Alternative Procedures for Estimating the Size Distribution of Farms

Abstract

Changes in the number and size distribution of dairy farms in the Northeast have come rapidly in the years since World War II. The objective of this study was to examine some of the newer methods of forecasting changes in this size distribution and ascertain the gains, if any, associated with these methods. Different formulations using Markov processes were compared with simple trend analyses and various functional forms in making projections. During the twenty-year period between 1958 and 1977 the number of farms delivering milk to plants in New York State decreased from slightly more than 45,800 to 16,500, a net decrease of approximately 64 percent. Over the same twenty-year period, annual milk production fluctuated between 9.8 and 11.0 billion pounds with a peak in 1965 and a low point in 1973. During the last five years, 1975–79, the number of farms delivering milk has continued to decline but milk production the the State has increased yearly and is expected to reach an all-time high in 1980. Such structural changes in the dairy industry have stimulated continued interest in problems of milk supply response and future variations in the size distribution of farms.