Productivity versus area

The growth dilemma of the Uruguayan dairy sector

Abstract

The objective of this study was to analyze the development dynamic of the Uruguayan dairy farms in the last decade integrating country, experimental and commercial databases. A large commercial dairy farm database was segmented into four groups according to productivity and growth rate (PGR) during the fiscal years 2015/2016 to 2021/2022. Productivity growth rate was calculated as: PGR = (P2122/P1516)^1/6-1, where: P2122 = productivity fiscal year 2021/22, and P1516 = productivity fiscal year 2015/2016. The PGR groups were defined as: negative (NPGR; PGR < 0% per year), low (LPGR; 0 ≤ PGR < 3%), medium (MPGR; 3 ≤ PGR ≤ 6%) and high productivity growth rate (HPGR; PGR ≥ 6%). A mixed model was used to evaluate productivity slope heterogeneity with fiscal year as a continuous variable, PGR group as categorical and their interaction. Farms that were able to increase productivity (M and H PGR) had higher mean productivity, pasture DMI and margin over feed cost vs. the less dynamic systems (N and L PGR). Larger changes in productivity (+64 and +27% for H and M PGR, respectively) were likely primarily due to changes in stocking rate (+20 to 30%) and in individual cow milk production (+10 to 20%). Production systems that increased productivity relied on increasing stocking rate and individual milk production based on more home-grown forage consumption. However, higher PGR was linked to lower initial values of productivity, which suggests decreasing returns as the dairy farms reached higher milk yields and forage DMI.