PRODUCING MORE MILK ON FEWER FARMS - NEOCLASSICAL AND NEOSTRUCTURAL EXPLANATIONS OF CHANGES IN DAIRY FARMING

Neoclassical theory in economics has served as the guiding paradigm fo r agricultural development in the United States. At one level, this mo del emphasizes the substitution of capital in the form of machinery an d chemicals for land and labor. At another level, the paradigm calls f or the introduction of mass production techniques, such as product sta ndardization and the routinization of labor processes. Using data on d airy farms and dairy processors from the 50 states, the neoclassical m odel accounts for changes in productivity on dairy farms; however, the model is less useful in accounting for changes in dairy farm structur e. To explain changes in structure, recent neostructural theory that l inks the structure of markets to the structure of production is used. It is concluded that persistence of family-size dairy farms may rest m ore on developing and protecting markets for the milk they produce tha n with tinkering with the neoclassical model.