PR - IMPACT OF FEEDING SYSTEMS ON THE PROFIT AND EFFICIENCY OF NEW ZEALAND DAIRY FARMS

Abstract:
This study utilizes a production function based approach using data on milk solids, farm working expenses, labour, farm area total dairy-based assets to measure and compare the efficiency of profitability measured as returns on dairy assets of sharemilkers and owner-operators in New Zealand. A second function to measure inefficiency and the sources of inefficiency included year, feeding system, region, and other variables. The results show that on average owner operators were reasonably “efficient” with an average efficiency of 70% however average sharemilker efficiency was only 55%. Feeding system and time were major influences on efficiency for owner operators but not for sharemilkers, where the number of cows and time were the major factors influencing efficiency.
Keywords: seasonal production, pasture, efficiency, stochastic frontier, New Zealand.