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Diversification economies in dairy farming – empirical evidence from Germany

Author

Listed:
  • Stefan Wimmer
  • Johannes Sauer

Abstract

This article explores how farm size is related to economic benefits from diversification. Using a data set pertaining to Bavarian dairy farms (2000–2014), we estimate an input distance function (IDF) to derive cost complementarities between distinct outputs. A Bayesian estimation technique is used to improve the theoretical consistency of the IDF. The results show that small dairy farms are more likely to benefit from diversification between milk and livestock production, while larger farms tend to benefit from diversification between milk and crop production. Both managerial and policy implications are discussed.

Suggested Citation

  • Stefan Wimmer & Johannes Sauer, 2020. "Diversification economies in dairy farming – empirical evidence from Germany," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(3), pages 1338-1365.
    • Handle: RePEc:oup:erevae:v:47:y:2020:i:3:p:1338-1365.
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    File URL: http://hdl.handle.net/10.1093/erae/jbaa001
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    Citations

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    Cited by:

    1. Wenmei Liao & Jiawei Wang & Ying Lin & Yao Wang, 2021. "Chronic Illness and Income Diversification in Rural China," IJERPH, MDPI, vol. 18(7), pages 1-15, March.
    2. Chemerys, Vasyl & Dushka, Vitalii & Dorosh, Mariana & Maksym, Volodymyr, 2020. "Export potential of the livestock breeding industry of Ukraine," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 6(3), September.
    3. Maximilian Koppenberg & Stefan Hirsch, 2022. "Output market power and firm characteristics in dairy processing: Evidence from three EU countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(2), pages 490-517, June.
    4. Stetter, Christian & Sauer, Johannes, 2022. "Agroforestry Adoption in the Face of Regional Weather Extremes," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321173, Agricultural Economics Society - AES.
    5. K Hervé Dakpo & Laure Latruffe & Yann Desjeux & Philippe Jeanneaux, 2021. "Latent Class Modelling for a Robust Assessment of Productivity: Application to French Grazing Livestock Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 760-781, September.
    6. Jean‐Paul Chavas & Doris Läpple & Bradford Barham & Emma Dillon, 2022. "An economic analysis of production efficiency: Evidence from Irish farms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(2), pages 153-173, June.
    7. Stetter, Christian & Wimmer, Stefan & Sauer, Johannes, 2023. "Are Intensive Farms More Emission-Efficient? Evidence From German Dairy Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(1), January.
    8. Ioannis Skevas, 2023. "A novel modeling framework for quantifying spatial spillovers on total factor productivity growth and its components," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1221-1247, August.

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