Organic Dairy Farms See Slower Productivity Growth Than Conventional

According to new data from USDA’s Economic Research Service, Organic dairy farm production growth is slower than conventional operations. Productivity is measured as total factor productivity, the ratio of the total amount of goods produced relative to all the inputs—such as labor, fertilizer, and other costs—used to produce those goods. USDA researchers studied the difference in total factor productivity growth between organic and conventional farms using data from organic dairy farms between 2005–2016 and from conventional dairy farms between 2000–2016.

Total factor productivity grew at an annual rate of 0.66% for organic dairy farms compared with 2.51% among conventional dairy operations.

Both organic and conventional farms saw productivity growth due to technological progress such as advanced equipment and improved genetics. While weather-related feed factors reduced productivity for organic farms, they contributed to a productivity growth for conventional dairy farms. Technical efficiency increased productivity slightly on organic farms, but reduced productivity on conventional farms, while scale-and-mix efficiency reduced productivity for both types of farms.

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