Economic Assessment of Small-Scale Mountain Dairy Farms by Using Accounting Data: Evidence from an Italian Case Study
DOI:
https://doi.org/10.7160/aol.2024.160308How to Cite
Abstract
Dairy mountain farms are economically disadvantaged due to small farm sizes and high production costs. This situation was exacerbated firstly by the opening of the market linked to the abolition of milk quotas; secondly by the rising prices due to the energy crisis due to covid 19 and the war in Ukraine. However, these farms are important for the preservation of traditional landscapes, the economy of these areas and the offered ecosystem services, especially when they are managed extensively. The objective of this research is to understand if mountain dairy farms are economically sustainable and competitive through the analysis of a case study. The economic analysis takes into account the production cost of milk, profitability, and some economic indicators using accounting data. The results show that the farm profitability is decreasing, and the costs are unsustainable. As a consequence, more efficient policy support is needed to overcome this crisis.References
Aldanondo Ochoa, A. M., Casanovas Oliva, V. and Almansa Sáez, C. (2007) "Explaining farm succession: the impact of farm location and off-farm employment opportunities", Spanish Journal of Agricultural Research, Vol. 5, No. 2. pp. 214-225. E-ISSN 2171-9292. DOI: https://doi.org/10.5424/sjar/2007052-241
Anagrafe Nazionale Zootecnia (2024) "Variazioni patrimonio nel tempo" [Online] Available: https://www.vetinfo.it/j6_statistiche/#/report-pbi/1 [Accessed: Feb. 2, 2024]. (In Italian).
Atzori, A. S., Tedeschi, L. O. and Cannas, A. (2013) "A multivariate and stochastic approach to identify key variables to rank dairy farms on profitability", Journal of Dairy Science, Vol. 96, No. 5, pp. 3378-3387. ISSN 1525-3198. DOI: https://doi.org/10.3168/jds.2012-6256
Aubert, M. and Perrier‐Cornet, P. (2009) "Is there a future for small farms in developed countries? Evidence from the French case", Agricultural Economics, Vol. 40, pp. 797-806. ISSN 0169-5150. DOI: https://doi.org/10.1111/j.1574-0862.2009.00416.x
Battaglini, L., Bovolenta, S., Gusmeroli, F., Salvador, S. and Sturaro, E. (2014) "Environmental sustainability of Alpine livestock farms", Italian Journal of Animal Science, Vol. 13, No. 2, p. 3155. ISSN 1828-051X. DOI: https://doi.org/10.4081/ijas.2014.3155
Bellingeri, A., Gallo, A., Liang, D., Masoero, F. and Cabrera, V. E. (2020) "Development of a linear programming model for the optimal allocation of nutritional resources in a dairy herd", Journal of Dairy Science, Vol. 103, No. 11, pp. 10898-10916. ISSN 1525-3198. DOI: https://doi.org/10.3168/jds.2020-18157
Bernués, A., Ruiz, R., Olaizola, A., Villalba, D. and Casasús, I. (2011) "Sustainability of pasture-based livestock farming systems in the European Mediterranean context: Synergies and trade-offs", Livestock Science, Vol. 139, No. 1-2, pp. 44-57. DOI: https://doi.org/10.1016/j.livsci.2011.03.018
Berton, M., Bittante, G., Zendri, F., Ramanzin, M., Schiavon, S. and Sturaro, E. (2020) "Environmental impact and efficiency of use of resources of different mountain dairy farming systems", Agricultural Systems, Vol. 181, pp. 102806. DOI: https://doi.org/10.1016/j.agsy.2020.102806
Camera.it (2022) "Terremoti" [Online] Available: https://www.camera.it/temiap/documentazione/temi/pdf/1116493.pdf [Accessed: June 16, 2023]. (In Italian).
Campiotti, M. (2021) "Bovine da Latte. Management della stalla. Guida alla corretta gestione da parte del direttore d’azienda", L'Informatore Agrario. 208 p. ISBN 978887220406-1. (In Italian).
Cavicchioli, D., Bertoni, D., Tesser, F. and Frisio, D. G. (2015) "What factors encourage intrafamily farm succession in mountain areas?", Mountain Research and Development, Vol. 35, No. 2, pp. 152-160. ISSN 0276-4741. DOI: https://doi.org/10.1659/MRD-JOURNAL-D-14-00107.1
Corsi, A. (2006) "Which Italian family farms will have a successor?", 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25500, International Association of Agricultural Economists. DOI: https://doi.org/10.22004/ag.econ.25500
Commission Delegated Regulation (2014) "Commission Delegated Regulation (EU) No 665/2014 of 11 March 2014 supplementing Regulation (EU) No 1151/2012 of the European Parliament and of the Council with regard to conditions of use of the optional quality term ‘mountain product’." [Online] Available: http://data.europa.eu/eli/reg_del/2014/665/oj [Accessed: Jan. 16, 2023].
CREA (2022) "Crisi energetica: gli effetti sui bilanci delle aziende con bovine da latte e sui costi di produzione del latte". [Online] Available: https://rica.crea.gov.it/crisi-energetica-gli-effetti-sui-bilanci-delle-aziende-con-bovine-da-latte-e-sui-costi-di-produzione-del-latte-824.php [Accessed: Jan. 15, 2023]. (In Italian).
Dervillé, M., Allaire, G., Maigné, É. and Cahuzac, É. (2017) "Internal and contextual drivers of dairy restructuring: evidence from French mountainous areas and post‐quota prospects", Agricultural Economics, Vol. 48, No. 1, pp. 91-103. ISSN 0169-5150. DOI: https://doi.org/10.1111/agec.12297
European Commission (2008) "Milk Sector – (4) Impact on milk margins of a price reduction complement on mountain areas", Brussels (Belgium): European Commission, [Online] Available: https://rica.crea.gov.it/milk-sector-4-impact-on-milk-margins-of-a-price-reduction-complement-on-mountain-areas-387.php [Accessed: Jan. 16, 2023].
European commission (2022) "Action and measures on energy prices", [Online] Available: https://energy.ec.europa.eu/topics/markets-and-consumers/action-and-measures-energy-prices_en#documents [Accessed: Jan. 17, 2023].
European parliament (2013) "REPORT on maintaining milk production in mountain areas, disadvantaged areas and outermost regions after the expiry of the milk quota (2013/2097(INI))" [Online] Available: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52013IP0577 [Accessed: Jan. 18, 2023].
European Parliament (2018) "The EU dairy sector Main features, challenges and prospects". [Online] Available: https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2018)630345 [Accessed: Jan. 19, 2023].
Gregori, M. (2021) "Introduzione all’economia ed elementi di economia agraria", Grafiche Battaglia – Zibido San Giacomo (MI). 1456 p. ISBN 978-88-600-8660-0. (In Italian).
Groeneveld, A., Peerlings, J., Bakker, M. and Heijman, W. (2016) "The effect of milk quota abolishment on farm intensity: Shifts and stability", NJAS-Wageningen Journal of Life Sciences, Vol. 77, pp. 25-37. ISSN 1573-5214. DOI: https://doi.org/10.1016/j.njas.2016.03.003
Hansen, B. G., Stokstad, G., Hegrenes, A., Sehested, E. and Larsen, S. (2005) "Key performance indicators on dairy farms", Journal of International Farm Management, Vol. 3, No. 1, pp. 1-15. ISSN 1816-2495.
ISTAT (2020) "Annuario statistico italiano – Territorio". [Online] Available: https://www.istat.it/it/files//2020/12/C01.pdf [Accessed: Jan. 24, 2024]. (In Italian).
Jongeneel, R. and Gonzalez-Martinez, A. (2022) "EU Dairy after the Quota Abolition: Inelastic Asymmetric Price Responsiveness and Adverse Milk Supply during Crisis Time", Agriculture, Vol. 12, No. 12, p. 1985. ISSN 2077-0472. DOI: https://doi.org/10.3390/agriculture12121985
Kühl, S., Flach, L. and Gauly, M. (2020) "Economic assessment of small-scale mountain dairy farms in South Tyrol depending on feed intake and breed", Italian Journal of Animal Science, Vol. 19, No. 1, pp. 41-50. E-ISSN 1828-051X. DOI: https://doi.org/10.1080/1828051X.2019.1691064
Lips, M. (2014) "Calculating full costs for Swiss dairy farms in the mountain region using a maximum entropy approach for joint-cost allocation", International Journal of Agricultural Management, Vol. 3, No. 3, pp. 1-9. ISSN 2047-3710. DOI: https://doi.org/10.22004/ag.econ.236888
L.R. 23/2003 (2003) "Legge Regionale n. 23 del 10.12.2003 art. 8"Marchio regionale QM – Qualità garantita delle Marche" – approvazione della nuova versione del disciplinare di produzione"Filiera latte crudo e latte fresco pastorizzato di alta qualità" e revoca della DGR n. 745 del 27.06.2006". [Online] Available: https://www.consiglio.marche.it/banche_dati_e_documentazione/leggi/dettaglio.php?arc=sto&idl=1413 [Accessed: June 16, 2023] (In Italian).
MacDonald, D., Crabtree, J.R., Wiesinger, G., Dax, T., Stamou, N., Fleury P, Gutierrez Lazpita, J. and Gibon, A. (2000) "Agricultural abandonment in mountain areas of Europe: environmental consequences and policy response", Journal of Environmental Management. Vol. 59, No. 1, pp. 47-69. ISSN 0301-4797. DOI: https://doi.org/10.1006/jema.1999.0335
Marini, L., Klimek, S. and Battisti, A. (2011) "Mitigating the impacts of the decline of traditional farming on mountain landscapes and biodiversity: a case study in the European Alps", Environmental Science & Policy, Vol. 14, No. 3, pp. 258-267. ISSN 1462-9011. DOI: https://doi.org/10.1016/j.envsci.2010.12.003
Milk Market Observatory (2023) "EU price of raw milk" [Online] Available: https://agriculture.ec.europa.eu/data-and-analysis/markets/price-data/price-monitoring-sector/milk-and-dairy-products_en [Accessed: Jan. 9, 2023].
Morales, F. D. A. R., Genís, J. M. C. and Guerrero, Y. M. (2019) "Current status, challenges and the way forward for dairy goat production in Europe", Asian-Australasian Journal of Animal Sciences, Vol. 32, No. 8, pp. 1256-1265. ISSN 1011-2367. DOI: https://doi.org/10.5713/ajas.19.0327
Pinter, M. and Kirner, L. (2014) "Strategies of disadvantaged mountain dairy farmers as indicators of agricultural structural change: A case study of Murau, Austria", Land Use Policy, Vol. 38, pp. 441-453. ISSN 0264-8377. DOI: https://doi.org/10.1016/j.landusepol.2013.12.007
Plieninger, T., Höchtl, F. and Spek, T. (2006) "Traditional land-use and nature conservation in European rural landscapes", Environmental Science & Policy, Vol. 9, No. 4, pp. 317-321. ISSN 1462-9011. DOI: https://doi.org/10.1016/j.envsci.2006.03.001
Pratt, A. D. and White, G. C. (1930) "Optimum amount of silage in the dairy ration for most economical production", Journal of Dairy Science, Vol. 13, No. 4, pp. 291-307. E-ISSN 1525-3198. DOI: https://doi.org/10.3168/jds.S0022-0302(30)93527-8
Simões Filho, L. M., Lopes, M. A., Brito, S. C., Rossi, G., Conti, L. and Barbari, M. (2020) "Robotic milking of dairy cows: a review", Semina: Ciências Agrárias, Vol. 41, No. 6, pp. 2833-2850. E-ISSN 1679-0359, ISSN 1676-546X. DOI: https://doi.org/10.5433/1679-0359.2020v41n6p2833
SMEA (2019) "Il mercato del latte – rapporto 2019 © 2019 by SMEA" – Università Cattolica del S. Cuore, Cremona, Italy. ISBN 979-12-200-4507-0. (in Italian).
SMEA (2021) "Il mercato del latte – rapporto 2020 © 2020 by SMEA" – Università Cattolica del S. Cuore, Cremona, Italy. ISBN 979-12-200-4511-7. (in Italian).
SMEA (2022) "Il mercato del latte – rapporto 2021 © 2022 by SMEA" – Università Cattolica del S. Cuore, Cremona, Italy. ISBN 979-12-210-1556-0. (in Italian).
SMEA (2023) "Il mercato del latte – rapporto 2022 © 2022 by SMEA" – Università Cattolica del S. Cuore, Cremona, Italy. ISBN 979-12-210-1558-4. (in Italian).
Staffolani, G., Rahmani, D., Bentivoglio, D., Finco, A. and Gil, J. M. (2023) "The mountain product label: Choice drivers and price premium", Future Foods, Vol. 8, p. 100270. ISSN 2666-8335. DOI: https://doi.org/10.1016/j.fufo.2023.100270
Sturaro, E., Marchiori, E., Cocca, G., Penasa, M., Ramanzin, M., and Bittante, G. (2013) "Dairy systems in mountainous areas: Farm animal biodiversity, milk production and destination and land use", Livestock Science, Vol. 158, No. 1-3, pp. 157-168. ISSN 1871-1413. DOI: https://doi.org/10.1016/j.livsci.2013.09.011
Tasser, E., Walde, J., Tappeiner, U., Teutsch, A. and Noggler, W. (2007) "Land-use changes and natural reforestation in the Eastern Central Alps", Agriculture, Ecosystems & Environment, Vol. 118, pp. 115-129. ISSN 0167-8809. DOI: https://doi.org/10.1016/j.agee.2006.05.004
Verduna, T., Blanc, S., Merlino, V. M., Cornale, P. and Battaglini, L. M. (2020) "Sustainability of four dairy farming scenarios in an Alpine environment: The case study of Toma di Lanzo cheese", Frontiers in Veterinary Science, Vol. 7. ISSN 2297-1769. DOI: https://doi.org/10.3389/fvets.2020.569167
Wolf, C. A. (2010) "Understanding the milk-to-feed price ratio as a proxy for dairy farm profitability", Journal of Dairy Science, Vol. 93, No. 10, pp. 4942-4948. E-ISSN 1525-3198. DOI: https://doi.org/10.3168/jds.2009-2998
