Abstract
In dairy farms, the feeding cost, which includes the expenses for purchased feed but also the expenses for feed production, constitutes a very large part of production cost (more than 60%), which indicates the economic importance of the feeding strategy. This study discerns three different feeding strategies: landless farms only purchasing feed from markets (“Purchasing”), farms for which home-grown feeds stand for more than 10% of feeding costs (“Producing”) and farms with less than 10% home-grown feeds (“Multi-purpose”). Based on technical and economic data from 47 dairy cow farms in Greece, alternative scenarios of development of the dairy sector are determined taking into account the dependence on on-farm feed production. Through a parametric programming model, the study provides insights regarding the optimal structure of the system under different scenarios (changing availability of variable capital, changes in milk prices). The results indicate that “Purchasing” farms are the preferred option when variable capital is abundant and milk prices are satisfactory, while “Producing” are the ones surviving with milk prices significantly lower than the actual ones in Greece and European Union. “Multi-purpose” farms perform worse than the other two and are sidelined in both scenarios, as they do not seem to be able to specialize in the dairy enterprise or in crop production and thus to minimize costs.
Highlights
357 Labor Unit (LU) respectively), there was an important change in the contribution of hired labor, from only 177 LU (49% of total labor) in the existing situation to 208 LU in the optimized situation (58%)
This study presented an analysis of potential future trajectories of Greek dairy farms, which were discerned to three types based on the degree of reliance on markets for procurement of feeds
Three scenarios were tested by means of linear and parametric programming, illustrating how the sector would respond under changing availability of variable capital or under reduced milk prices
Summary
The development of effective feeding strategies is one of the main concerns for dairy farms worldwide as feeding is the main factor affecting milk yield and quality [1,2,3,4]. Feeding costs have been reported as the major cost driver in dairy farms, from the USA [3] to the European Union (EU) [5], while in Greece, they account for more than 55% of total costs [6,7]. The empirical analysis in this paper is based onon Linear. ParametThe empirical analysis in this paper is based. Metric Programming (PP), which are non-parametric methods of mathematical programIn particular, LP is aLP mathematical procedure for optimum resource allocation, which ming. Is a mathematical procedure for optimum resource allocation, maximizes or minimizes a linear objective function subject to linear constraints [27,28,29,30]
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