Seasonality, Capital Inflexibility, and the Industrialization of Animal Production

Jutta Roosen, David A. Hennessy, Thia C. Hennessy
December 2004  [04-WP 351] (Revised)

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Roosen, J., D.A. Hennessy, and T. Hennessy. 2004. "Seasonality, Capital Inflexibility, and the Industrialization of Animal Production." Working paper 04-WP 351. Center for Agricultural and Rural Development, Iowa State University.


Among the prominent recognized features of the industrialization of animal production over the past half century are growth in the stock of inflexible, or use-dedicated, capital as an input in production and growth in productivity. Less recognized is a trend toward aseasonal production. We record the deseasonalization of animal production in Northern Hemisphere countries over the past 70 years. Using Irish farm-level data, we provide evidence that low seasonality favors laborsaving investments. We also suggest that (a) lower seasonality can be Granger-causally prior to increased productivity, and (b) productivity improvements can be Granger-causally prior to lower seasonality. Process (a) should be more likely earlier in the industrialization process. For U.S. dairy production, our empirical tests find some evidence that process (a) operated early in the twentieth century while process (b) operated in more recent times.

Keywords: capital intensity, dairy sector, Granger-causality, regional production systems.