of the combine was swift and decisive. In 1920 there were only 4,000 combines, but by 1930 there were 61,000,
by 1940 there were 190,000, and by 1950 there were 714,000. See U.S. Department of Agriculture, Agricultural
Statistics 1957 , (1958), Table 639, p. 532.
31. Hotter weather tends to increase decay as does freezing. Also, modern growers burn cane fields prior to cutting
as a cheap disposal method for waste leaves. Burning, which began during World War II, makes the cane even
more susceptible to tissue decay. See Alexander (1973) on “post harvest quality decline” (577-581).
32. In their study of technology and structure of agriculture, Ellickson and Brewster (1947) note the establishment
of vertical control in instances where timeliness costs were crucial. “There are, for example, instances of full owner
operators ceasing to be family farmers because they have so bargained away their control over farm operations...
Such instances are found most frequently in cases of extremely perishable crops, where 'timing' is of the essence
and where alternative market outlets are not available” (844).
33. Sugar has another interesting feature: Though the cane is fragile to store, the raw sugar is extremely robust.
Once the raw sugar is further processed into refined sugar, it again becomes fragile and easily deteriorates. As a
result, raw sugar is processed close to the point of production but is then shipped all over the world, where it is
refined near the point of consumption.
34. U.S. Department of Commerce, Bureau of the Census (1999), United States Data, Table 25, Cattle and Calves-
Sales. The trend toward larger firms continues. The NASS “Cattle on Feed” report for February 14, 1997, shows
the 45 largest firms with an average inventory of 54,689 head and an average annual sales of 124,578 head.
35. U.S. Department of Commerce, Bureau of Census (1993), Table 18, p. 25. McBride (1997) shows that this
average of 40 heads per farm has remained stable as far back as 1969.
36. U.S. Department of Commerce, Bureau of the Census (1999) United States Data, Table 47, Summary by Type
37. See Knoeber (1989) or Vukina (2001) for detailed discussions of the poultry industry changes during the
38. Although the chickens are grown indoors, weather influences output through large shocks. Power outages, as
well as cold or hot outside temperatures can lead to small changes in inside temperatures that can be disastrous in
the crowded barns. Hence it is important to have a residual claimant on site. As these barns become more insulated
over time to outside factors, the barns begin to be run by wage employees. Knoeber (1989) analyzes the details of
the tournament-based grower compensation contracts.
39. Royer and Rogers (1998, part III) have edited several chapters detailing the changes in the hog industry.
40. Kliebenstein and Lawrence (1995) argue that contracting in the hog industry is because of risk sharing. Huffman
(2001), however, notes the importance of task specialization and the constraints imposed by biological production.
What he calls “phases” are roughly equivalent to our “stages”:
Livestock production is relatively free of constraints due to seasonal or spatial attributes. Production can be
organized in sequential phases where all phases from birth to finishing occur on one farm or where different
farms specialize in different phases. Advances in animal health products, animal feeding, housing and
equipment, and management have made it technically possible to speed up the growing and finishing phases by
using large confined animal production systems which greatly increase animal densities and populations. To
further reduce disease problems in large confined animal systems, animals of different ages can be separated
and raised apart in “all-in, all-out” systems. With the growing and finishing of animals and birds in a facility
in phased groups, livestock production becomes similar to production of industrial goods where workers have
the opportunity to specialize in a particular phase of production. (P. 4)
41. Timber is another agricultural product whose organization relies on factory-corporate form rather than the
family firm. Large corporations own commercial timberland, and timber production is accordingly undertaken
by highly specialized wage employees of these corporations. These firms typically extend from planning and
harvesting through processing and marketing to retail outlets, so there are, for example, tree planting crews,
timber thinning crews, timber harvesting crews, truck drivers, as well as specialized employees who work inside
processing facilities. Again, the nature-driven incentives explain the organizational form. Trees have long lives that
are not affected by seasons in the way grains and other crops are. Trees can be planted, husbanded, and harvested