The Cost Function Structure of Dutch Dairy Farms: Effects of Quota abolition and Price Volatility

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Abstract

This paper investigates potential impacts on milk production of Dutch dairy farms if feed prices increase, milk prices decrease and milk quotas are abolished. A quadratic cost function is estimated using panel data on individual dairy farms of the Dutch FADN. Marginal costs and revenues are evaluated to show the heterogeneous farm-level impact of changing prices on potential production developments. The main finding is that potential increases in milk production when quota are abolished, are offset by a decreasing marginal revenue due to lower milk prices, and increasing marginal costs due to higher feed prices.
Original languageEnglish
Publication statusPublished - 2012
Event126th Seminar EAAE: New challenges for EU agricultural sector and rural areas. Which role for public policy? -
Duration: 27 Jun 201229 Jun 2012

Seminar

Seminar126th Seminar EAAE: New challenges for EU agricultural sector and rural areas. Which role for public policy?
Period27/06/1229/06/12

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    Samson, G. S., Gardebroek, C., & Jongeneel, R. A. (2012). The Cost Function Structure of Dutch Dairy Farms: Effects of Quota abolition and Price Volatility. Paper presented at 126th Seminar EAAE: New challenges for EU agricultural sector and rural areas. Which role for public policy?, . http://purl.umn.edu/125956