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In examining economic performance of dairy sector, technical and economic efficiency are the most frequently applied concepts. This research is based on data for 20 dairy farms across Province of Vojvodina in 2003. Technical efficiency is measured in terms of cows per worker equivalent (2.400 hours per year). Economic efficiency is measured in terms of cost efficiency by means of cost control ratios, which are separately calculated for: feed, labor and total cost. Dairy farms with 40 and more cows in herd are more technically efficient then smaller farms. Results showed that only two of twenty farms were economically inefficient. Cost control ratios reveal a farm’s ability to convert input cost into dairy sales. Farms with bigger herd size, more then 30 cows, have in average significantly smaller ratio and therefore, the more cost efficient dairy operations.


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