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Pasture-Based versus Conventional Milk Production: Where Is the Profit?

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  • Gillespie, Jeffrey
  • Nehring, Richard

Abstract

Costs and returns of pasture-based dairy production are compared with those of conventional production using matching samples. Both whole-farm and dairy enterprise-level estimates are made using the U.S. Department of Agriculture’s Agricultural Resource Management Survey data. Conventional farms are matched to pasture-based farms on the basis of operation scale, scope, region, and farmer demographics and adoption of technology. Results show for pasture-based production lower net farm income on per-cow, per-hundredweight milk produced, and total bases. On an enterprise basis, results show for pasture-based production, higher net return over operating cost and lower net return over total cost per hundredweight milk produced.

Suggested Citation

  • Gillespie, Jeffrey & Nehring, Richard, 2014. "Pasture-Based versus Conventional Milk Production: Where Is the Profit?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(4), pages 1-15, November.
    • Handle: RePEc:ags:joaaec:189084
    DOI: 10.22004/ag.econ.189084
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    1. Loren W. Tauer, 2009. "Estimation of Treatment Effects of Recombinant Bovine Somatotropin Using Matching Samples," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(3), pages 411-423, September.
    2. Gillespie, Jeffrey & Nehring, Richard, 2013. "Comparing economic performance of organic and conventional U.S. beef farms using matching samples," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 1-15.
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    5. Tauer, Loren W. & Mishra, Ashok K., 2006. "Can the small dairy farm remain competitive in US agriculture?," Food Policy, Elsevier, vol. 31(5), pages 458-468, October.
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    7. Carlos D. Mayen & Joseph V. Balagtas & Corinne E. Alexander, 2010. "Technology Adoption and Technical Efficiency: Organic and Conventional Dairy Farms in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 181-195.
    8. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
    9. Gillespie, Jeffrey M. & Nehring, Richard F. & Hallahan, Charles B. & Sandretto, Carmen L., 2009. "Pasture-Based Dairy Systems: Who Are the Producers and Are Their Operations More Profitable than Conventional Dairies?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-16, December.
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    1. Jonathan Walsh & Robert Parsons & Qingbin Wang & David Conner, 2020. "What Makes an Organic Dairy Farm Profitable in the United States? Evidence from 10 Years of Farm Level Data in Vermont," Agriculture, MDPI, vol. 10(1), pages 1-13, January.
    2. Allison, John & Burdine, Kenneth H. & Dillon, Carl & Smith, S. Ray & Butler, David M. & Bates, Gary E. & Pighetti, Gina M., 2021. "Optimal forage and supplement balance for organic dairy farms in the Southeastern United States," Agricultural Systems, Elsevier, vol. 189(C).
    3. Nehring, Richard & Gillespie, Jeffrey M., 2020. "The Economics and Productivity of U.S. Cow-Calf Production," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304363, Agricultural and Applied Economics Association.
    4. Qushim, Berdikul & Gillespie, Jeffrey, 2016. "Women Farm Operators in the U.S. Meat Goat Production: Who is More Productive?," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230004, Southern Agricultural Economics Association.
    5. repec:ags:aaea22:335490 is not listed on IDEAS
    6. Nehring, Richard & Gillespie, Jeffrey & Erickson, Kenneth & Harris, J. Michael & Heutte, Silke & Sauer, Johannes, 2018. "Small U.S. Dairy Farms: Can They Compete? A Revisit," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266535, Southern Agricultural Economics Association.
    7. Nehring, Richard & Sauer, Johannes & Gillespie, Jeffrey & Hallahan, Charlie, 2016. "United States and European Union Dairy Farms: Where Is the Competitive Edge?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(B), pages 1-22, August.

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    More about this item

    Keywords

    Agribusiness;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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