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Land Values, Market Forces, and Declining Dairy Herd Size: Evidence from an Urban-Influenced Region

Published online by Cambridge University Press:  15 September 2016

Adesoji O. Adelaja ,
Tracy Miller  and
Mohammad Taslim
Adesoji O. Adelaja
Affiliation:
Department of Agricultural Economics and Marketing, and associate director of the Rutgers Ecopolicy Center, Rutgers University, New Brunswick, N.J.
Tracy Miller
Affiliation:
Department of Economics, Grove City College, Grove City, Penna
Mohammad Taslim
Affiliation:
Department of Economics, University of New England, Armidale, Australia
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Abstract

The role of land values in the dairy industry of an urban-influenced region is investigated by estimating a dairy herd equation based on pooled cross-section and time-series data from counties in New Jersey, Pennsylvania, and New York. The use of cross-terms between hypothesized causal variables and a dummy variable capturing the effect of location allowed the estimation of the differences across states in the effects of milk, feed, and land prices. Results confirm the important role of rising land values in the decline of the dairy industry in the tri-state area, and suggest greater vulnerability of dairy enterprises in urban-influenced areas to rising adverse economic forces. The adverse effects of declining milk prices and higher land values are greatest in New Jersey. The results support the notion that programs such as price support, farmland preservation, farmland assessment, and right-to-farm may have to be maintained in order to retain dairy farms at the urban fringe, where land values are rising rapidly.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 27 , Issue 1 , April 1998 , pp. 63 - 71
Copyright
Copyright © 1998 Northeastern Agricultural and Resource Economics Association 

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