The effect of cow longevity on dynamic productivity growth of dairy farming

Cow longevity is recognized as an important trait to improve farm economic performance while concurrently reducing environmental and social impacts. However, there is an economic trade-off between longevity and herd genetic improvement, which may influence the dairy farms’ efficiency and productivity growth over time. This study used a panel data of 723 Dutch specialized dairy farms over 2007-2013 to empirically measure the effect of longevity on dynamic productivity change and its components. First, the productivity growth estimates were obtained using the Luenberger dynamic productivity indicator. Then, the estimates were regressed on longevity and other explanatory variables using dynamic panel data model. Results show that the average dynamic productivity growth was 1.1% per year, comprising of technical change (0.5%), scale inefficiency change (0.4%) and technical inefficiency change (0.2%). Longevity is found to have a statistically significant positive association with productivity growth and technical change, implying that farms with more matured cows were also those farms that recorded increased productivity through technical progress. However, it has a negative association with technical inefficiency change, which might follow from the reduced milk productivity of old cows per unit of inputs used. Dutch dairy farms have a potential to raise productivity growth by reducing technical inefficiencies associated with input utilization.