Energy Efficiency Outlook of New Zealand Dairy Farming Systems: An Application of Data Envelopment Analysis (DEA) Approach

Abstract

This study evaluates energy efficiency of pastoral (PDFs) and barn (BDFs) dairy farming systems in New Zealand through application of data envelopment analysis (DEA) approach. Two models constant return to scale (CCR) and variable return to scale (BCC) of DEA were employed for determining the technical (TE), pure technical (PTE) and scale (SE) efficiencies of New Zealand pastoral and barn dairy systems. Further, benchmarking was also performed to separate efficient and inefficient dairy farms and energy saving potential was identified for both dairy systems based upon their optimal energy consumption. For this study, the energy inputs data were taken from 50 dairy farms (including PDFs and BDFs) across Canterbury, New Zealand. The results indicated that the average technical, pure technical and scale efficiencies of pastoral (PDFs) dairy systems were 0.84, 0.90, 0.93 and for barn (BDFs) systems were 0.78, 0.84, 0.92, respectively, showing that energy efficiency is slightly better in PDFs system than the BDFs. From the total number of dairy farms 40% and 48% were efficient based on the constant return to scale and variable return to scale models, respectively. Further, the energy saving potential for PDFs and BDFs dairy systems through optimal energy consumption were identified as 23% and 35%, respectively. Thus, energy auditing, use of renewable energy and precision agricultural technology were recommended for energy efficiency improvement in both dairy systems.