Evolution of the Structure and Economic Management of the Dairy Cow Sector

Abstract

In this paper, we examine the changes in the structural, economic and managerial characteristics of dairy cow farms during their shift towards a new business model that operates under a highly intensified system. Based on farm accounting data from Greek dairy farms for the 2004–2017 period, the main technical and financial indicators are estimated and compared to provide a clear picture of the structural adjustment of the dairy cow sector during the last two decades. The outcomes and the implications described herein are relevant for specialized dairy farms in most European countries. The results indicate that modern farms breed a larger number of cows, achieve a higher milk yield, rely on high compound feed intakes and operate under an intensive pattern. This trend is even more evident in larger farms with an entrepreneurial nature, whose structural adjustments occurred in a more concise and effective manner. The latter benefited from a downward shift in their long-term average cost curves and the resulting economies of scale, achieving reasonable gross margins despite the ever-increasing feeding costs. Nowadays, the European dairy cow sector faces major economic, social and environmental challenges that must be properly addressed to secure its survival. The findings of this study provide insights concerning the efficient financial management of dairy farms that can support the development of strategies and policy recommendations that will enhance the resilience and sustainability of the sector.