Can Smale Scale Organic Dairy Beef Farmers Make It
Introduction
Changing marketplace conditions, technological progress and economic pressure take led to a steady consolidation and intensification of dairy product in the final decades (Tilman et al. 2002). In add-on, milk production has shifted to more profitable regions while in disadvantaged ones, such equally mountain areas, a high percentage of agronomical land has been abased (MacDonald et al. 2000; Tasser et al. 2007). Even so, dairy mountain farms are of great importance as the pasturing of animals and forage production prevents reforestation (Tasser et al. 2007). This in plow has positive impacts on the surroundings and biodiversity only too ensures preservation of traditional landscape and increases the region'southward attractiveness for population and tourism (Bernués et al. 2011; Battaglini et al. 2014).
The main challenges for mountain farmers are the limited possibility to expand the herd size to benefit from economies of calibration (MacDonald et al. 2000) equally well as the high workload and production costs due to steep slopes and altitudes (Lips 2014). As a result, the economic situation is often worse compared to dairy farms located in plain areas (Kirner and Gazzarin 2007; EC 2008) and causes mount farmers to abandon or intensify milk production (MacDonald et al. 2000; Battaglini et al. 2014). Due to the limited areas, farmers can only increase milk yield through feeding higher amounts of concentrates and the use of loftier yielding breeds (MacDonald et al. 2000; Caviglia-Harris 2005). Both intensification strategies may lead to a loss of ecosystem services mainly because intensive farms cultivate less grassland (Sturaro et al. 2009). In addition, high-yielding breeds are frequently not appropriate for grazing on mountain pastures but demand more concentrated feed (Zollitsch et al. 2016). Thus, intensification of dairy production in mountain areas is accompanied with negative environmental consequences (Cozzi et al. 2006; Battaglini et al. 2014). However, profitability and farm income will exist decisive for the survival of (mountain) farms (Bragg and Dalton 2004; Gellrich and Zimmermann 2007) and several studies show that intensive systems superior all-encompassing ones in terms of profitability (Soder and Rotz 2001; Alvarez et al. 2008; Wilson 2011). Extensive milk product is only more than economical if it is continued to a clear reduction of product costs and working time (Ramsbottom et al. 2015; Gazzarin and Schmid 2017), which is hard to accomplish in most mount regions (Lips 2014). To the best of our knowledge, there is only one study comparing the economical state of affairs of extensive and intensive strategies of mountain dairy farming. Cozzi et al. (2006) show that extensive farms attain higher net incomes due to lower costs for extensive production. Still, herd sizes of the analysed farms (34 vs. 54 lactating cows) are larger than average mountain dairy farms, which limits the significance for small farms. In addition, a study by Pretto et al. (2009) shows that traditional local breeds are economically disadvantaged compared to loftier-yielding breeds (Holstein Friesian) due to lower milk yields and tin can only accomplish a similar income per cow if the milk is marketed for a higher price, e.thousand. for the production of a special cheese. However, no study compared the profitability of modest mount farms dependent on feed intake and brood. Still, this is of corking interest as these factors can be influenced past farmers to increase productivity and profitability but have several consequences for the surround and the preservation of traditional mount farms. Therefore, the aim of this study is to analyse the income per subcontract, per ha and per kg energy-corrected milk (ECM) produced as well as the workload and farmer's attitudes towards their situation and future of farms located in the Italian Alps (Province of South Tyrol). South Tyrol is situated in the very northern function of Italy and is characterised by mountains with only 14% of its country surface area below an altitude of 1000 chiliad, 49% between g m and 2000 m and 37% above 2000 m.a.s.l. (Südtiroler Landesverwaltung 2017). Milk production is an important agricultural industry and dominated by small farms with on average 13 cows per subcontract (Südtiroler Landesverwaltung 2017). Thus, this area is a good example to analyse the economic situation of small-scale-scale mountain dairy farms.
The analysed farms were grouped according to the amount of concentrates fed (low vs. high) and the brood used (Tyrolean Grey vs. Brown Swiss). The number of high-yielding breeds is rising in South Tyrol what might indicate an increase in intensification (Südtiroler Landesverwaltung 2017). The written report results offer the possibility of deducing recommendations for future policies regarding the maintenance of small extensive dairy farms in mountain areas. This is of peachy importance, as intensive milk product non only has negative consequences for the environs simply also contradicts the public idea of mount farming and might lower the regions attractiveness for tourists (Gazzarin and Schmid 2017; Faccioni et al. 2019).
Material and methods
All farmers voluntarily participated in the survey and the anonymity of participants is guaranteed during the whole study.
Data collection
In society to compare the profitability of strategies for pocket-sized-scale dairy farms in mountain areas, which differ in terms of intensification, the farms included in this report were selected according to the amount of concentrates fed to lactating cows and the brood used. Therefore, we set a maximum amount of concentrated feed per day and lactating cow for the all-encompassing farms and a minimum amount for the intensive farms depending on the breed and then that 4 groups were divers (Table i). For the breeds, we chose Tyrolean Grey and Brown Swiss to compare a local dual-purpose and a loftier yielding brood that are unremarkably used in South Tyrol (Sennereiverband 2017).
Tabular array one. Criteria for the selection of the dairy farms for the iv different groups.
In improver, all farms take a farm size between seven to 22 cows, are located above at to the lowest degree 700 k.a.southward.l. (metres above sea level) and participate in routine milk control. The selection was based on a survey that was completed by almost all South Tyrolean dairy farmers in the twelvemonth 2016 and was validated during farm visits. In some cases, there had been differences with respect to the amount of concentrates fed to lactating cows and so that these farms did not fit to the defined limits. Farmers who fed less or more than concentrate than the called limits or used mixed breeds were excluded from the survey.
In total 58 out of lxx farms visited remained in the sample. The farms were visited from October 2017 to May 2018 and were interviewed with respect to their economic situation, farm structure, and husbandry and feeding system. To measure out the economic situation, farmers indicated all revenues and expenses related to milk product as well as their investments in machines in the last 15 years and in buildings for the terminal xxx years. When investments are likewise used for other purposes, farmers were asked to estimate the share of apply in milk product. In addition, we used data from milk records to summate the energy corrected milk yield per cow and farm using the formula by Weiß (2001).
Furthermore, 5-point Likert-scales were used to measure farmers opinion nearly the relation of piece of work try and farm income, the probability that they volition even so produce milk in ten years and if they want to alter milk yield per cow in the near time to come. These statements tin can requite further insights into the human relationship between the risk of subcontract abandonment and the economic situation of farms. In addition, farmers estimated the time that is needed for all the work within the stable (Poulopoulou et al. 2018). Therefore, they should consider all family unit members who piece of work in the barn. Farmer'southward work effort for manure awarding is not included in this calculation. Working time for provender production was also not taken into business relationship only we used a formula by Peratoner et al. (2010) to approximate the costs for forage production. For this estimation, motorcar costs and labour costs were considered and the calculation is based on the farms distance and steepness of slopes. As costs for machinery are already included in the cost accounting, nosotros only considered fifty% of the estimated costs for economical analysis as Peratoner et al. (2010) state that about half of the total costs result from work effort.
Calculation of profitability
All economic data refer to the year 2016 and are expressed in euro (€) or eurocent (c) unless otherwise stated. Full price accounting was washed for each farm and in average for each of the four groups. The calculated income was further used to compute the hourly wage for the work inside the stable. Variable and fixed costs as well as gross margin and cyberspace income were calculated. Variable costs are characterised past the directly link to the production volume and contain all feed costs, costs for veterinary, insemination, stock replacement, hook care, litter, transport, pasture seeding and fertiliser. Costs that are not directly influenced by the output are named stock-still costs and are related to buildings and machines such equally depreciation, repairs and maintenance, ability and fuel also as insurance fees or fees for memberships and costs for hired labour and phone. The resource allotment of costs as variable or fixed followed Ramsbottom et al. (2015). All revenues (milk and animal sales as well as forage and manure sales) minus variable costs calculated the gross margin and gross margin minus fixed costs results in farm income.
For comparative purpose, all revenues and costs were divided by the managed grassland area (ha) and the milk yield (ECM). These parameters were chosen because grassland area is a limiting factor for the farmers' expansion and the amount of milk produced is directly related to the amount of concentrate supplementation what is the main distinctive feature for the classification every bit low or high-input subcontract in our study. Therefore, the economic analysis was washed per kg ECM, per ha and per farm to observe factors that are responsible for the profitability. For a improve overview, just the most of import cost factors are shown in detail, whereas costs with a low amount are summarised as others. In the total costs, however, all costs are included. The income per farm was further used to calculate the remuneration for the farmer'southward workload which is a farther indicator of profitability and can be used for the comparing of dissimilar production branches.
Share of milk derived from roughage
It is known that the share of milk that is derived from roughage could touch on the profitability and cows' wellness (Kiefer et al. 2015). Thus, the share of roughage used for milk production was calculated by using the formula (one) of Weiß (2001) and differences between the farms were analysed. (one)
(ane)
Thereby, the amount of internet energy lactation in mega joule (MJ NEL) was adapted for the respective concentrate that was used by the farmer. The free energy value differed between 7.0 and 7.3 MJ NEL.
Statistical analysis
Nosotros apply Analyses of variance (ANOVAs) to exam for significant differences between the grouping ways. Mail service hoc tests were farther used to find out which groups differ significantly. Therefore, the groups' means were tested for homogeneity of variance with the Levene'south exam. If variances were homogenous, Gabriel's test was used whereas Games Howell'due south examination was used when variances were heterogeneous. All pregnant levels are related to p < .05.
ANOVAs and postal service hoc tests were also used to find significant differences regarding revenues, costs and farm construction among the 20% of all 58 farms achieving the lowest and highest profit per kg ECM and per subcontract, respectively. All analyses were done using IBM Statistics SPSS 25.
Results
Farm characteristics
All farms are family unit businesses and sell their products by cooperatives. Table 2 shows the farm descriptions of the four studied groups. Farms of all groups were located above one thousand 1000.a.s.l. Except for the group Fifty-BS, the majority worked as full-time farmers. We found that the dominant husbandry arrangement was the tie-stall for all groups, even though the group H-BS has a relatively loftier pct of loose housing. Days of pasture decrease with an increasing intensification level from L-TG to H-BS, while concentrates/moo-cow and day and ECM/cow and year increase with increasing intensification level.
Table ii. Descriptions of farms by group.
Economic performance
Table 3 shows that farm income without subsidies is negative for both extensive groups and similar and positive for both intensive groups with 5638€ and 5993€. When subsidies are considered, intensive farms are still more profitable compared to extensive ones simply farms using Tyrolean Grayness are in a amend economic position compared to farms using Brown Swiss. Information technology likewise turns out that farms using Tyrolean Gray accept higher revenues for sold cows. Furthermore, it can be seen that variable costs per farm and year are lowest for depression-input farms and highest for high-input farms using Dark-brown Swiss, whereas fixed costs are also clearly college for this grouping but similar for all other groups. Workload per twenty-four hour period and twelvemonth is similar betwixt all groups, leading to higher remunerations per working 60 minutes for intensive farms.
Table three. Revenues, costs and income by grouping in €.
Income incl. subsidies per kg ECM is highest for the H-TG farms with 18.three c/kg followed by 50-TG, H-BS and L-BS farms. Variable costs per kg ECM are similar for all groups whereas fixed costs are conspicuously lower for loftier-input farms due to higher milk yield (Tabular array 4). This leads to a cost advantage of 10 c/kg ECM for the intensive farms. When it comes to income per ha, high-input farms using the brood Chocolate-brown Swiss are leading. This is mainly because these farms cultivate less grassland. Nevertheless, H-TG farms attain almost similar income per ha and manage most ha grassland (xi.4 ha) (Table v).
Table 4. Revenues, costs and income per kg ECM in €-Cent.
Tabular array v. Revenues, costs and income per ha grassland in €.
Even so, there is a high variation of income inside all groups.
Comparison of farms with lowest and highest income
Table half-dozen shows the main differences between the farms with the highest and the everyman income per kg ECM, per ha grassland and per farm. Nosotros found that farms with the lowest income per kg ECM attain slightly college revenues simply accept more than than twice equally high fixed costs. Information technology becomes farther axiomatic that for all parameters low-input farms are mainly among the farms with the everyman income whereas only two L-TG farms are amongst the farms with the highest income per ECM, one L-TG farm achieves a high income per farm and i Fifty-BS subcontract is among the farms with the highest income per ha. Thus, farms with everyman income are characterised by a lower milk yield per cow, a college percentage of roughage in the feed ration and more pasture days per year.
Table 6. Comparing of the 20% of farms that reach the lowest or highest income per kg ECM, per subcontract and yr and per ha grassland in terms of economical indicators, group affiliation, feeding and husbandry.
Farmers' satisfaction and attitudes
Table 7 shows that dairy farmers in all groups tend to disagree that the payment is in a expert relation to the work attempt. All the same, farmers with an intensive milk production are more satisfied with their remuneration and are more sure that they volition still produce milk in ten years compared to farmers using an all-encompassing strategy. The agreement that milk will still be produced in ten years correlates with the satisfaction of the financial remuneration (r = 0.430, p = .001).
Table vii. Farmers' satisfaction with and attitudes towards their economic situation and future farm decisions.
Discussion
Subcontract structure
Mount dairy farms are of high importance for the local economic system and the maintenance of traditional landscapes (Battaglini et al. 2014). The results of the nowadays report confirm that dairy farming is a full-time business for more than half of the visited farmers indicating that milk production is an important industry with respect to the provision of employment. All the same, the proportion of full-time dairy farmers is lower throughout South-Tyrol (thirty%; Sennereiverband 2017) merely similar in other alpine regions (Streifeneder et al. 2007). Mountain dairy farmers are farther of high importance for the conservation of grassland equally farmers apply on average more than than 10 ha for hay production and pasturing. This is mainly true for farms using the local breed Tyrolan Grey and farms that are more than all-encompassing. Thus, from an ecological view extensive farms using local breeds make a greater contribution in terms of ecosystem services what is in line with previous studies (Bernués et al. 2011; Marini et al. 2011; Sturaro et al. 2009; Gazzarin and Schmid 2017).
Economic functioning
Still, dairy farms in mountain regions are confronted with many peculiarities, which also bear on the economic state of affairs. Existing studies revealed that mountain farming is linked to higher production costs compared to dairy farms located in plain areas (Kirner and Gazzarin 2007; EC 2008; Lips 2014). This is consistent with our findings: for all subcontract groups nosotros plant that costs per kg ECM (betwixt 58.one c/kg and 70.6 c/kg) are clearly higher compared to average product costs in Deutschland (36.5 c/kg), France (36.viii c/kg) or Italy (30.v c/kg) (Gołaś 2017). Especially stock-still costs per kg ECM are higher compared to other countries and tin can be seen equally the main disadvantage of small-scale mountain farms what is in line with previous studies (MacDonald et al. 2007; Lips 2014). The state of affairs is even worse for low-input farms, for which fixed costs are about ten c/kg ECM higher, due to a lower quantity of milk produced. Profitability per ha is highest for H-BS farms due to the lowest pct of grassland managed by these farms. In dissimilarity, H-TG farms manage most grassland and accomplish like income per ha. For high-input farms, income per ha is merely slightly lower compared to what Suisse mountain dairy farms generate (Gazzarin and Schmid 2017).
In full, all parameters testify that loftier-input farms outperform low-input farms in terms of profitability – except income per ECM for which L-TG farms achieve higher incomes than H-BS farms. Even so, when it comes to income per ha or subcontract the results are conclusive. Thus, our event contrasts the finding of Cozzi et al. (2006) that extensive mountain dairy farms gain higher farm income. Yet, the results might non be comparable as their study was conducted in some other region (Altopiano dei Sette Comuni, Northern Italy). Furthermore, the farms analysed past Cozzi et al. (2006) used different breeds (Rendena, Pezzata Rossa and Bruna Italiana in extensive farms and Friesian and Browns in intensive farms) and had larger herd sizes (35 in extensive and 54 lactating cows in intensive farms), which in add-on differed betwixt the extensive and intensive farms. Therefore, intensive farms in their study had higher costs due to larger buildings and more machinery. In our written report, farm construction for extensive and intensive farms is similar among the groups and herd sizes are smaller. The different findings underline the influence of farm structure and regional atmospheric condition on profitability.
I regional characteristic in the Province of South Tyrol is the milk to feed price ratio of nigh 1.viii. This value might also explicate the articulate dominance of high-input farms with respect to farm income. Hemme (2015) states that a milk to feed cost ratio college than ane.five makes intensive milk product more gainful. The fact that in South Tyrol the milk cost (Ø 54 c/kg ECM) is much higher than costs for purchased loftier energy feed (Ø 30 c/kg) tin can too be the rationale for the result that farms with highest farm income bear witness the smallest percentage of milk derived from roughage (27%). This value is articulate below the recommendations of dairy diet experts (Kiefer et al., 2015). However, de Oliviera et al. (2010) likewise signal that with the current prices in South Tyrol a concentrate intake per cow and day of more 8 kg might be most profitable. Additionally, hay produced in South Tyrolean mountains is of low quality (Peratoner et al. 2010) and information technology is known that the cows response to concentrate supplementation is higher when roughage contains low energy (Hanrahan et al. 2018).
Regarding the breeds the results show that farms using the local breed Tyrolean Greyness can compete with the high yielding brood Brown Swiss. Especially H-TG farms seem to combine the merits of dual-purpose breeds (higher revenues from cattle auction and lower replacement costs due to longer productive life; Evans et al. 2004; Dal Zotto et al. 2007) and further profit from economies of calibration caused past higher milk yield (MacDonald et al. 2007). In add-on, farms using Tyrolean Grayness do good from higher subsidies due to a larger share of grasslands and the boosted support of Tyrolean Grey cattle every bit this breed is listed as endangered (Bittante 2011).
Yet, the high standard deviations for all parameters and all groups advise that the feeding strategy or brood used is non sufficient to depict conclusions near profitability (Shadbolt 2008). Nevertheless, the comparison of the farms with the lowest and highest income underlines the economical superiority of loftier-input farms. Farms achieving the highest income have significantly larger herd sizes, produce more milk per cow, feed more than concentrates and keep their cows less frequently on pastures. The finding that milk yield per moo-cow and number of dairy cows per subcontract are of strong influence for the income per subcontract is in line with findings by Wilson (2011). Considerable cost saving would exist necessary to make farms with lower milk yield competitive to intensive ones (Alvarez et al. 2008; Ramsbottom et al. 2015; Hanrahan et al. 2018) but this was not realisable for the analysed farms.
To summarise, the results show that under electric current conditions feeding large amounts of concentrates is economically advantageous for South Tyrolean modest-calibration dairy farmers. This could, even so, be linked to issues regarding animal welfare (Manson and Leaver, 1988), touch on on environment and landscape (Strijker 2005; Battaglini et al. 2014), the regions bewitchery for tourists (Battaglini et al. 2014) and public acceptance (Gazzarin and Schmid 2017; Faccioni et al. 2019). Furthermore, a depression percent of roughage used for milk production could lead to less fatty acids in the milk (Borreani et al. 2013).
Due to these negative aspects, extensive mountain farms already receive financial back up (EC 2008). The results of our study confirm that low-input farms are more dependent on subsidies – without financial aid, their income is negative. However, the South Tyrolean system of support is not sufficient to provide depression-input farmers with a similar income to that of farmers using an intensive feeding strategy. To support mountain dairy farms feeding less concentrates pricing strategies and governmental direct payments should even more consider differences and particularities on farm level (Caraveli 2000; Strijker 2005; El Benni and Finger 2013). In Switzerland, some direct payments are only paid when the production of milk and meat is based on grassland. In detail, farms receive fiscal aid from a special direct payment scheme when the almanac feed ration consists of at least 85% (in mountain areas; 75% for farms located in flatlands) fresh, ensiled or dried grass fodder and only a maximum of 10% concentrated feed (BLW 2019). In this context, the labelling and marketing of traditionally and locally produced mountain products at higher prices may also be promising (Mitchley et al. 2006; Santini et al. 2013). Another approach to reduce the use of concentrated feed is to introduce taxes on imported feed. Although this would initially increase costs for intensive farms, the tax revenue could be used to provide fiscal support for extensive farms. Information from Switzerland confirm that loftier concentrate costs through import taxes likewise as corresponding straight payments increment the pct of domestically produced and grassland based feeding (Mack and Kohler 2019).
Farmers' workload, payment and attitudes
The required working fourth dimension per farm and twelvemonth is similar amidst all farm groups and in line with findings past Poulopoulou et al. (2018). The remuneration per working hour is therefore college for high-input farms as these farmers achieves higher income with equal piece of work effort. Thus, especially for depression-input farmers it could be worthwhile to quit dairy farming and find off-farm work. However, this is dependent on the availability of appropriate jobs and farmers motivation (Zimmermann and Heckelei 2012; Pinter and Kirner 2014). Indeed, for the surveyed farmers there is a full general tendency that most of them still want to produce milk in ten years. However, high-input farmers are more convinced to continue dairy farming, which is because these farmers are more satisfied with their remuneration. Peel et al. (2016) confirm that the probability to quit farming is related to farmers' wellbeing and income. Thus, the hazard of farm exits might exist college for extensive farms (MacDonald et al. 2000; Tasser et al. 2007). Thus, although most farmers land that they exercise not want to increase milk yield per moo-cow, it cannot be ruled that farmers nevertheless volition intensify when they get aware of the economical advantages of intensive farming. Indeed, the nearly important aim is that the farms financial viability take to be ensured to maintain extensive farms in the long-term (Bragg and Dalton 2004; Gellrich and Zimmermann 2007).
Conclusion
Our findings reveal that loftier-input dairy farming through feeding loftier amounts of concentrates pays off economically for South Tyrolean small-scale mountain farmers because the loftier fixed costs tin exist thinned past higher milk volume. In addition, the high milk to feed toll ratio makes it clearly profitable to produce more milk with purchased feed to cover fixed costs. This leads to higher incomes on farms where the percentage of roughage in the feed ration is beneath the recommended criterion. The results further prove that the local breed Tyrolean Grey tin can compete with the high-yielding breed Brown Swiss in economic terms and at the same fourth dimension is more used for grazing on mountain pastures. Nevertheless, economical motivation for extensive dairy farming, with significantly more positive environmental effects, is depression, as current subsidies are not sufficient to compensate lower farm income. Although most of the surveyed farmers do not wait changes in their feeding strategies, the question arises of how to prevent intensification or farm exits in the long-term. Deducing from the results of this study, try should be extended to support extensive farming, mainly when local breeds are used, as these farms manage more grasslands, feed more fodder and proceed their cows more than often on pasture with positive effects for surround, landscape and animals' welfare. In addition, this kind of farming is more in line with the public's expectations and thus extensive farming could lead acceptance rate what is decisive for the hereafter of dairy farming. An adaptation of the milk price to the farming strategy, as it is already washed for hay milk, or of paid subsidies could be a worthwhile tool for the conservation of all-encompassing pocket-sized-scale dairy farms in mountain areas whereas a unified high milk price might have the opposite effect. Steering taxes on concentrated feed might as well exist an option to strengthen the situation of all-encompassing pocket-size-scaled farms, specially, when the tax money was used to cantankerous-finance the all-encompassing farms.
Source: https://www.tandfonline.com/doi/full/10.1080/1828051X.2019.1691064
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