vol. 87, No. 1, pp. 116-129, February 2005. Available at SSRN: https://ssrn.com/abstract=856473 or http://dx.doi.org/10.1111/j.0002-9092.2005.00706.x

Michael E. Ollinger (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
(202) 694-5454 (Phone)

James M. MacDonald

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
(202) 694-5610 (Phone)

Milton Madison

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

1301 New York Ave. NW
Washington, DC 20250
United States

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