We compare productivity and technical efficiency of organic and conventional dairy farms in the United States. We address self-selection into organic farming by using propensity score matching and explicitly test the hypothesis that organic and conventional farms employ a single, homogeneous technology. Utilizing the 2005 Agricultural Resource Management Survey on Dairy Costs and Returns Report data, we reject the homogeneous technology hypothesis and find that the organic dairy technology is approximately 13 percent less productive. However, we find little difference in technical efficiency between organic and conventional farms when technical efficiency is measures against the appropriate technology.Key words: dairy, organic, productivity, propensity score matching, stochastic frontier, technical efficiency Carlos D. Mayen is assistant professor in the Department of Agricultural Economics and Agricultural Business, New Mexico State University. Joseph V. Balagtas is assistant professor and Corinne E. Alexander is associate professor, both in the Department of Agricultural Economics, Purdue University.This research was supported by the Economic Research Service, United States Department of Agriculture, through the cooperative agreement # 43-3AEL-5-80064, and by the Purdue University Agricultural Experiment Station. The authors thank Michael Schutz, Jeffrey Dorman, and two anonymous reviewers for helpful comments. 1 Technology Adoption and Technical Efficiency: Organic and Conventional Dairy Farms in the United StatesAlthough the organic dairy sector in the United States is a niche market, it has exhibited potential for growth in the U.S. dairy sector. In 2005, certified organic dairy farms accounted for approximately 1 percent of the dairy cows in the U.S. and accounted for less than 1 percent of total U.S. milk production (McBride and Greene 2007). However, from 2003 to 2006, sales of organic dairy products nearly doubled, making organic dairy one of the fastest growing segments of organic agriculture in the United States, as well as a fast growing segment of U.S. dairy (Organic Trade Association). Growth in demand for organic dairy has been fueled by a complex mix of consumer concerns of food safety, nutrition, concern for the environment, and other factors (Klonsky 2000;Blank and Thompson 2004;Rotz et al. 2007). Growth in supply has been spurred in part by the promise of high returns relative to conventional dairy farming, as well as environmental concerns on the part of producers (McBride and Greene 2007). Proponents of the organic movement have held up the organic model as a potentially profitable alternative to conventional dairy production, especially for smaller operations as well as new farmers (Sato et al. 2005;Rotz et al. 2007).Yet little is known about the production practices of the organic dairy sector, not in small part because the industry is so new. In particular, little work to date has systematically addressed the effect of organic standards on the production process. Under standards d...

Fruit is an important component of the food industry in the United States, and “fresh-cut” products are an increasing portion of that consumption. We found that packaging and juice content played a significant role in the choices Indiana consumers made when purchasing fresh-cut melon products. Brand was not as important as the other fresh-cut melon attributes. Indiana consumers had a clear dislike for cup-shaped transparent packages compared with tamper-proof, bowl, and squared packages. However, they were willing to pay a premium for packages that have no fruit juices on the bottom.

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With the exception of Azzam and Skinner (2007), the economic literature on farm structure has largely neglected issues of vertical organization of the farm. In this article we estimate a multi-stage, multi-output cost function in order to measure vertical economies of scope in organic and conventional dairy farms. In particular, we model the integration of production of grains and forages on dairy farms. We find negligible vertical economies of scope for conventional dairy farms but significant vertical economies of scope in organic dairy production. The large vertical economies of scope for organic dairy farms are consistent with higher costs of obtaining organic feed through market transactions associated with an underdeveloped market for organic feeds.