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Efficiency Measurement of Australian Dairy Farms: National and Regional Performance

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  • Fraser, Iain
  • Graham, Mary

Abstract

In this paper we use Data Envelopment Analysis (DEA) to estimate technical efficiency for a sample of 1742 Australian dairy farms. Bearing in mind data limitations we find that average technical efficiency is 59 per cent, but there are significant regional differences. These results reflect differences in State level milk marketing arrangements in place before dairy deregulation in July 2000 providing an ex post explanation for the changing composition of dairy farms in Australia. We also examine two important technical aspects of DEA implementation. First, how changes in model input specification alter the relative performance of farms. Second, we employ a simple bootstrap procedure to show how changes in sample size affects estimates of technical efficiency. These results have simple but important implications for the use of DEA as an industry-benchmarking tool.

Suggested Citation

  • Fraser, Iain & Graham, Mary, 2005. "Efficiency Measurement of Australian Dairy Farms: National and Regional Performance," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 13.
    • Handle: RePEc:ags:auagre:126400
    DOI: 10.22004/ag.econ.126400
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    References listed on IDEAS

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    8. Geoff Edwards, 2003. "The story of deregulation in the dairy industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(1), pages 75-98, March.
    9. Jaforullah, Mohammad & Whiteman, John, 1999. "Scale efficiency in the New Zealand dairy industry: a non-parametric approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(4), pages 1-19, December.
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    11. Alfons Weersink & Calum G. Turvey & Abdulahi Godah, 1990. "Decomposition Measures of Technical Efficiency for Ontario Dairy Farms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 38(3), pages 439-456, November.
    12. L. Martin Cloutier & Robin Rowley, 1993. "Relative Technical Efficiency: Data Envelopment Analysis and Quebec's Dairy Farms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(2), pages 169-176, July.
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    Cited by:

    1. Robert G. Chambers & Atakelty Hailu & John Quiggin, 2011. "Event‐specific data envelopment models and efficiency analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(1), pages 90-106, January.
    2. Watson, Alistair S., 2005. "Productivity and the Dairy Industry," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 13.
    3. Theodoros Skevas & Teresa Serra, 2016. "The role of pest pressure in technical and environmental inefficiency analysis of Dutch arable farms: an event-specific data envelopment approach," Journal of Productivity Analysis, Springer, vol. 46(2), pages 139-153, December.
    4. Paul Rouse & Julie Harrison & Li Chen, 2010. "Data Envelopment Analysis: A Practical Tool to Measure Performance," Australian Accounting Review, CPA Australia, vol. 20(2), pages 165-177, June.
    5. Wanglin Ma & Kathryn Bicknell & Alan Renwick, 2019. "Feed use intensification and technical efficiency of dairy farms in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(1), pages 20-38, January.
    6. Piotr Borawski & Beata Kalinowska & Bartosz Mickiewicz & Andrzej Parzonko & Bogdan Klepacki & James Willam Dunn, 2021. "Changes in the Milk Market in the United States on the Background of the European Union and the World," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1010-1033.
    7. Kelvin Balcombe & Hristos Doucouliagos & Iain Fraser, 2007. "Input usage, output mix and industry deregulation: an analysis of the Australian dairy manufacturing industry ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), pages 137-156, June.
    8. Tao Zhang, 2007. "Part-time farming: off-farm and on-farm household efficiency measurement of Ireland farm households," Working Papers 0705, Rural Economy and Development Programme,Teagasc.
    9. Graham, Mary, 2008. "Biophysical Modelling and Performance Measurement," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6773, Australian Agricultural and Resource Economics Society.

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