The Cost Function Structure of Dutch Dairy Farms: Effects of Quota abolition and Price Volatility

Samson, G.S. (Sabrina), Koos Gardebroek and Roelof A. Jongeneel

No 125956, 126th Seminar, June 27-29, 2012, Capri, Italy from European Association of Agricultural Economists

Abstract: This paper investigates potential impacts on milk production of Dutch dairy farms if feed prices increase, milk prices decrease and milk quotas are abolished. A quadratic cost function is estimated using panel data on individual dairy farms of the Dutch FADN. Marginal costs and revenues are evaluated to show the heterogeneous farm-level impact of changing prices on potential production developments. The main finding is that potential increases in milk production when quota are abolished, are offset by a decreasing marginal revenue due to lower milk prices, and increasing marginal costs due to higher feed prices.

Keywords: Agricultural and Food Policy; Industrial Organization; Political Economy (search for similar items in EconPapers)
Pages: 18
Date: 2012-06
New Economics Papers: this item is included in nep-agr and nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa126:125956

DOI: 10.22004/ag.econ.125956

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