Cost functions in relation to farm size and machinery technology in southern Iowa

Date
2017-06-21
Authors
Ihnen, Loren
Heady, Earl
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Abstract

This study was designed to (a) estimate the relationship between farm size and per-unit crop production costs for selected machinery combinations and farm situations in a southern Iowa area and (b) compare certain of the empirical results of this study with the agricultural structure of the study area. Budgeting techniques were used to estimate the relationship between crop acreage and crop production costs.

Estimates of average costs per dollar of crop product were made for five machinery combinations and for crop acreages varying from 40 to 640 acres on three different soil mixtures in the Shelby- Grundy- Haig soil association area. These three soil mixtures are referred to as hilly, average and upland farms. Cropland, as a proportion of total land, increases from approximately 30 percent on the hilly farm to 70 percent on the upland farm. Two budgeting models were considered. In model I, only cropland was considered. In model II. pasture production marketed through a beef- cow enterprise was considered along with cropland. Changing from model I to model II had relatively little effect upon the basic budgeting results or cost relationships.

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