A.G.J.M. Oude Lansink

Performance indicators in agri-food production chains

The last decade has seen an increasing interest in indicators of supply-chain performance. A large number of various performance indicators have been used to characterize supply chains, ranging from highly qualitative indicators like customer or employee satisfaction to quantitative indicators like return on investments. This large number of different performance indicators, and the lack of consensus on what determines performance of supply chains, complicates the selection of performance measures. Furthermore, combining these indicators into one measurement system proves to be difficult. Efforts as well as progress have been made in this area but supply-chain performance measurement received little or no attention in the field of food and agribusiness. This paper provides a literature review on existing performance indicators and models, and discusses their usefulness in agri-food supply chains. Furthermore, based on this overview, a conceptual framework is developed for further research in this area.

Non-separability and heterogeneity in integrated agronomic-economic analysis of nonpoint-source pollution

This paper highlights two aspects that are crucial in the management of agricultural nonpoint-source pollution but that are typically not taken into account in applied economic studies. Firstly, production, pollution and abatement are to be treated as non-separable to include control options provided by changes in production practices. Besides, non-separability enables proper account to be taken of the material flow through production processes and changes the perspective on optimal environmental regulations. Secondly, the resolution or level of spatio-temporal aggregation should capture the heterogeneity in the economic and ecological attributes (production condition, fixed but allocatable inputs and technology set) of the individual decision-makers policies they intend to influence. The implications of non-separability and heterogeneity for empirical studies and for policy are illustrated by two simulation studies on nitrogen and pesticide use in crop farming.

Comparing technical efficiency of farms with an automatic milking system and a conventional milking system

Changing from a conventional milking system (CMS) to an automatic milking system (AMS) necessitates a new management approach and a corresponding change in labor tasks. Together with labor savings, AMS farms have been found to have higher capital costs, primarily because of higher maintenance costs and depreciation. Therefore, it is hypothesized that AMS farms differ from CMS farms in capital:labor ratio and possibly their technical efficiency, at least during a transition learning period. The current study used actual farm accounting data from dairy farms in the Netherlands with an AMS and a CMS to investigate the empirical substitution of capital for labor in the AMS farms and to determine if the technical efficiency of the AMS farms differed from the CMS farms. The technical efficiency estimates were obtained with data envelopment analysis. The 63 AMS farms and the 337 CMS farms in the data set did not differ in general farm characteristics such as the number of cows, number of hectares, and the amount of milk quota. Farms with AMS have significantly higher capital costs (€12.71 per 100 kg of milk) than CMS farms (€10.10 per 100 kg of milk). Total labor costs and net outputs were not significantly different between AMS and CMS farms. A clear substitution of capital for labor with the adoption of an AMS could not be observed. Although the AMS farms have a slightly lower technical efficiency (0.76) than the CMS farms (0.78), a significant difference in these estimates was not observed. This indicates that the farms were not different in their ability to use inputs (capital, labor, cows, and land) to produce outputs (total farm revenues). The technical efficiency of farms invested in an AMS in 2008 or earlier was not different from the farms invested in 2009 or 2010, indicating that a learning effect during the transition period was not observed. The results indicate that the economic performance of AMS and CMS farms are similar. What these results show is that other than higher capital costs, the use of AMS rather than a CMS does not affect farm efficiency and that the learning costs to use an AMS are not present as measured by any fall in technical efficiency.

Increasing the revenues from automatic milking by using individual variation in milking characteristics

The objective of this study was to quantify individual variation in daily milk yield and milking duration in response to the length of the milking interval and to assess the economic potential of using this individual variation to optimize the use of an automated milking system. Random coefficient models were used to describe the individual effects of milking interval on daily milk yield and milking duration. The random coefficient models were fitted on a data set consisting of 4,915 records of normal uninterrupted milkings collected from 311 cows kept in 5 separate herds for 1 wk. The estimated random parameters showed considerable variation between individuals within herds in milk yield and milking duration in response to milking interval. In the actual situation, the herd consisted of 60 cows and the automatic milking system operated at an occupation rate (OR) of 64%. When maximizing daily milk revenues per automated milking system by optimizing individual milking intervals, the average milking interval was reduced from 0.421 d to 0.400 d, the daily milk yield at the herd level was increased from 1,883 to 1,909 kg/d, and milk revenues increased from euro498 to euro507/d. If an OR of 85% could be reached with the same herd size, the optimal milking interval would decrease to 0.238 d, milk yield would increase to 1,997 kg/d, and milk revenues would increase to euro529/d. Consequently, more labor would be required for fetching the cows, and milking duration would increase. Alternatively, an OR of 85% could be achieved by increasing the herd size from 60 to 80 cows without decreasing the milking interval. Milk yield would then increase to 2,535 kg/d and milk revenues would increase to euro673/d. For practical implementation on farms, a dynamic approach is recommended, by which the parameter estimates regarding the effect of interval length on milk yield and the effect of milk yield on milking duration are updated regularly and also the milk production response to concentrate intake is taken into account.

Investment decision making in Dutch greenhouse horticulture

Panel data from Dutch horticultural firms over the period 1986-1998 were used to analyse the effects of different factors on investment decisions. The factors analysed relate to the firm operator and his family, the firm structure and the economic environment. Results show that firm-operator and firm-family related characteristics play an important role in investment decision making. Moreover, variables that indicate the ability of the firm to attract debt capital and fulfil financial obligations, like firm size, solvency and net firm result, have a positive impact on investment decisions.

Economic potential of individual variation in milk yield response to concentrate intake of dairy cows

The objectives of the current study were to quantify the individual variation in daily milk yield response to concentrate intake during early lactation and to assess the economic prospects of exploiting the individual variation in milk yield response to concentrate intake. In an observational study, data from 299 cows on four farms in the first 3 weeks of the lactation were collected. Individual response in daily milk yield to concentrate intake was analysed by a random coefficient model. Marked variation in individual milk yield response to concentrate intake was found on all four farms. An economic simulation was carried out, based on the estimated parameter values in the observational study. Individual optimization of concentrate supply is compared with conventional strategies for concentrate supply based on averaged population response parameters. Applying individual economic optimal settings for concentrate supply during early lactation, potential economic gain ranges from €0·20 to €2·03/cow/day.

A multi-level hierarchic Markov process with Bayesian updating for herd optimization and simulation in dairy cattle

Herd optimization models that determine economically optimal insemination and replacement decisions are valuable research tools to study various aspects of farming systems. The aim of this study was to develop a herd optimization and simulation model for dairy cattle. The model determines economically optimal insemination and replacement decisions for individual cows and simulates whole-herd results that follow from optimal decisions. The optimization problem was formulated as a multi-level hierarchic Markov process, and a state space model with Bayesian updating was applied to model variation in milk yield. Methodological developments were incorporated in 2 main aspects. First, we introduced an additional level to the model hierarchy to obtain a more tractable and efficient structure. Second, we included a recently developed cattle feed intake model. In addition to methodological developments, new parameters were used in the state space model and other biological functions. Results were generated for Dutch farming conditions, and outcomes were in line with actual herd performance in the Netherlands. Optimal culling decisions were sensitive to variation in milk yield but insensitive to energy requirements for maintenance and feed intake capacity. We anticipate that the model will be applied in research and extension.

Scenarios for a future dairy chain in the Netherlands

Abstract The objective of this study was to assess qualitatively, through a participatory approach, the potential for increasing the value added in the Dutch dairy production chain. A workshop involving stakeholders and experts in the Dutch dairy sector developed three scenarios, envisioned according to the strategic interests of the dairy chain in the Netherlands. These scenarios address major trends including changing consumer preferences, increasing pressure for more cost-efficient production, and rising environmental concerns. The scenarios indicate different directions in which the dairy chain in the Netherlands might develop in the next 5 to 20 years. The first scenario envisions the prevalence of producing differentiated raw milk with enhanced health or improved manufacturing properties. The second scenario envisions a dairy chain that is reduced to producing fresher and more individually customized dairy products with improved shelf life. The third scenario envisions ecologically sustainable dairy farming with improved animal welfare. These scenarios show that when improving the dairy sector it is important to consider the entire chain, and hence concerted and co-ordinated actions by the various stakeholders are necessary. Further studies quantifying the consequences of different scenario settings are necessary.

Effects of milk fat composition, DGAT1, and SCD1 on fertility traits in Dutch Holstein cattle

Recently, selective breeding was proposed as a means of changing the fatty acid composition of milk to improve its nutritional quality. Before implementing such breeding objectives, effects on other economically important traits should be investigated. The objectives of this study were to examine 1) the effect of milk fat composition, and 2) the effect of polymorphisms of DGAT1 and SCD1 genes on female fertility in commercial Dutch Holstein-Friesian cattle. Data on 1,745 first-lactation cows were analyzed by fitting linear mixed models. We found that higher concentrations of trans fatty acids within total milk fat negatively affected reproductive performance. Furthermore, results suggested a potential effect of the DGAT1 polymorphism on nonreturn rates for insemination 28 and 56 d after the first service. Our results can be used to assess the correlated effects of breeding for improved milk fat composition on reproduction, thereby allowing for better evaluation of breeding programs before implementation.

Mid-term financial impact of animal welfare improvements in Dutch broiler production

This study used a stochastic bioeconomic simulation model to simulate the business and financial risk of different broiler production systems over a 5-yr period. Simulation analysis was conducted using the @Risk add-in in MS Excel. To compare the impact of different production systems on economic feasibility, 2 cases were considered. The first case focused on the economic feasibility of a completely new system, whereas the second examined economic feasibilities when a farm switches from a conventional to an animal welfare-improving production system. A sensitivity analysis was conducted to assess the key drivers of economic feasibility and to reveal systematic differences across production systems. The study shows that economic feasibility of systems with improved animal welfare predominantly depends on the price that farmers receive. Moreover, the study demonstrates the importance of the level and variation of the price premium for improved welfare, particularly in the first 5 yr after conversion. The economic feasibility of the production system increases with the level of welfare improvements for a sufficiently high price level for broiler meat and low volatility in producer prices. If this is not the case, however, risk attitudes of farmers become important as well as the use of potential risk management instruments.