Cost-Size Relationships of North Dakota Ranches

The article addresses the relationship between cost versus ranch size. Ranchers observed that the costs of resources used in their ranch businesses were increasing at a faster rate than the prices they received for their product which was beef cattle. This phenomenon, was termed the "cost-price squeeze". This reduces the margin between receipts and costs per animal sold. Several researchers have studied the ranch cost-size relationships using ranch survey data, which may be obscured by differences in management ability, range condition and related factors among ranchers surveyed. A study, using linear programming, was employed to determine was conducted to help determine the production costs for ranches of varying sizes in south-western North Dakota. the results are presented. Costs per unit of gross income decrease sharply as ranch size increases from a one-man operation to a two or three-man ranch, but cost benefit is slight when four-man