Determinants of technical efficiency among dairy farms in Wisconsin

The US dairy sector is facing structural changes including a geographical shift in dairy production and a tendency toward the implementation of more intensive production systems. These changes might significantly affect farm efficiency, profitability, and the long-term economic sustainability of the...

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Bibliographic Details
Published in:Journal of dairy science 2010-01, Vol.93 (1), p.387-393
Main Authors: Cabrera, V.E., Solís, D., del Corral, J.
Format: Article
Language:English
Subjects:
Animal productions
Animals
Biological and medical sciences
Cattle
cow feeding
dairy cattle
dairy farm management
dairy farming
dairy industry
Dairying - economics
Dairying - methods
economic analysis
farm families
farm labor
feed rations
Food industries
Fundamental and applied biological sciences. Psychology
geographical distribution
intensification
intensive livestock farming
lactation
Likelihood Functions
Milk and cheese industries. Ice creams
milk yield
milking frequency
profitability
simulation models
somatotropin
stochastic production frontier
sustained yield management
technical efficiency
technical inefficiency
Terrestrial animal productions
total mixed rations
Vertebrates
Wisconsin
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Summary:The US dairy sector is facing structural changes including a geographical shift in dairy production and a tendency toward the implementation of more intensive production systems. These changes might significantly affect farm efficiency, profitability, and the long-term economic sustainability of the dairy sector, especially in more traditional dairy production areas. Consequently, the goal of this study was to examine the effect of practices commonly used by dairy farmers and the effect of intensification on the performance of the farms. We used a sample of 273 Wisconsin dairy farms to estimate a stochastic production frontier simultaneously with a technical inefficiency model. The empirical analysis showed that at a commercial level the administration of bovine somatotropin hormone to lactating cows increased milk production. In addition, we found that production exhibits constant returns to scale and that farm efficiency is positively related to farm intensification, the level of contribution of family labor in the farm activities, the use of a total mixed ration feeding system, and milking frequency.
ISSN:0022-0302
1525-3198
DOI:10.3168/jds.2009-2307