Technological frontier in Uruguay's beef cattle production: An analysis of technical efficiency and its main drivers

Abstract

AbstractGlobally, livestock grazing is a major land occupier and is often criticized for its environmental impact. To address these concerns, enhancing livestock productivity is crucial to mitigate these impacts, boost farm competitiveness, and increase food production. The understanding of production variability is key to this endeavor. This paper assesses the technical efficiency of cow‐calf beef production units in Uruguay, excluding dairy and feedlot operations. Using data from the 2016 National Livestock Survey and Wang's frontier model, we estimate a translog stochastic production frontier, incorporating bovine livestock units, land area, and equivalent working units as key inputs. This model also controls soil productivity, improved grazing areas, productive orientation (beef‐cattle systems or beef cattle‐ovine mixed systems), beef production system (cow‐calf, full cycle, and fattening operation), access to electric power, and agroecological regions. Furthermore, it explores factors affecting technical inefficiency, such as ownership (individual, corporate without contract, and corporate with contract) and land tenure types (owner, tenant, or other types), besides the presence of third‐party owned cattle, technical assistance (including veterinarian and agronomic), and specific beef cattle technologies (such as continuous bull presence, artificial insemination, ovarian activity diagnosis, pregnancy diagnosis, use of scales for classifying females, temporary and early weaning, and cows and heifers grazing together). Findings indicate an average technical efficiency of 71.3%. Notably, factors such as agronomic and veterinary assistance, artificial insemination, weaning practices, third‐party‐owned cattle presence, pregnancy diagnosis, land tenure, and ownership type significantly impact technical efficiency. Our findings suggest that within the specific segment of cow‐calf operations in Uruguay, there is a potential to enhance beef production by 40.2% through improvements in farm management. [EconLit Citations: Q12, D24].