Milk, money, muck and metrics: inefficient resource allocation by New Zealand dairy farmers

Dairy producers have focused on increasing production and ignored the implications this may have on resource allocation efficiency. Averaged comparative figures are used to justify the production message but these cannot distinguish the point at which diminishing profitability from additional inputs will occur. Resource allocation using Linear Programming allows the effects of a simultaneous variation in resources to be revealed. Dairy production profitability is optimised where technical and biological efficiency combine to provide the best economic and coincidentally, environmental outcomes.