Economic impacts of strategy selection in Austrian dairy farming: an empirical assessment.

In order to cope with changes in agricultural policy and an increasing volatility in agricultural input and output markets, dairy farmers might select certain strategies regarding external input use to increase competitiveness. The selection of one strategy has different impacts on economic farm performance under different prices. The objective of this paper is to identify such strategies in an agricultural bookkeeping dataset and assess economic impacts of a low-input strategy selection under volatile prices situations. We use data from 509 specialised dairy farms and apply cluster analysis and direct covariates matching. The cluster analysis can identify one low-input cluster with low levels of input use and three clusters with higher input levels. Those clusters differ in site conditions, farm size and milk production but have similar farm income. The results indicate that low-input farms are less depending on external markets and volatile input price markets and competitive with high-output farms. 1.