Benchmarking Cost of Milk Production in 46 Countries

Torsten Hemme, Mohammad Mohi Uddin and Oghaiki Asaah Ndambi ()
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Oghaiki Asaah Ndambi: IFCN Dairy Research Center at the University of Kiel, Germany

Journal of Reviews on Global Economics, 2014, vol. 3, 254-270

Abstract: The global dairy industry is facing challenges due to the extremely volatile milk price and a substantial increase of feed prices. The goal of this study, therefore, was to compare and benchmark the cost of milk production in 46 countries representing 87% of the world's total milk production, using a standard method developed by the International Farm Comparison Network (IFCN). Two typical farms were selected per country; one average-sized and one larger farm. The cost of milk production in 2010 ranged from 16.91US-$/100kg Energy Corrected Milk (ECM) in Armenia to 97.27 US-$/100kg ECM in Switzerland, with cost differences mainly driven by the diversity in farming and feeding systems. Based on costs, world regions were categorized into four levels: 40-50 US-$ in the EU, Middle East and China; 30-40 US-$ in the USA, Brazil, CEEC and Oceania; 60 US-$ in Austria, Norway, Switzerland and Canada. The major drivers for this variation were ranked as; purchased feed cost (the highest) followed by labor, land and machinery costs. Regression analyzes showed that costs were highly correlated milk yield and milk price but not to herd size.

Keywords: Benchmark; cost of milk production; International Farm Comparison Network; typical farm (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:lif:jrgelg:v:3:y:2014:p:254-270

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