Determinants of downside risk exposure of dairy farms

Robert Finger*, Tobias Dalhaus, Joseph Allendorf, Stefan Hirsch

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

31 Citations (Scopus)


We investigate determinants of dairy producers' risk exposure using a unique combination of foci on (i) downside risks, (ii) a holistic representation of revenues from milk and animal sales, (iii) climatic extremes and (iv) the role of animal health. A sample of German dairy farms reveals that animal health and heat stress indicators influence mean and semi-variance of revenues. For instance, heat stress exposure reduces expected milk revenues significantly. In the case of animal health-related indicators, our results show trade-offs between expected revenues and downside risks. Furthermore, variabilities in revenues from milk and animal sales are significantly interrelated.

Original languageEnglish
Pages (from-to)641-674
JournalEuropean Review of Agricultural Economics
Issue number4
Publication statusPublished - Sept 2018
Externally publishedYes


  • animal health
  • climate extremes
  • dairy sector
  • production risk
  • stochastic multi-output production


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