Economic analysis of specialized dairy farms in Croatia according to FADN

Abstract

The Farm Accountancy Data Network (FADN) enables analysis and comparison of farms business data, and the dairy sector has been selected because of its great importance in the European Union (EU). This paper analyses the economic characteristics of Croatian dairy farms divided into three types (based on herd size), in the period from the year 2014 to 2018. While the number of smaller farms is declining, there is a slight increase in the largest farm type. The amount of milk produced per farm is also growing, but it is still significantly lower than the European average. According to the realized net value added per unit of labour, small and medium-sized dairy farms are below, while large ones are above the European average. The share of direct payments in net value added is higher for all farm types compared to the European average. Relatively low milk yield and selling price, with high operating costs results in lower net production margins and affects the lower competitiveness of smaller farms with lower yields. According to the results of the FADN analysis, the largest Croatian dairy farms Type 3 (with 50 or more cows in the herd) are fully competitive to European farms in terms of economic results. The problem of Croatian dairy farming is that there are only few competitive farms, so different agricultural and rural development measures should support the empowerment of smaller farms, as well as strengthen the competitiveness of the whole dairy sector.