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Abstract

This paper investigates the effects of dairy herd’s genetic level and milk quality on the technical efficiency (TE) of Estonian dairy farms in 2012. A two-stage approach was used that combined data envelopment analysis (DEA), for finding the TE scores, and Tobit regression, for estimating the effects of the chosen variables on farm TE. Our results indicate that relative breeding value for milk production, which is a measure of herd’s genetic level, has a positive effect on farm TE. Milk quality affects TE also positively: higher somatic cell counts decreased and higher content of milk solids increased farm TE.

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