Cost analysis and technical efficiency of dairy cattle farms: a case study of Artvin, Turkey

In this study, cost analysis and technical efficiency was performed for dairy cattle farms in Artvin province of Turkey, milk production costs were calculated and the factors influencing milk production were identified. Technical efficiency scores of dairy farms were also calculated with Data Envelopment Analysis (DEA). Research data were gathered through the questionnaires with 118 dairy cattle farms selected through random sampling method. Total production costs per farm was calculated as 17 557.64 USD and 57.76% of such a sum was constituted by variable costs and 42.24% by fixed costs. The average cost of 1-liter milk was calculated as 0.32 USD. Of average active capital of the dairy cattle farms, 61.27% was composed of operational capital and 38.73% was composed of land capital. Economic rentability was 39.44%, financial rentability was 39.50% and rentability factor was 67.94%. Of milk production costs, 57.76% was composed of variable costs. According the DEA, average efficiency scores of dairy farms was identified as 65.00%. The Tobit analysis performed to put forth the relationships between DEA efficiency scores and socio-economic variables of the dairy farms revealed that inefficiency scores increased with increasing herd sizes.