Enhancing productivity on suburban dairy farms in China

Dairy farms in China's suburban areas have been playing an important role in providing urban markets with fresh milk. With the rising demand for fluid milk and dairy products in the cities, there is a perception that small and scattered dairy farms in China's provinces are gradually disappearing and more concentrated dairy cattle farming is being formed near suburban areas. This article uses farm‐level survey data and stochastic input distance functions to make estimates of total factor productivity (TFP) on suburban dairy farms, as well as for the entire dairy sector. The results show that over the past decade TFP growth has been positive on suburban dairy farms, and this rise in productivity has been driven mostly by technological change. However, at the same time we find that, on average, the same farms have been falling behind the advancing technical frontier. We also find one of the drivers of the suburban dairy sector is the relatively robust rate of technological change of these farms, which has been more rapid than on farms in the dairy sector as a whole. The results suggest that efforts to achieve greater adoption of new technologies and better advice on how to use the technologies and manage production and marketing within the suburban dairy sector will further advance productivity growth in the sector.     

Scale Economies,Technical Efficiency,and the Sources of Total Factor Productivity Growth of Quebec Dairy Farms

Canada's average cost for milk production is among the highest in the world. This paper focuses on specific potential causes by estimating economies of scale and technical efficiency for a panel of Quebec dairy farms that spans the 2001–10 period. Additionally, this paper investigates the sources of total factor productivity growth. The stochastic frontier analysis, based on an input‐distance function, is used to estimate returns to scale relationships across dairy farms. The results show that there is significant economies scale to be exploited and that cost of production could also be reduced by improving technical efficiency. Accordingly, the paper indicates that input‐mix effect is the main source of total factor productivity growth. The results have important implications for Canada's supply management policy, and more specifically for the trading of production quota between dairy farmers, as well as for the delivery of targeted extension services.     

Technology Adoption and Its Impact on Production Performance of Dairy Operations

Data from the 1993 Agricultural Resource Management Study were used to examine the impact of technology adoption on production performance of a sample of dairy farms. Findings showed that the adoption of a capital- or a management-intense technology would measurably lower the likelihood of a farmer being in the lowest quartile of production performance. The economic costs of milk production by the top-performance group were estimated to be 53% lower than those by the low-performance group, providing evidence of the importance of improved production practices to the viability of many dairy operations.     

联合体内部互动对家庭农场价值共创意愿的影响研究基于安徽省农业产业化联合体的实证分析

[目的]作为农业产业化联合体的基础,家庭农场的价值共创意愿对各利益相关主体实现深度融合、共赢发展至关重要。[方法]文章运用有调节的中介效应模型,基于安徽省农业产业化联合体中的284个家庭农场调查数据,实证分析了联合体内部互动对家庭农场参与价值共创意愿的影响及其作用机制,探讨了利益分配合理程度的中介效应以及合作社服务能力的调节效应。[结果]（1）资源互动、生产互动和约束互动均对家庭农场的价值共创意愿具有显著的正向促进作用;（2）利益分配合理程度在资源互动、生产互动和约束互动对家庭农场的价值共创意愿的影响过程中均发挥中介效应;（3）合作社服务能力在利益分配合理程度对家庭农场的价值共创意愿的影响过程中不具有显著的调节作用。[结论]联合体内部互动能够有效提高家庭农场参与价值共创的意愿,并且通过互动,可以提高联合体内部利益分配的合理程度,进而对家庭农场的价值共创意愿产生显著的正向影响。     

Agricultural Policies and Structural Change in French Dairy Farms: A Nonstationary Markov Model

The aim of this paper is to gain an understanding into how agricultural policies have affected structural change in the French dairy sector. A nonstationary Markov model is estimated using a Generalized Cross Entropy approach. Results show that while the price of cow's milk encourages farm growth, direct payments and quota restriction favor small farms. The price signal is a key factor of structural change. As a result, higher milk prices may accelerate the trend toward the further growth of dairy farms. Settlement policy and technical change seem not to slow this trend.     

Credit constraints and smallholder dairy production in the East African highlands: application of a switching regression model

Accurate assessment of farmers' credit constraint condition is important in order to understand the circumstances under which credit would have its greatest impact. In this study a switching regression model was used to determine the impact of credit on smallholder dairy farms in the East African highlands using farm level data from Ethiopia and Kenya. Farmers were classified as credit constrained or credit non-constrained based on their responses from the farm level surveys. No consistent relationship was found between farmers' credit constraint condition and their borrowing status. Most of the variation in milk output per farm was explained by the number of crossbred milking cows in the dairy herd. As credit is likely to facilitate investment in crossbred dairy cows it will have substantial impacts on smallholder dairy farms especially if it is targeted to credit constrained farms.     

PRODUCTION CHOICE IN THE ENGLAND AND WALES DAIRY SECTOR

This paper seeks to develop the understanding of the ways in which factors other than price influence the production decisions of dairy farmers. A theoretical model based on a profit function is used to emphasise the way in which changes in the farm's technological environment will influence its production choices. The theoretical model is used as the basis of an empirical study of production choice in the England and Wales dairy sector. Elasticities and factor biases are reported.     

The influence of weather conditions on dairy production

Relatively little attention has been paid in the economics literature to the effects of meteorological conditions on milk production. Meteorological variables can be expected to affect milk production through their impact on the productivity of cows and the production of foodstuff. Rather than including meteorological variables as inputs in the milk production process, we propose a production function where these variables affect the productivity of cows and the production of forage, thereby indirectly affecting milk production. Using production and meteorological data from the Spanish region of Asturias corresponding to 383 dairy farms observed during a six‐year period from 2006 to 2011, the results from our estimated production function show that meteorological variables have a significant impact on milk production. We find that milk production is higher under warm weather conditions due to improvements in forage production.     

Reducing greenhouse gas emissions from agriculture: Avoiding trivial solutions to a global problem

Three steps are required to successfully and efficiently reduce greenhouse gas (GHG) emissions from agriculture: (i) identification of the most GHG polluting farms, (ii) determining appropriate mitigation options for these farms, and (iii) selection between these options on the basis of their cost effectiveness. Carbon footprints of a sample of farms together with an analysis of the Kyoto Protocol show the difficulties encountered at each step. These difficulties are caused by: (i) failure to agree which functional unit to use to measure GHG emissions and pollution swapping; (ii) weaknesses in the Kyoto Protocol's territorial/production based accounting methodology, and (iii) lack of cost-effectiveness data. One consequence is that farmers may adopt mitigation activities that reduce their farm's, the UK agriculture sector's and the UK's emissions whilst inadvertently increasing global emissions: a trivial solution because it fails to address GHG emissions as a global problem. These difficulties, together with estimated agriculture sector marginal abatement cost curves that suggests emission reduction from all cost effective mitigation activities will not deliver targeted GHG emission reductions, means policy focus must be on demand rather than supply-side measures: the benefits and disadvantages of cap and trade mechanisms and carbon taxes are briefly discussed within an agricultural context.     

Droughts and farms’ financial performance: a farm‐level study in New Zealand

We quantify the impacts of droughts in New Zealand on the profitability of dairy, sheep and beef farms using a comprehensive administrative database of all farms in New Zealand. For dairy farms, we found that drought events have positive impacts on dairy farms’ revenue and profit in the year of the drought. This effect is most likely attributable to drought‐induced increases in the export price of milk solids, as New Zealand is the market maker in this global market and almost all domestic dairy production is exported. All of these quantified impacts, however, are not very large, suggesting that, at this point in time, droughts have a fairly moderate impact on New Zealand dairy and sheep–beef businesses.     

Deregulation reforms,resource reallocation and aggregate productivity growth in the Australian dairy industry

Deregulation reforms in the Australian dairy industry had long‐lasting repercussions for Australian agriculture and the wider Australian economy. Using farm‐level data from 1979 to 2013, we investigate the effect of these reforms on productivity in the Australian dairy industry which arose from correcting resource misallocation between farms and across segregated state milk markets. Our results demonstrate that after the dairy reforms in 2000, relative market share shifted from less productive farms to more productive ones, and between farms using different production systems – generating additional productivity gains for the farm sector, but imposing some costs on downstream manufacturers by strengthening the seasonality of milk supply. Lessons from the Australian experience provide timely guidance for those countries exploring deregulation now or in the future to improve the industry‐level agricultural productivity growth through facilitating resource reallocation from less efficient to more efficient farms.     

Small U.S. dairy farms: can they compete?

The U.S. dairy industry is undergoing rapid structural change, evolving from a structure including many small farmers in the Upper Midwest and Northeast to one that includes very large farms in new production regions. Small farms are struggling to retain competitiveness via improved management and low‐input systems. Using data from USDA's Agricultural Resource Management Survey, we determine the extent of U.S. conventional and pasture‐based milk production during 2003–2007, and estimate net returns, scale efficiency, and technical efficiency associated with the systems across different operation sizes. We compare the financial performance of small conventional and pasture‐based producers with one another and with large‐scale producers. A stochastic production frontier is used to analyze performance over the period for conventional and pasture technologies identified using a binomial logit model. Large conventional farms generally outperformed smaller farms using most economic measures—technical efficiency, various profitability measures, and returns to scale.     

Internal and contextual drivers of dairy restructuring: evidence from French mountainous areas and post‐quota prospects

The end of the milk quota system in Europe has resulted in substantial structural changes to the dairy industry, calling its future into question, especially in mountainous areas. This study analyzes the internal and contextual factors that influence dairy restructuring in French mountainous areas. Three complementary logit models are used to specify farmer decisions (e.g., dairy production exit, stability, and growth). Original and exhaustive geo‐located administrative datasets are combined to create a farm longitudinal dataset and characterize farm‐restructuring patterns on a fine geographical scale. Farm size, corporate legal status, and specialization are positively associated with farm growth. Viable diversification strategies through either farm processing or agro‐environmental scheme contracting are also highlighted. Farm sustainability is supported by the economic success of the local industry and the propensity to adopt extensive practices. With respect to public policy, dairy policy appears to have the strongest impact. Thus, the liberalization of dairy policy threatens the future of dairy farming, particularly in areas with low milk density and no production under labels. This work calls for a policy that promotes the collective dimension of dairy farm performance. The current rural development policy alone may be insufficient to support farms’ long‐term sustainability.     

Dairy sheep farms in semi-arid rangelands: A carbon footprint dilemma between intensification and land-based grazing

In recent decades there have been significant changes in land use and production orientation in certain marginal agricultural areas in the southwest of Spain. The abandonment of rainfed cereal crops and their change of use as natural pastures grazed by milk sheep, have led to an improvement in the profitability of the farms, greater industrialisation and a positive impact on rural development.This paper calculates the carbon footprint (CF) of farms in the context of life cycle assessment with the objective to identify the system that accounts for the lowest CF while maintaining adequate levels of profitability and revitalising the rural environment. The data were obtained through surveys carried out on dairy sheep farms of different typologies, ranging from the semi-intensive farms with small grazing areas, to the extensive farms with large areas of natural pastures. Findings could help farmers evaluate the environmental impact of their activities, while at the same time provide consumers with valuable evidence to be used in further marketing actions.Greenhouse gas emissions vary from 1.77 to 4.09 Kg CO₂eq/kg of milk, where the lowest values correspond to the most intensive farms and the highest values to the most extensive and least productive farms. Enteric fermentation, followed by feeding, are the emissions with the greatest impact. Enteric fermentation reaches its maximum value (52.22 % of the total emissions) in the most extensive farms.On other hand, this study found that carbon sequestration varies between 0.09 and 2.04 kg of CO₂eq/kg of milk, a figure that can considerably reduce the carbon footprint calculation and justifies its inclusion in the Life Cycle Assessment.     

Technical efficiency,herd size,and exit intentions in U.S. dairy farms

The U.S. dairy industry has seen major restructuring in recent decades. A sharp decline in the number of U.S. dairy farms and an increase in average herd sizes have accompanied exits, which have been concentrated among smaller herds. Given that more productive farms are better positioned to increase operation size and to continue operation, we hypothesize that the more technically efficient farms are better able to expand and also have stronger incentives to continue production. Using data from the USDA's 2010 ARMS Phase III, Dairy Production Practices and Costs and Returns Report, we estimate technical efficiency using stochastic production frontier analysis with endogenous inputs. The efficiency estimate is then incorporated into the analysis of exit intention and herd size. The results confirm our hypotheses that smaller and less efficient farms are more likely to exit and that more efficient dairy farms tend to expand herd size. Moreover, farms without successors but with older and more educated operators are more likely to exit.     

Markups,organic agriculture and downstream concentration at the example of European dairy farmers

A competitive environment, highly concentrated processing and retailing sectors as well as increasing decoupling of direct payments from production volumes and the area under cultivation incentivizes farmers to find alternative ways to improve their bargaining position towards downstream companies. This article explores the possibilities of organic agriculture to enhance the bargaining power of farmers along with the role of concentration in downstream industries. Using a dataset with more than 200,000 observations from approximately 40,000 dairy farms, I estimate markups of price over marginal cost in dairy farming as a measure of market power in the EU. The results show that organic farmers achieve a significant markup premium over conventional farmers. With increasing market shares of organic milk in total milk production markups of conventional farmers diminish whereas those of organic farmers are unaffected. Farm-level markups decrease with increasing market shares of medium-sized dairy processors and increase with increasing market shares of large processors. The presence of large multinational retail chains shows an adverse impact on farmers’ markups.     

Tracing the evolution of the aggregate U.S. milk supply elasticity using a herd dynamics model

The U.S. dairy sector is characterized by increasing volatility of milk prices, and consolidation in production as evidenced by declining number of dairy farms with an increasingly larger share of milk supplied from a small number of very large farms. Using aggregate national data, we build a mixed‐frequency herd dynamics econometric model of the U.S. milk supply that updates and substantially amends the model first proposed by Chavas and Klemme. We implement a dynamic residual‐based bootstrap technique that can be used in testing for changes in nonmarginal simulated long‐run supply responsiveness, and trace the evolution of long‐run milk supply elasticity from 1975 through 2010. Several papers in the past have suggested that long‐run supply elasticity increases with dairy farm size, which implies that increased importance of large farms would increase aggregate long‐run supply responsiveness. Contrary to this conclusion, we find a declining trend in long‐run supply elasticity from 1975 through 2005. Persistence of such a decline would be a major cause for worry, as ever larger price swings would be needed to equilibrate the market in face of demand shocks. However, we find that milk supply is becoming more responsive since 2005 both to milk and feed price changes. Increasing responsiveness to feed prices further justifies focusing the next generation of the dairy policy instruments on managing dairy profit margins rather than just revenue streams.     

Impact of de-coupling agricultural support on dairy investment and milk production volume in Finland

This study analyses the impacts of de-coupling of agricultural support from production in Finland. A dynamic agricultural sector model, which includes 17 production regions and endogenous investments and technical change, is used in the analysis. Investment in different production techniques is dependent on the relative profitability and the spread of each technique in the population of heterogeneous farms. There are relatively few large farms which use efficient production techniques in Finland. De-coupling weakens the incentive for investment in dairy production and causes a temporary but significant slow down in dairy investments and technical change. Consequently, de-coupling is likely to result in a significant drop in milk and beef production in the next 10-20 year period if no corrective measures are taken in agricultural policy in less-favoured areas such as Finland. However, a slow recovery of investment and output levels are expected in the long run.     

The factors influencing the profitability of leased land on dairy farms in Ireland

The Republic of Ireland possesses a land market that is constrained by minimal sales each year, less than 1%. In an effort to capitalise on milk quota abolition and to increase dairy production, a suite of tax incentives has recently been introduced in the Republic of Ireland to encourage land mobility and long-term leasing among Irish dairy farmers. Using Irish Farm Accountancy Database Network (FADN) data from 2011–2017 to examine this, a Heckman sample selection model explores two aspects; (i) the factors that influence a farmer’s decision to rent, or continue renting, land and (ii) the profitability of dairy farmers renting in land. We find self-selection into the rental market is driven by farm traits that include a high level of hired labour, the presence of a successor, intensive farming practices and dairy discussion group membership. The results show that rental agreements assist farms in achieving economies of scale. The findings provide evidence to support government intervention such as tax incentives for renting out land and knowledge sharing discussion groups.     

Nitrogen Management for Profitable Farming with Minimal Environmental Impact: The Challenge for Mixed Farms in the Cotswold Hills,England

A detailed nitrogen (N) budget was constructed for a mixed farm in the Cotswold Hills, England, situated on thin, well drained soils prone to leaching. The study covered all stages of the farm's seven-year rotation and included the removal of the dairy herd. All inputs and outputs of N were measured or estimated and a balanced budget achieved, but only by including relatively expensive measurements of soluble organic nitrogen (SON) leached. Leaching was the main loss process. Given the nature of the soil and the influence of the weather, it would be difficult to reduce losses without drastic reductions in fertiliser inputs or stocking rates. Nitrogen use efficiency averaged 46%. The mean N surplus declined from 141 kg N ha^?1 to 117 kg N ha^?1 with the removal of the dairy herd. However, the farm to which the herd moved had an N surplus of 392 kg N ha^?1. Simple farm gate N budgets were constructed for neighbouring Cotswold farms to encourage farmers to consider ways to improve N use. Implications for policy to reduce losses of N while maintaining farm profitability are discussed.