Factors influencing the long-term competitiveness of commercial milk producers: evidence from panel data in East Griqualand, South Africa

This study investigates factors influencing the long-term competitiveness of 11 commercial milk producers from East Griqualand (EG), South Africa using unbalanced panel data for the period 1990 to 2006. Results of a ridge regression analysis show that dairy herd size, the level of farm debt, annual...

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Bibliographic Details
Published inAgrekon Vol. 49; no. 1; pp. 80 - 101
Main Authors du Toit, J.P, Ortmann, Gerald F, Ramroop, S
Format Journal Article
LanguageEnglish
Published 31.03.2010
Edition346
SeriesNo.1
Volume 49
Subjects
Commercial milk production
competitiveness
panel data
Production Economics
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Summary:This study investigates factors influencing the long-term competitiveness of 11 commercial milk producers from East Griqualand (EG), South Africa using unbalanced panel data for the period 1990 to 2006. Results of a ridge regression analysis show that dairy herd size, the level of farm debt, annual production per cow, technology and policy changes over time, and the ratio of trading income to total milk income influence the long-term competitiveness of these milk producers. To enhance their competitiveness in a deregulated dairy market, relatively small and profitable EG milk producers should consider increasing their herd sizes, as the importance of herd size in explaining competitiveness suggests that size economies exist. All EG milk producers should consider utilising more pasture- and forage-based production systems to lower feed costs and select dairy cattle of superior genetic merit to improve milk yields on pasture.
DOI:10.22004/ag.econ.61998