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Research Bulletin (Iowa Agriculture and Home Economics Experiment Station)

Abstract

The purpose of this study is to estimate the production or supply potential of Iowa agriculture and is part of a regional study designed for this purpose. Two levels of efficiency are examined in the Iowa study, average technical efficiency and advanced technical efficiency. The pattern of output, resources used, and levels of farm income are analyzed under both conditions. This summary, however, refers only to the conditions of advanced technical efficiency.

A representative farm-aggregation model was used in a linear-programming analysis of resource allocation and potential production. Thirty-one Iowa farms (representative of all the commercial crop and livestock farms in Iowa) were described from primary and secondary data. Linear programming was used to obtain 40 optimal solutions under the advanced-technical-efficiency model for each the 31 representative farms. Each solution resulted from a unique set of sale prices for soybeans, hogs, and beef cattle. The soybean price was either $2 or $2.35 a bushel. The price of hogs ranged from $10.40 to $15 per hundredweight, and the price of choice beef cattle ranged from $16 to $24 per hundredweight. The sale price of corn was $1 a bushel for all 40 solutions. Relatively low livestock prices were used to obtain aggregate livestock supply functions over a relevant quantity range. At each of the 40 price combinations, the optimum solutions for the representative farms were aggregated to give 40 aggregate solutions for Iowa.

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