ECONOMIES OF SIZE IN COW-CALF PRODUCTION

Economies of size measure the relationship between the size of operati on and the average cost of production or break-even price. Previous re search indicates that farms with 200 and 300 beef cows have average to tal costs that are 4 and 6% below those of a farm with 100 beef cows. Initial results of this study indicate that economies of size exist at least up to the 500 to 999 head range. The average economic cost of p roduction for herds with 500 to 999 head is lower than that of any oth er herd size group. On average, herds with less than 500 cows have hig her costs than herds with more than 500 cows. Based on the results of this study, for any size operation, it is imperative to control costs.