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The Effect of Multiple Component Pricing Sytem on Productivity and Technical Efficiency of Ontario Dairy Farms

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Title: The Effect of Multiple Component Pricing Sytem on Productivity and Technical Efficiency of Ontario Dairy Farms
Author: Deng, Kaiyuan
Department: Department of Food, Agricultural and Resource Economics
Program: Food, Agriculture and Resource Economics
Advisor: Hailu, Getu
Abstract: The purpose of this study is to examine the effect of milk compositional pricing policy reforms (i.e., component pricing change, solids-non-fat to butterfat ratio standard, and Class 6/7 milk class pricing policy) on the technical efficiency and milk and milk components productivity of Ontario dairy farms using the Ontario Dairy Farm Accounting Project (ODFAP) data. In this study, a stochastic input distance function is estimated to assess the technical inefficiency of the sample farms. Results indicate that the component pricing change had a positive effect on the technical inefficiency of dairy farms. A fixed-effect panel regression model estimated the effect of the change in policies towards dairy farm productivity (i.e., milk yield per cow, protein yield per cow, and butterfat yield per cow). Therefore, the results indicate that the SNF: BF ratio standard had a positive effect on milk yield, protein yield, and butterfat yield per cow. However, the Class 6/7 milk class pricing policy had negative effects on milk and butterfat productivity.
Date: 2021-09-07
Rights: Attribution-NoDerivatives 4.0 International

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