Urban Influence on Costs of Production in the Corn Belt
Posted: 13 Oct 2006
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.
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