Die Bodenkultur - Journal for Land Management, Food and Environment

Leopold Kirner, Karl M. Ortner, Josef Hambrusch:

Using technical efficiency to classify Austrian dairy farms


Dairy farms in Austria are small, and 70 per cent of them are located in mountain areas. Their ability to stay in business increasingly depends on their competitiveness. We estimate technical efficiencies (TE) of 222 specialised dairy farms using Data Envelopment Analysis (DEA). As a result, only 16 per cent of the farms in the sample were fully efficient. TE represents a unique dimension to characterise these farms, along with size, natural disadvantage and the age of the farm manager. A cluster analysis based on factor scores reveals that up to 60 per cent of the sample dairy farms are either too inefficient or too small to ensure their economic viability in the future.

Key words: DEA, technical efficiency, dairy farms, cluster analysis, farm income.