North America, specialization occurred largely because of economies of scale, larger economic forces and technologi­cal change. When economies of scale (the unit cost decreases with size) prevails over economies of scope (synergies be­tween products and by-products), specialization increases which is followed by an increased size in production units. This leads to regional specialization and concentration. Gov­ernment policies may also influence farm size and numbers. Agricultural policies after World War II directly promoted specialization through incentives (e.g., Pirog et al., 2001; for a fuller discussion of policies see 2.2). Yet larger trends have usually overshadowed the impact of policy programs on farm structure.
     Farm specialization is particularly pronounced in North America (see Table 2-1) and in central and eastern Euro­pean areas that experienced collectivization. Specialization differs by farm size with smaller farms the most likely to produce one commodity (Cash, 2002) (Figure 2-2). The av­erage number of commodities produced per farm has fallen from 4.6 in 1945 to 1.3 in 2002 (Dimitri and Effland, 2005) even though financially successful farms have tended to be more diversified (Hoppe, 2001). Farms in the United States now have a bimodal distribution, with the number of farms in the middle declining (Kirschenmann et al., 2003). More than 25% of very large family farms are specialized in hog

Table 2-1. 100 years of structural change in U.S. agriculture. Source: Dimitri and Effland, 2005.

Source: Dimitri and Effland, 2005.