TECHNICAL AND SCALE EFFICIENCIES OF U.S. GRASS-FED BEEF PRODUCTION: WHOLE-FARM AND ENTERPRISE ANALYSES

Berdikul Qushim,Guillermo Scaglia,Jeffrey M Gillespie,Basu Deb Bhandari

doi:10.1017/aae.2018.7

Abstract

AbstractA stochastic production frontier approach was used to estimate input distance functions for U.S. grass-fed beef (GFB) production. Average technical efficiencies of 0.84 and 0.79 were found for U.S. GFB whole farms and enterprises, respectively. Producer education level, experience, farm size, annual net farm income from the GFB operation, annual net household income from off-farm sources, and regional differences are the efficiency drivers of U.S. GFB farms. Increasing returns to scale were found for U.S. GFB farms. Our results suggest that U.S. GFB farms can be scale efficient if the optimal size of the operation is greater than approximately 100 GFB animals.

Highlights

Grass-fed beef (GFB) production in the United States has experienced growth and increased research and development attention over the last two decades because of human health, environmental, animal welfare, and sustainability perspectives (Mills, 2003; McCluskey et al, 2005)
Because the U.S GFB industry has only recently experienced increased interest after many decades of little interest from U.S producers and consumers, the relatively few producers who have become recently involved in the industry have had little access to information on the most efficient practices for GFB production
Given that our sample size is relatively small with approximately two farms per state, we suggest that results should be interpreted with caution

Summary

Introduction

Grass-fed beef (GFB) production in the United States has experienced growth and increased research and development attention over the last two decades because of human health, environmental, animal welfare, and sustainability perspectives (Mills, 2003; McCluskey et al, 2005). The U.S imports GFB from New Zealand and Australia (Umberger, Boxall, and Lacy, 2009; U.S Department Agriculture, Economic Research Service [USDA-ERS], 2015), suggesting the U.S GFB industry has significant growth potential. Existing and potential GFB producers can benefit from knowing how their operations can be structured to become more efficient and profitable. The present study evaluates productivity and profitability measures of GFB production and the variables that influence the production efficiency of U.S GFB operations. We are unaware of previous studies that have focused on the efficiency of GFB operations

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Conclusion