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Higher Intensity, Higher Profit? Empirical Evidence from Dairy Farming in New Zealand

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  • Wanglin Ma
  • Alan Renwick
  • Kathryn Bicknell

Abstract

Over the last two decades there have been significant and well‐documented changes in the nature and structure of New Zealand dairy production. One particular feature has been a marked shift in the ‘input intensity’ of dairy farming systems through increased use of supplementary feed. These changes have generated debate about the impact of dairy farm intensity on the performance of farm businesses and the competitiveness of the New Zealand dairy sector. Using a novel econometric approach, we assess statistically the impact of three types of dairy farming systems on milk production and financial performance, using farm business data provided by DairyBase®. Our empirical results show that higher input systems perform significantly better physically than lower input systems, but not financially. The disaggregated analysis suggests that the average treatment effects differ by region and performance quantiles.

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  • Wanglin Ma & Alan Renwick & Kathryn Bicknell, 2018. "Higher Intensity, Higher Profit? Empirical Evidence from Dairy Farming in New Zealand," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 739-755, September.
    • Handle: RePEc:bla:jageco:v:69:y:2018:i:3:p:739-755
    DOI: 10.1111/1477-9552.12261
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    References listed on IDEAS

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    Cited by:

    1. Zhou, Xiaoshi & Ma, Wanglin, 2021. "Effects of Agricultural Mechanization on Land Productivity: Evidence from China," 2021 Conference, August 17-31, 2021, Virtual 315143, International Association of Agricultural Economists.
    2. 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.
    3. Ma, Wanglin & Zhou, Xiaoshi & Boansi, David & Horlu, Godwin Seyram Agbemavor & Owusu, Victor, 2024. "Adoption and intensity of agricultural mechanization and their impact on non-farm employment of rural women," World Development, Elsevier, vol. 173(C).
    4. Robbie Maris & Zack Dorner, 2021. "Cost Efficiency Analysis using Operating Profit Margin for the New Zealand Dairy Industry," Working Papers in Economics 21/04, University of Waikato.
    5. Pardeshi, Shefali & Loughrey, Jason & O’Connor, Declan, 2024. "Farm Investment and Adoption of Fixed Milk Price Contracts on Irish Dairy Farms," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344291, International Association of Agricultural Economists (IAAE).
    6. Wanglin Ma & R. Quentin Grafton & Alan Renwick, 2020. "Smartphone use and income growth in rural China: empirical results and policy implications," Electronic Commerce Research, Springer, vol. 20(4), pages 713-736, December.
    7. Yue Wang & Feilong Weng & Xuexi Huo, 2023. "Can Digital Finance Promote Professional Farmers’ Income Growth in China?—An Examination Based on the Perspective of Income Structure," Agriculture, MDPI, vol. 13(5), pages 1-22, May.
    8. Ma, Wanglin & Ma, Wanglin & Zheng, Hongyun, 2021. "Impacts of Cooking Fuel Choices on Subjective Well-Being: Insights from Rural China," 2021 Conference, August 17-31, 2021, Virtual 315149, International Association of Agricultural Economists.
    9. Chenyang Liu & Xiuyi Shi & Cuixia Li, 2023. "Digital Technology, Factor Allocation and Environmental Efficiency of Dairy Farms in China: Based on Carbon Emission Constraint Perspective," Sustainability, MDPI, vol. 15(21), pages 1-22, October.
    10. Hongyun Zheng & Wanglin Ma, 2023. "Smartphone-based information acquisition and wheat farm performance: insights from a doubly robust IPWRA estimator," Electronic Commerce Research, Springer, vol. 23(2), pages 633-658, June.
    11. Jordan, Cristian & Donoso, Guillermo & Speelman, Stijn, 2021. "Measuring the effect of improved irrigation technologies on irrigated agriculture. A study case in Central Chile," Agricultural Water Management, Elsevier, vol. 257(C).

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