each sales category in each cohort are deflated by the index of prices received for dairy
products. The remaining agricultural sales are deflated by the index of prices received
for all farm products (USDA, 2001, 2005).
Results
We discuss our findings with regard to each of the questions raised in the objectives:
(1) Do dairy firms in the largest size cohorts grow at least as rapidly as firms in medium
size cohorts? (2) Do firms become more diversified over time? (3) If they do become
more diversified over time, do larger firms diversify more rapidly than medium-sized
firms? Answers to these questions are provided by examining results for the incumbent
cohorts. We also report the results of the two hypothesis tests associated with the first
question and determine temporal changes in the distribution of firms within cohorts. We
then report findings with regard to entry and exit of firms over the 10-year data period
between the 1992 and 2002 censuses. Before providing results with regard to those
questions, we describe the distributional properties of the data for the incumbent cohorts.
Firm Distribution by Cohort and Census
The first four statistical moments of the 1992 farm size distribution of each cohort are
reported along with median and approximate range in Table 1. The relatively small size
of most farms with milk cows is evident from these data. Although our sample of 73,406
farms excluded retired and residential/lifestyle farmers, nearly half had agricultural sales
of less than $100,000 in 1992. Only 10 percent had sales in excess of $330,000.
Cohorts 1-9 had medians that were very similar to their means, and they had small
standard deviation, skewness, and kurtosis coefficients. The distribution of cohort 1 was
slightly left-skewed, indicating a little higher probability of farms being larger than the
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