Technological Change in Dairy Farming with Increased Price Volatility

Frick, Fabian; Sauer, Johannes

doi:10.1111/1477-9552.12417

Cited by 7 publications

(5 citation statements)

References 50 publications

(75 reference statements)

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“…Human labor used for animal treatments and feed production was reduced by 22.6% from 2004 to the 2017 period from 119 to 92 h/cow (Table 4). The reduction was smaller for the large farms (5.2%), verifying that the larger farms valorized the economies of scale and invested in labor-saving technologies [33]. Analytical data were available for the labor provided from family members and hired workers for the 2017 farms.…”

Section: Resultsmentioning

confidence: 90%

Evolution of the Structure and Economic Management of the Dairy Cow Sector

Koutouzidou¹,

Ragkos²,

Melfou

2022

Sustainability

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In this paper, we examine the changes in the structural, economic and managerial characteristics of dairy cow farms during their shift towards a new business model that operates under a highly intensified system. Based on farm accounting data from Greek dairy farms for the 2004–2017 period, the main technical and financial indicators are estimated and compared to provide a clear picture of the structural adjustment of the dairy cow sector during the last two decades. The outcomes and the implications described herein are relevant for specialized dairy farms in most European countries. The results indicate that modern farms breed a larger number of cows, achieve a higher milk yield, rely on high compound feed intakes and operate under an intensive pattern. This trend is even more evident in larger farms with an entrepreneurial nature, whose structural adjustments occurred in a more concise and effective manner. The latter benefited from a downward shift in their long-term average cost curves and the resulting economies of scale, achieving reasonable gross margins despite the ever-increasing feeding costs. Nowadays, the European dairy cow sector faces major economic, social and environmental challenges that must be properly addressed to secure its survival. The findings of this study provide insights concerning the efficient financial management of dairy farms that can support the development of strategies and policy recommendations that will enhance the resilience and sustainability of the sector.

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Section: Resultsmentioning

confidence: 90%

Evolution of the Structure and Economic Management of the Dairy Cow Sector

Koutouzidou¹,

Ragkos²,

Melfou

2022

Sustainability

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“…The TTO translog cost function proposed by Stevenson [ 40 ] is employed for empirical investigation in this study. The TTO translog cost function has been used in multiple research papers [ 35 , 42 ], and there are at least 2 reasons for introducing it. First, in the standard translog specification, the second-order derivative of the cost function to prices or output is constant.…”

Section: Methodsmentioning

confidence: 99%

Green Total Factor Productivity and Its Saving Effect on the Green Factor in China’s Strategic Minerals Industry from 1998–2017

Jin

Wang

2022

IJERPH

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Improving green total factor productivity (GTFP) is a fundamental solution to help the strategic mineral industry to achieve green and sustainable development. This study incorporates the dual negative externalities of resource depletion and environmental pollution into the GTFP measurement to capture the ‘green’ elements. By employing a truncated third-order (TTO) translog cost function and the feasible generalized least squares (FGLS) approach, we evaluate the GTFP growth performance and its components in China’s strategic minerals industry from 1998 to 2017. Moreover, we explore the bias of technological progress toward the resource and environmental factors to grasp the green factor saving effects. The results show that: (1) during the sample period, the average GTFP growth rate of China’s strategic minerals industry was 0.46%, but there were variances between mineral sectors. Nevertheless, after 2012, the GTFP of all mineral sectors experienced different degrees of decrease. (2) The main driver of adjustments in GTFP growth shifted from technological progress to changes in scale efficiency, with technological progress contributing less to GTFP growth. This is particularly evident in the metal and energy minerals sectors. (3) Green technological progress is biased toward saving environmental factor input but enhancing resource extraction. Therefore, the current development of China’s strategic minerals industry falls into a non-sustainable mode of being environmentally friendly but not resource-saving.

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“…Farm investment plays a vital role in enhancing productivity in the agricultural sector. At the EU level, the implementation of labour-saving technologies has supported the expansion of herd sizes with declines in the total number of dairy farms as part of structural change (Frick and Sauer, 2021). An increase in income risk on dairy farms is documented in several European countries (Duden and Offermann, 2020;Trestini and Chinchio, 2018;Vrolijk and Poppe, 2020).…”

Section: Background Of Irish Dairy Sectormentioning

confidence: 99%

“…However, a common problem, which every country in EU is facing in terms of the dairy sector is milk price volatility. This increased price volatility further contributes to financial risk on dairy farms (Frick and Sauer, 2021). Under the Technology Acceptance Model (TAM), the adoption of risk management tools is determined by perceived usefulness and perceived ease of use (Michels et al, 2019).…”

Section: Background Of Irish Dairy Sectormentioning

confidence: 99%

Farm Investment and Adoption of Fixed Milk Price Contracts on Irish Dairy Farms

Pardeshi,

Loughrey,

O'Connor

2024

GER J AGR ECON

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After the milk quota removal in 2015, the Irish dairy industry has expanded dramatically. Various economic, social and environmental considerations are part of farmer’s choice to invest and to expand. This study evaluates selected factors contributing to recent dairy farmer’s investment decisions and examines the relationship between the adoption of Fixed Milk Price Contracts as a risk management tool and farm investments. This research applies the two-stage residual inclusion approach to address this research question using Teagasc NFS data from 2016 to 2021. This approach is applied to control for potential endogeneity including risk aversion. The results point to the economic relevance of the FMC adoption towards farm investment decisions although the magnitude of the association is limited. Subsidies play an important role in the investment decision although they are a small proportion in the overall specialised dairy farm income and provide a relatively stable source of income in Ireland. We finally conclude that, there is scope to improve the design of these FMCs in terms of protecting farmers from drastic margin volatility and to increase the adoption rate

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Technological Change in Dairy Farming with Increased Price Volatility

Cited by 7 publications

References 50 publications

Evolution of the Structure and Economic Management of the Dairy Cow Sector

Evolution of the Structure and Economic Management of the Dairy Cow Sector

Green Total Factor Productivity and Its Saving Effect on the Green Factor in China’s Strategic Minerals Industry from 1998–2017

Farm Investment and Adoption of Fixed Milk Price Contracts on Irish Dairy Farms

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