Production intensification and animal health expenditure on dairy farms in New Zealand

Abstract

Although previous studies have investigated the effects of production intensification on farm economic performance and production efficiency in the dairy sector, knowledge is currently lacking on how intensification is related to farmer activities directed toward animal health outcomes. This study addresses the gap in the literature. A fixed-effects model estimated with a panel data set from New Zealand dairy farms is used to analyze the relationship between feed use intensification and animal health expenditure, controlling for a range of confounding effects. The empirical results show that, on average, feed use intensification is associated with a statistically significant increase in health expenditure per cow, and the positive effect is due primarily to the expenditure patterns of the farmers who have adopted the most intensive farming systems. The results also indicate that profitability, as measured by cash surplus, did not appear to be significantly related to the level of animal health expenditure on New Zealand dairy farms between 2005 and 2014.

Keywords: New Zealand; dairy farm; health expenditure; production intensification.