Precision livestock agriculture and productive efficiency: The case of milk recording in Ireland

Abstract

Abstract This article investigates the effect of precision livestock agriculture and, in particular, milk recording, on the productive efficiency of Irish dairy farms. We use a micropanel of farms that covers the period 2008–2017 and a dynamic stochastic frontier (DSF) model to account for the dependence of efficiency on past values. This allows us to distinguish between short‐ and long‐run effects of precision livestock agriculture practices on technical efficiency (TE). We provide evidence that the Irish dairy sector experienced fast productivity growth in the period covered by the data, which was achieved mostly through technical change (TC) and efficiency improvements, but not due to scale effects (SEs) at the farm level. Furthermore, our results show that precision livestock agriculture in the form of milk recording contributed to a more efficient use of resources. Specifically, use of milk recording is found to affect positively TE in both the short and long run. Finally, we provide policy implications and directions for future research.