Feed substitution and economies of scale in Irish beef production systems

We use a short-run translog cost function to model Irish beef production over the period 2000-2011. Similar to other countries Irish beef farmers operate in various production systems with many farmers specializing in calf rearing, and other farmers specializing in beef fattening or other production systems. In order to identify potential technological differences and differences in scale economies across beef systems we estimate scale economies, own- and cross-price elasticities, and Morishima elasticities of substitution between purchased cattle, purchased feed, home-grown feed and veterinary services for three beef systems. Results suggest that all inputs are substitutes in the cow-calf, calf-to-finish, and other beef systems (store-to-finish and mixed beef systems) whereas extensive economies of scale exist in the cow-calf and calf-to-finish systems. The same trend is observed for other beef systems until 2005 although post-decoupling these systems operate under decreasing returns to scale