Postprint version. Published in Canadian Journal of Agricultural Economics, Volume 41, Issue 2, March 1, 1993, pages 177-195. Copyright © 1993 Canadian Agricultural Economics Society. Published by Blackwell Publishing Group. The definitive version is available at http://dx.doi.org/10.1111/j.1744-7976.1993.tb03742.x.
NOTE: At the time of publication, the author Wayne H. Howard was not yet affiliated with Cal Poly.
The economics of introducing ultrafiltration (UF) into the Ontario dairy industry is analyzed. First, a partial budget is developed to determine feasibility of UF on the farm. The budget indicates that the great majority of Ontario dairy farms are not large enough to capture the economies of size inherent in the new technology. Second, a location-allocation model is used to determine the feasibility, number and location of UF collection centers in Ontario. The model indicates that the UF centers would capture the economies of size and the centers would benefit the dairy industry as a whole. However, processors of soft products and consumers of hard products could be worse off because of market changes caused by the UF centers
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