Animal Breeding and Productivity Growth of Dairy Farms

Daniel Muluwork Atsbeha, Dadi Kristofersson and Kyrre Rickertsen

American Journal of Agricultural Economics, 2012, vol. 94, issue 4, 996-1012

Abstract: We introduce genetic-based technical change into a Malmquist productivity index and measure the growth in productivity caused by bovine breeding. Because breeding is likely to affect milk quality, we adjust milk quantities for quality differences. We use panel data on Icelandic dairy farms from 1997 to 2006 to estimate an input distance function. The Malmquist productivity index shows that the average productivity growth rate is 1.6%. Scale effects are the most important source of this growth, but 19% of the productivity growth rate is due to breeding. If quality differences are ignored, the average productivity growth rate is reduced by 83%. Copyright 2012, Oxford University Press.

Date: 2012
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