Economic Situation of Dairy Farms in Identified Clusters of European Union Countries

Walenty Poczta, Joanna Średzińska and Maciej Chenczke
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Walenty Poczta: Department of Economics and Economic Policies for the Agribusiness, Poznań University of Life Sciences, ul. Wojska Polskiego 28, 60-637 Poznań, Poland
Joanna Średzińska: Department of Economics and Economic Policies for the Agribusiness, Poznań University of Life Sciences, ul. Wojska Polskiego 28, 60-637 Poznań, Poland
Maciej Chenczke: Department of Economics and Economic Policies for the Agribusiness, Poznań University of Life Sciences, ul. Wojska Polskiego 28, 60-637 Poznań, Poland

Agriculture, 2020, vol. 10, issue 4, 1-22

Abstract: The economic situation of EU dairy farms is unstable and differs strongly between member countries. Most studies addressing the EU’s agricultural sector focus on selected countries or selected groups of operators. Conversely, this paper seeks to determine the economic situation of dairy farms in EU countries grouped into types according to their production potential. The analysis relied on data collected and processed in the FADN (Farm Accountancy Data Network). The farms were classified based on a hierarchical clustering routine. The agglomerative technique was used. Distances between clusters were calculated using the Ward’s method. In turn, the distance between countries was calculated as the Euclidean distance. This study enabled the identification of five different types of dairy farms in the EU. On an EU-wide basis, medium and large-sized highly specialized intensive farms play a key role in milk production. Despite their profitability being somehow restricted, they report high levels of labor productivity thanks to an advantageous production potential. In turn, an insufficient potential is among the main restrictions faced by other dairy farms in the EU; their advantageous financial indicators often fail to provide satisfactory levels of income which could drive investment and consumption opportunities.

Keywords: dairy farms; FADN; clustering; EU; economic situation; production potential (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jagris:v:10:y:2020:i:4:p:92-:d:337696

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