Liquidity, hedging and the survival of North German dairy farms

2021 ◽  
Author(s):  
Stephan Hoehl ◽  
Sebastian Hess
Keyword(s):  
Dairy Farm ◽  
Price Volatility ◽  
Raw Milk ◽  
Production Costs ◽  
Dairy Farmers ◽  
Northern European ◽  
Fixed Price ◽  
Milk Output ◽  
Complex Decision ◽  
Different Levels

Abstract Increasingly, European dairy farmers have to manage the raw milk price risk. Price hedging for raw milk and an increasing number of individual fixed-price contracts with processors are now available. However, the choice of hedging a certain share of milk output still leaves individual farmers facing a complex decision. The cash flow model in this study explains the probability of a typical northern European dairy farm surviving illiquidity over an 18-month period under common milk price volatility. The probability of farm survival was modelled in relation to available liquidity buffers and different levels of farm-specific production costs. The model allowed minimum shares of milk output to be determined, for which a fixed price should be hedged if the objective is farm survival at a given probability. Using these modelling results, practitioners are able to determine this share graphically.

scholarly journals Profitability and Correlation Between Koica Milk Shop and Dairy Farm in Selupu Rejang, Bengkulu, Indonesia

2020 ◽  
Vol 3 (2) ◽  
pp. 46-57
Author(s):  
Soeng Chat Vichea ◽  
Endang Sulistyowati ◽  
Pao Srean
Keyword(s):  
General Condition ◽  
Dairy Cow ◽  
Dairy Farm ◽  
Dairy Farms ◽  
Production Costs ◽  
Data Driven ◽  
Dairy Farmers ◽  
Dairy Farmer ◽  
Very High ◽  
New Strategies

The objective of this research was to analyze profitability and correlation between KOICA milk shop and dairy farms in Selupu Rejang, Rejang Lebong, Bengkulu, Indonesia.  Data driven were  general condition, performance of Milk Shop, performance of dairy farms, and the correlation between KOICA milk shop and dairy farmer are evaluated.  The methodology started by census that chosen only KOICA milk shop owner and dairy farmers who pooled the milk to KOICA milk shop.  Data collected then tabulated and analyzed using Excel and Regression.  The result showed that both KOICA milk shop and dairy all were gained properly benefit from dairy business. For the average, it was about IDR 6,557,057.75 per month equivalent to USD 493 as a profit in KOICA milk shop. The profit was depending on the milk production from dairy farmer only, if they couldn’t milk from dairy cow, KOICA milk shop won’t be able to earn money. The dairy farmers were also got IDR 3,620,311.09 (USD 272) per month as the average profit from milk, compost and calve.  There was very high correlation between the milk produced by dairy farmers then processed by Koica Milk Shop and its profit was r : 0.99. The discovering of this research was very valuable information, and also important to whom it may concern in dairy business as well as dairy farmers and Government for applying or understanding to develop new strategies for reducing production costs and to increase the profit by using model of whom successful in dairy business.

scholarly journals Analysis of the producer price of Hungarian raw milk in international comparison

2012 ◽  
Vol 6 (5) ◽  
pp. 27-32
Author(s):  
Beáta Blaskó
Keyword(s):  
Milk Production ◽  
International Comparison ◽  
Low Cost ◽  
Dairy Farm ◽  
Raw Milk ◽  
Dairy Farmers ◽  
Producer Price ◽  
Excise Duty ◽  
Dairy Market ◽  
High Level

Although the dairy market crisis eased in 2011, Hungarian dairy farmers still find it difficult to produce milk profitably. As a result of the crisis, many dairy farmers abandoned milk production or reduced the size of their dairy herds in 2009 and 2010. Today, many of farmers are also considering ceasing production, in spite of the fact that the global dairy industry is facing an upturn. A dairy farm can operate profitablyy in three ways: 1) if it can reach a relatively high level of producer price 2) if it can increase milk production per cow 3) if it can achieve a relatively low cost of production. In the present study, I primarily analyse the development of the Hungarian producer price of raw milk in international comparison. Next, I list those factors which directly or indirectly influence the producer price of raw milk. Finally, I examine the relationship among disposable income, milk consumption and milk price. Since the start of 2009, the dairy market has been confronted with a period of extraordinary law prices. After bottoming out, prices had begun to slowly stabilise during the second half of 2009. By the end of that summer, international prices had started to strengthen and the last quarter of 2009 was characterized by a steady rise in prices. The strong recovery in prices experienced after 2009 was triggered by increased demand, mainly from oil exporting countries, but also from China. The price increase, however, reflected a significant increase in input costs in Hungary; the high level of feed prices and the unfavourable change in the macroeconomic environment must be stressed. The rising excise duty on diesel fuel and the VAT increase had a direct impact on Hungarian dairy farmers. These negative factors have increased the costs of the sector, narrowing the ability of those active in it to operate efficiently.

Measuring the cost of environmental compliance for Waikato dairy farmers - a survey approach

2015 ◽  
Vol 77 ◽  
pp. 159-166
Author(s):  
T.O.R. Macdonald ◽  
J.S. Rowarth ◽  
F.G. Scrimgeour
Keyword(s):  
Qualitative Data ◽  
Management Practice ◽  
Dairy Farm ◽  
Environmental Compliance ◽  
Dairy Farmers ◽  
The Past ◽  
Farm Systems ◽  
The Cost ◽  
Farm System ◽  
Survey Approach

The link between dairy farm systems and cost of environmental compliance is not always clear. A survey of Waikato dairy farmers was conducted to establish the real (non-modelled) cost of compliance with environmental regulation in the region. Quantitative and qualitative data were gathered to improve understanding of compliance costs and implementation issues for a range of Waikato farm systems. The average oneoff capital cost of compliance determined through a survey approach was $1.02 per kg milksolids, $1490 per hectare and $403 per cow. Costs experienced by Waikato farmers have exceeded average economic farm surplus for the region in the past 5 years. As regulation increases there are efficiencies to be gained through implementing farm infrastructure and farm management practice to best match farm system intensity. Keywords: Dairy, compliance, farm systems, nitrogen, Waikato

An Evaluation of Raw Milk Microorganisms as Markers of On-Farm Hygiene Practices Related to Milking

2005 ◽  
Vol 68 (4) ◽  
pp. 764-772 ◽  
Author(s):  
M. L. HUTCHISON ◽  
D. J. I. THOMAS ◽  
A. MOORE ◽  
D. R. JACKSON ◽  
I. OHNSTAD
Keyword(s):  
Dairy Farm ◽  
Correlation Coefficients ◽  
Raw Milk ◽  
Hygiene Practices ◽  
Bacterial Indicator ◽  
Relative Standard ◽  
Bacillus Spp ◽  
On Farm ◽  
Milk Storage ◽  
Bacterial Groups

Dairy farm hygiene audits were undertaken at 24 farms during summer and winter and the results compared with transformed bacterial indicator levels in raw milk samples collected during each audit. The bacterial indicators measured were total viable counts, Escherichia coli, coliforms, Bacillus spp., Bifidobacteria spp., and Pseudomonas spp. The results of initial comparisons using Pearson product-moment correlation coefficients showed presumptive relationships between some bacterial groups and the subjective quantitative audit scores. When investigated further using linear regression, the presumptive relationships were found to be influenced by external factors. Possible reasons for the low correlations between on-farm hygiene and bacterial indicator counts in raw milk were further investigated. Measurements of the uncertainty associated with the bacteriological results were undertaken and revealed geometric relative standard deviations that ranged from 0.019 to 1.05. Toward the higher end of this scale, the uncertainty associated with the laboratory estimations of bacterial numbers may have been large enough to blur hygiene score-marker bacteria relationships. The samples obtained from on-farm raw milk storage tanks were representative of the whole tank contents and not a significant source of error. Although total bacterial counts are widely acknowledged by the milk industry as not always giving a true measure of on-farm hygiene during milking, we were unable to find any marker bacteria that showed consistently higher correlations and were thus better suited as indicators of on-farm hygiene.

scholarly journals Avena sativa AV25-T (Altoandina) Supplementation as Alternative for Colombia's High-Altitude Dairy Systems: An Economic Analysis

2021 ◽  
Vol 5 ◽  
Author(s):  
Karen Enciso ◽  
Javier Castillo ◽  
Luis Orlando Albarracín ◽  
Luis Fernando Campuzano ◽  
Mauricio Sotelo ◽  
...  
Keyword(s):  
High Altitude ◽  
Avena Sativa ◽  
Value At Risk ◽  
Production Costs ◽  
Grass Species ◽  
Dairy Farmers ◽  
Promising Alternative ◽  
Commercial Feed ◽  
Kikuyu Grass ◽  
Dairy Systems

In the Colombian high-altitude tropics (2,200–3,000 m.a.s.l.), Kikuyu grass (Cenchrus clandestinus) is the main feed source for the dairy system. This grass species has good characteristics regarding adaptability and productivity, but is affected by frost, grass bugs (Collaria spp.) and precipitation-related production seasonality. Forage deficits might thus be a problem at several times in a year. As a strategy to maintain production stable, dairy farmers use commercial feed concentrates increasing their production costs. Agrosavia, as a response to this, started in 2005 with the evaluation and selection of new forage species for the Colombian high-altitude tropics. The oat Avena sativa AV25-T was identified as promising alternative to supply the requirements of dry matter in times of deficit and released as cultivar in 2018 under the name Altoandina. The objective of this study was to evaluate the economic viability of Altoandina in Colombia's high-altitude dairy systems. Altoandina (Aa) was provided as silage in two different diets: 35%Aa−65% Kikuyu (Yellow Diet) and 65%Aa-35% Kikuyu (Red Diet). The diet for comparison was traditional grazing with 100% Kikuyu grass (Blue Diet). All diets were supplemented with 6kg commercial feed concentrate, 0.5 kg cotton seeds and 0.5 kg Alfalfa meal per cow/day, respectively. To estimate economic indicators, we used a cashflow model and risk assessment under a Monte Carlo simulation model. Including Altoandina incremented productivity per hectare by 82.3 and 220% in the Yellow and Red Diets, respectively. According to the results of our economic model, the Yellow Diet is the best alternative. Its average Net Present Value (NPV) was superior in >80% and showed a lower variability. The indicators Value at Risk (VaR) and probability (NPV < 0) show the Yellow Diet to have the lowest risk for economic loss under different yield/market scenarios. The Yellow Diet also has the lowest unit production costs and uncertainty of productive parameters. According to our findings, supplementation with Altoandina at 35%, i.e., during critical times, has high potential to improve efficiency and profitability. This information is key for the decision-making process of dairy farmers on whether to adopt this technology.

scholarly journals ECONOMIC ANALYSIS OF DIFFERENT IRRIGATION DEPTHS IN FORAGE SORGHUM CROPS

2020 ◽  
Vol 19 ◽  
pp. 12
Author(s):  
PAULO GLEISSON RODRIGUES DE SOUSA ◽  
THALES VINÍCIUS DE ARAÚJO VIANA ◽  
CLAYTON MOURA DE CARVALHO ◽  
JOSÉ DE PAULA FIRMIANO DE SOUSA ◽  
KILMER COELHO CAMPOS ◽  
...  
Keyword(s):  
Operating Cost ◽  
Daily Basis ◽  
Production Costs ◽  
Operating Profit ◽  
Federal Institute ◽  
Positive Indicators ◽  
Silage Production ◽  
Break Even Point ◽  
Education Science ◽  
Different Levels

The objective of this work was to evaluate the production costs and profitability indexes of sorghum crop for silage production under different irrigation depths. The work was conducted at the Federal Institute of Education, Science and Technology of Ceará (IFCE) – Umirim Campus, from September to December 2016. The treatments were arranged in 5 x 5 split plots with 5 replications. Irrigations were performed on a daily basis, and the applied depths were calculated based on crop evapotranspiration (ETc). The primary treatments were 50, 75, 100, 125 and 150% of ETc, associated with different levels of carnauba bagana mulch (0.00, 2.50, 3.75, 5.00, and 6.25 cm). Effective Operating Cost (EOC), Total Operating Cost (TOC), Gross Revenue (GR), Operating Profit (OP), Profitability Index (PI) and Break-Even Price (BEP) were estimated. According to the indicators analyzed, it was found that this is a promising crop within the different agricultural production schools, with favorable rates for the producer. The variety evaluated presents high resistance as to the water limitation factor, showing positive indicators such as break-even point below the average prices practiced in the region.

scholarly journals ECONOMIC ANALYSIS OF DIFFERENT IRRIGATION DEPTHS IN FORAGE SORGHUM CROPS

2020 ◽  
Vol 19 ◽  
pp. 12
Author(s):  
PAULO GLEISSON RODRIGUES DE SOUSA ◽  
THALES VINÍCIUS DE ARAÚJO VIANA ◽  
CLAYTON MOURA DE CARVALHO ◽  
JOSÉ DE PAULA FIRMIANO DE SOUSA ◽  
KILMER COELHO CAMPOS ◽  
...  
Keyword(s):  
Operating Cost ◽  
Daily Basis ◽  
Production Costs ◽  
Operating Profit ◽  
Federal Institute ◽  
Positive Indicators ◽  
Silage Production ◽  
Break Even Point ◽  
Education Science ◽  
Different Levels

The objective of this work was to evaluate the production costs and profitability indexes of sorghum crop for silage production under different irrigation depths. The work was conducted at the Federal Institute of Education, Science and Technology of Ceará (IFCE) – Umirim Campus, from September to December 2016. The treatments were arranged in 5 x 5 split plots with 5 replications. Irrigations were performed on a daily basis, and the applied depths were calculated based on crop evapotranspiration (ETc). The primary treatments were 50, 75, 100, 125 and 150% of ETc, associated with different levels of carnauba bagana mulch (0.00, 2.50, 3.75, 5.00, and 6.25 cm). Effective Operating Cost (EOC), Total Operating Cost (TOC), Gross Revenue (GR), Operating Profit (OP), Profitability Index (PI) and Break-Even Price (BEP) were estimated. According to the indicators analyzed, it was found that this is a promising crop within the different agricultural production schools, with favorable rates for the producer. The variety evaluated presents high resistance as to the water limitation factor, showing positive indicators such as break-even point below the average prices practiced in the region.

scholarly journals Foreign experience in the development of dairy cattle and directions of its use in domestic practice

2020 ◽  
pp. 36-46
Author(s):  
S. Shupyk
Keyword(s):  
Dairy Cattle ◽  
Milk Production ◽  
Financial Incentives ◽  
Dairy Farm ◽  
Raw Milk ◽  
Government Support ◽  
Small Scale ◽  
State Support ◽  
The Government ◽  
Small Scale Farmers

The article analyzes the support for the US market, where the government has allocated almost $ 22.2 billion for the development of dairy cattle. direct and indirect subsidies to the country's dairy sector (35.02 c/l), which is equivalent to 73% of farmers' milk sales, showed relatively high domestic support, export subsidies, conservation programs, risk management programs, disaster relief programs, loan programs, crop insurance, livestock support. Surveys to support the Indian market, which ranks second in the world in raw milk production (9.5%), have shown that almost 80% of small-scale farmers are small-scale farmers. Milk collection is carried out by 130 thousand dairy cooperatives. NABARD (National Bank for Agriculture and Rural Development) under DEDS, provides for subsidies of up to 25% of costs. China is investing heavily in the construction of large dairy farms and livestock complexes with up to 100,000 cows. The Australian market produces 9.3 million tonnes of milk, of which 36% is exported and is the world's fourth exporter of dairy products (6% of the world market). Australia's dairy cattle are characterized by a small amount of direct government support. During 2015-2016, agriculture received financial and commercial assistance over $ 147 million. US in the form of payments to farms. It has been established that price forecasting plays an important role in regulating the milk market in Australia, on the basis of which the profile Ministry, taking into account world prices, generates milk price indices. Analysis of milk production in Switzerland has shown that it remains highly subsidized. In 2013, state support for milk producers amounted to CHF 1.8 billion, incl. direct subsidies are estimated at 1.5 billion Swiss francs, which is 61 thousand Swiss francs per dairy farm, or 0.41 Swiss francs per 1 liter of milk. The state support system for dairy cattle in Canada has been found to include the following instruments: import tariffs that restrict dairy imports; minimum guaranteed prices for raw milk that are set at the maximum amount of milk sold to the dairies within the quota; a system of direct payments to farmers for milk production within the quota. The amount of direct payments per 1 liter of milk is set annually by the government. In order to support Canadian producers in technological modernization aimed at improving the efficiency of milk production, a dairy farm investment program (DFIP) is implemented with state support of $ 250 million. USA According to the Organization for Economic Co-operation and Development (OECD) in Iceland, Japan, Norway and Switzerland, the level of support for dairy producers exceeds on average 70% of the gross income of farmers, in Canada, the EU, Hungary, Korea and the USA the amount of support is 40-55%. An analysis of the support for the development of dairy cattle in the EU countries showed that the following instruments are allocated for these purposes: production restrictions (milk production quotas); government interventions and storage; Establishment of product sales regulations / regulations; the dairy package (including regulating contractual relations in the dairy sector); foreign trade (import regulations, export subsidies); government subsidies. It is found that the main factor that increases the profitability of dairy production in developed countries is the improvement of quality and differentiation of the range. Major factors contributing to the successful development of dairy cattle are increased government support and economical use of resources. Also used are a set of financial incentives, including reducing the tax burden. Key words: Livestock, milk market, domestic support, development programs, cooperation, financial incentives, subsidies, import tariffs, quotas.

scholarly journals Still ‘dairy farm fever’? A Bayesian model for leptospirosis notification data in New Zealand

2021 ◽  
Vol 18 (175) ◽  
pp. 20200964
Author(s):  
Jackie Benschop ◽  
Shahista Nisa ◽  
Simon E. F. Spencer
Keyword(s):  
New Zealand ◽  
Public Health Surveillance ◽  
Dairy Farm ◽  
Nucleic Acid Detection ◽  
Dairy Farmers ◽  
Occupational Groups ◽  
Specific Occupation ◽  
Health Surveillance Data ◽  
Notification Data ◽  
Important Evidence

Routinely collected public health surveillance data are often partially complete, yet remain a useful source by which to monitor incidence and track progress during disease intervention. In the 1970s, leptospirosis in New Zealand (NZ) was known as ‘dairy farm fever’ and the disease was frequently associated with serovars Hardjo and Pomona. To reduce infection, interventions such as vaccination of dairy cattle with these two serovars was implemented. These interventions have been associated with significant reduction in leptospirosis incidence, however, livestock-based occupations continue to predominate notifications. In recent years, diagnosis is increasingly made by nucleic acid detection which currently does not provide serovar information. Serovar information can assist in linking the recognized maintenance host, such as livestock and wildlife, to infecting serovars in human cases which can feed back into the design of intervention strategies. In this study, confirmed and probable leptospirosis notification data from 1 January 1999 to 31 December 2016 were used to build a model to impute the number of cases from different occupational groups based on serovar and month of occurrence. We imputed missing occupation and serovar data within a Bayesian framework assuming a Poisson process for the occurrence of notified cases. The dataset contained 1430 notified cases, of which 927 had a specific occupation (181 dairy farmers, 45 dry stock farmers, 454 meatworkers, 247 other) while the remaining 503 had non-specified occupations. Of the 1430 cases, 1036 had specified serovars (231 Ballum, 460 Hardjo, 249 Pomona, 96 Tarassovi) while the remaining 394 had an unknown serovar. Thus, 47% (674/1430) of observations had both a serovar and a specific occupation. The results show that although all occupations have some degree of under-reporting, dry stock farmers were most strongly affected and were inferred to contribute as many cases as dairy farmers to the burden of disease, despite dairy farmer being recorded much more frequently. Rather than discard records with some missingness, we have illustrated how mathematical modelling can be used to leverage information from these partially complete cases. Our finding provides important evidence for reassessing the current minimal use of animal vaccinations in dry stock. Improving the capture of specific farming type in case report forms is an important next step.

scholarly journals INVESTIGATING BARGAINING POWER OF FARMERS AND PROCESSORS IN IRAN'S DAIRY MARKET

2018 ◽  
Vol 51 (1) ◽  
pp. 126-141 ◽  
Author(s):  
ZEINAB SHOKOOHI ◽  
AMIR HOSSEIN CHIZARI ◽  
MAHDI ASGARI
Keyword(s):  
Bargaining Power ◽  
Expectation Maximization Algorithm ◽  
Raw Milk ◽  
Annual Data ◽  
Bargaining Model ◽  
Government Officials ◽  
Dairy Farmers ◽  
Bilateral Bargaining ◽  
Monte Carlo Expectation Maximization ◽  
Milk Market

AbstractThe farm-gate price of raw milk in Iran is determined annually in negotiations among representatives of dairy processors, milk producers, and government officials. This study estimates the average bargaining power of dairy farmers and processors, through applying the generalized axiomatic Nash approach in a bilateral bargaining model. We employ annual data from 1990 to 2013 to estimate econometric representation of a bilateral bargaining model using a Monte Carlo expectation maximization algorithm. Results imply a higher bargaining power of 0.69 for processors, compared with 0.31 for farmers. This asymmetry of bargaining power causes unequal allocation of gains in the milk market.

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