SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS December, 1971 THE MIDDLE SIZED FARMING OPERATION: A Goods-and-Services Firm?

Traditionally, the economics of farm number tural firms to be rapidly acquiring additional re-adjustments have been inferred from the relative sources and taking advantage of lower average per positions of firms on a longrun average cost curve, unit costs of production [1, 3]. One would be led to The steep slope of the left portion of the commonly conclude that farms on the upper end of the cost drawn curve suggests demise of the smaller units as curve are in a transitory state of declining or expand-fast as off-farm and inter-farm markets can absorb ing into large sized farms. Some have speculated on their labor and land resources. On the less steeply how many farms would be needed to produce all of declining middle portion of the curve, insufficient the agricultural products [141. However, large volume of output (income) is suggested as a cause of numbers of these apparently inefficient farms are firms quitting. The argument is supported by the fact listening to a different drummer. The only group with that most empirical estimates do not show the long- a rapid decline in numbers is that of the very small run cost curve rising at large outputs. This places farms. Nikolitch [10] attributed 95 percent of the downward pressure on product prices, reducing per decline in farm numbers from 1939 to 1959 to dis-unit margins, and creating income problems for the appearance of farms with sales of under $2,500, and middle group of firms. Adjustments in the farming this was due to a combination of actual disappearanc