RESEARCH PAPER
EFFECTS OF PRODUCTION DIVERSIFICATION IN SPECIALISED DAIRY FARMS – CASE STUDY
 
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Zachodniopomorski Uniwersytet Technologiczny Szczecin
Publication date: 2017-12-11
 
Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics 2017;353(4):95–109
 
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ABSTRACT
Specialisation and concentration processes taking place in milk production cause major dependence of farms on the price situation on the market. One of the measures that farmers can take up to mitigate the income variability at the same time keeping the level of professionalisation is differentiation of agricultural production and gaining income from various farm activities. The analysis assessed the effects of horizontal diversification of model dairy farms. The research considered two methods of conducting live cattle production on a farm: keeping a dairy herd and own calves for fattening, and purchase of cattle for fattening. Both strategies assumed reduction of milk production on farms with simultaneous introduction of cattle fattening. The research took account of two scenarios of surrounding conditions. The first one assumes constant conditions of operation of farms in 2013 (excluding direct payments). The second one was based on forecasts of price changes in means of production and manufactured products. Results show that production diversification will bring lower family farm income and management income than in case of keeping high specialisation in milk production. The obtained results, moreover, show that higher profitability in case of production diversification may be true for fattening strategy of cattle from own production.