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Benchmarking Cost of Milk Production in 46 Countries

Author

Listed:
  • Torsten Hemme
  • Mohammad Mohi Uddin
  • Oghaiki Asaah Ndambi

    (IFCN Dairy Research Center at the University of Kiel, Germany)

Abstract

The global dairy industry is facing challenges due to the extremely volatile milk price and a substantial increase of feed prices. The goal of this study, therefore, was to compare and benchmark the cost of milk production in 46 countries representing 87% of the world's total milk production, using a standard method developed by the International Farm Comparison Network (IFCN). Two typical farms were selected per country; one average-sized and one larger farm. The cost of milk production in 2010 ranged from 16.91US-$/100kg Energy Corrected Milk (ECM) in Armenia to 97.27 US-$/100kg ECM in Switzerland, with cost differences mainly driven by the diversity in farming and feeding systems. Based on costs, world regions were categorized into four levels: 40-50 US-$ in the EU, Middle East and China; 30-40 US-$ in the USA, Brazil, CEEC and Oceania; 60 US-$ in Austria, Norway, Switzerland and Canada. The major drivers for this variation were ranked as; purchased feed cost (the highest) followed by labor, land and machinery costs. Regression analyzes showed that costs were highly correlated milk yield and milk price but not to herd size.

Suggested Citation

  • Torsten Hemme & Mohammad Mohi Uddin & Oghaiki Asaah Ndambi, 2014. "Benchmarking Cost of Milk Production in 46 Countries," Journal of Reviews on Global Economics, Lifescience Global, vol. 3, pages 254-270.
    • Handle: RePEc:lif:jrgelg:v:3:y:2014:p:254-270
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    Citations

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    Cited by:

    1. Rodica Chetroiu & Ana Elena Cișmileanu & Elena Cofas & Ionut Laurentiu Petre & Steliana Rodino & Vili Dragomir & Ancuța Marin & Petruța Antoneta Turek-Rahoveanu, 2022. "Assessment of the Relations for Determining the Profitability of Dairy Farms, A Premise of Their Economic Sustainability," Sustainability, MDPI, vol. 14(12), pages 1-17, June.
    2. Anne Wairimu Mwangi & Ndung’uKabare & Kenneth Wanja, 2018. "Efficiency of Knowledge Inflow Structures: The Mediation Effect of Task Environment Analysis," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 7(4), pages 44-57, October.
    3. Huysveld, Sophie & Van Meensel, Jef & Van linden, Veerle & De Meester, Steven & Peiren, Nico & Muylle, Hilde & Dewulf, Jo & Lauwers, Ludwig, 2017. "Communicative farm-specific diagnosis of potential simultaneous savings in costs and natural resource demand of feed on dairy farms," Agricultural Systems, Elsevier, vol. 150(C), pages 34-45.
    4. Hillen, J., 2018. "Protecting the Swiss milk market from foreign price shocks: Public border protection vs. quality differentiation," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276015, International Association of Agricultural Economists.

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