SMALL OR MEDIUM DAIRY FARMS IN ALBANIA?

Ylli BIOKU*1, Enkelejda SALLAKU1, Kujtim GJONI2, Agron KALO3

1

Agriculture and Envoirenment Faculty, Agricultural University of Tirana, 1000 Tirana, Albania, phone:+355 69 27 56 629, E-mail: bicokuy@yahoo.com, bicokuy@gmail.com
2

Agriculture and Food Directory, Elbasan, Albania, phone:+ 355 674019083 3 Agricultural Directory of Durres, Albania.
Corresponding and contact author e-mail: bicokuy@yahoo.com, bicokuy@gmail.com

ABSTRACT
The comparison of the performance of the small (2-5 cows) and medium (6-20 cows) sized dairy farms in central part of Albania were the objective of this study, as it is not done up to now from any institution. The annual farm income, the cost of milk production, and the problems faced by the farms were studied. During a period of 12 months were recorded data on milk production, farm expenses and returns for each farm on a monthly basis. In addition were collected data on using milking machine, artificial insemination, needs for training, fodder production, and feed bought in the market. The difference in milk yield between such farms is 6,4%. The annual incomes per farm (milk+meat sold) and for only milk for the small farms are 2066,35 Euro and 764,96 Euro respectively, while for the medium farms the results are 8784,85 Euro and 6080,37 Euro respectively. The cost of milk was for the small farms 0,281 Euro/liter and 0,267 for the medium ones. The small farms sells 80,03% of the milk production while the medium ones 87,9%. In both cases the fodder production and part of concentrate feed is produced in the farm however the small farms bought 470 kg/cow concentrate while the medium ones 647 kg/cow. All the farmers are asking for trainings and most of them needs training on how to prepare silage and good quality hay, as well as learning livestock good practices. Key words: dairy farm, farm income, income per cow, small and medium farms,

Introduction
During 2010, in Albania were operating 219,952 farms with cattle or 62,7% of all farms of the country (350,654 farms in total). The average cows per farm is 1.5 units. Only 14.5% (3188 unit) of the farms have more than 6 cows and they produce 20% of the total cow milk production (MAFCP 2010). Both studied districts (Durres and Elbasan) are breeding 10% of the cows population in Albania and the milk yield is 3120 kg/year compare with 2631 kg of the average of the country {ADD and ADE 2011). During the last decade is increased the number of the so-called medium size dairy farms owning 6- 20 cows. As little information is available on the economics of production on the small and medium size dairy farms, so the objective of this analyses was therefore undertaken to collect on farm data pertaining the revenues and expenses on both types

of farms and make an economic analysis. Another reason to study farms with more than six cows is the Instruments Pre-Accession and Rural Development-Like (IPARD) Program which will support such farms. This paper is presenting the findings and recommendations of the dairy farms analyses, in central part of Albania, which had been carried out during September 2011 till August 2012.

Materials and methods

Two hundred small and medium sized farms were monitored in central part of Albania Elbasan and Durres districts (100 per each district). Data collection lasted from September 2011 till August 2012. Small farms were defined as those having 2 to 5 cows and medium farms those having 6 or more cows. The medium farms were selected with 6-16 cows because the IPARD-Like Program that will start during autumn 2012 will support farms that are managing 6 or more cows. Data collection: Over a period of 12 months each farm was visited bi-monthly. The following data were recorded (according to the questionnaire prepared and tested): Income and expenses: (i) Incomes per Farm from sales of milk and meat (IpF milk+meat); (ii) Incomes per Farm from sales of milk (IpF milk); (iii) Incomes per Cow from sales of milk and meat (IpC milk+meat); (iv) Incomes per Cow from sales of milk (IpC milk); (v) Milk yield: the amount of milk produced by each cow during one lactation; (vi) Milk price per liter; (vii) Calves price per kg live bodyweight; (viii) Quantity of milk sold in the market or to the dairy processor (quantity and price); (ix) Expenses for the fodder production; (x) Expenses for the animal feed bought in the market; (xi) Expenses for veterinary service, including insemination; (xii) Expenses for fuel, electricity, water, trips, lease on land, and land tax; (xiii) Estimated cost of labor needed to take care of the herd per year. Technical data, such as: Insemination (artificial or natural mating); Milking (milking machine or by hand); Type of animal feed used (including microelements or premix); Animal health (diseases and parasites); Training needs.

Data analysis: A model was developed in Microsoft Excel program for data analysis, and statistical data processing was done with Statgraphics Centurion XVI.

Results and discussions

Data on number of cattle and cows, milk yield, Incomes per Farm (IpF milk + meat), IpF (milk), milk cost (Frank and Vanderlin 2001), the ratio milk quantity sold in the market vs total milk production, prices of milk and meat sold, the manner of milking the cows and method of insemination, are summarized in Table 1, as shown below: Table 1: Technical data Number of heads No of cattle per farm 4,21 12,15 No of Cows per farm (average) 3,12 10,03 Milk yield (liter) 4540,4 4830,6 IpF (milk+mea t) Euro 2066,35 8784,85 IpF (milk) Euro 764,96 6080,37 Milk cost (Euro/kg ) 0,281 0,267 Milk sold vs milk produced (%) 80,03% 87,9

2-4 cows 6+ cows

Number of heads

Price of milk sold (Euro) 0,38

Price of meat sold (Euro) 2,92

Milking By hand (%) 100 31 By machine (%) 0 69

Insemination Natural (%) 0 0 Artificial (%) 100 100

2-4 cows

6+ cows 0,406 2,95 Source: Data from the farm visits

Statgraphics Centurion XVI was used for statistical data processing {Small and medium farms IpF (milk+meat) vs. Number of cows/year; Small and medium farms IpF (milk) vs. Number of cows/year; and Small and medium farm Milk Cost (cent/Euro) vs. Milk Yield} and results are shown below:

Small farms
Plot of Fitted Model Income per farm (milk+meat) = 453.429 + 516.074*Number of cows (X 1000) 4
Income per farm (milk+meat)

Medium farms
Plot of Fitted Model Income per Farm (milk+meat) = -4640.24 + 1335.56*Numer of Cows (X 1000) 25

Income per Farm (milk+meat)

2 2.5 3 3.5 4 Number of cows 4.5 5

20 15

10 5 0 6 9 12 15 Numer of Cows 18 21

Fig. 1: Small and medium farms IpF (milk+meat) vs. Number of cows/year For the small farms: Income per farm (milk+meat) = 453.429 + 516.074*Number of cows. Since the P-value in the ANOVA table is less than 0.05, there is a statistically significant relationship between Income per farm (milk+meat) and Number of cows at the 95.0% confidence level. For the medium farms : Income per Farm (milk+meat) = -4640.24 + 1335.56*Number of cows. Since the P-value in the ANOVA table is less than 0.05, there is a statistically significant relationship between Income per Farm (milk+meat) and Number of cows at the 95.0% confidence level. Table 2: Comparison of IpF (milk + meat) medium farms vs IpF (milk+meat) small farms

Summary Statistics IpF (milk + meat) medium farms Count 100 Average 8784.87 Standard 4666.67 deviation Coeff. of 53.1217% variation Minimum 3434.0 Maximum 24710.0 Range 21276.0 Stnd. 5.15229 skewness Stnd. kurtosis 2.23789

frequency

IpF (milk+meat) small farms 100 2063.58 737.317 35.73% 705.0 3891.0 3186.0 0.526547 -1.21511

IpF (milk + meat) medium farms

50 30 10

10 30 50 -1 4 9 14 19 IpF (milk+meat) small farms 24 29 (X 1000)

The StatAdvisor. Table 2 shows summary statistics for the two samples of data. Of particular interest here are the standardized skewness and standardized kurtosis, which can be used to determine whether the samples come from normal distributions. Values of these statistics outside the range of -2 to +2 indicate significant departures from normality, which would tend to invalidate the tests which compare the standard deviations. In this case, an IpF (milk + meat) medium farm has a standardized skewness value outside the normal range. IpF (milk + meat) medium farms has a standardized kurtosis value outside the normal range. Small farms
Plot of Fitted Model IpF (milk) small farms = -86.1902 + 272.805*Number of Cows 2400 1900
IpF (milk) small farms

Medium farms
Plot of Fitted Model IpCow (milk) medium farms = 134.863 + 42.4583*Number of Cows 1000
IpCow (milk) medium farms

800 600

1400 900 400 -100 -600 2 2.5 3 3.5 4 Number of Cows 4.5 5

400 200 0 6 9 12 15 Number of Cows 18 21

Fig. 2: Small and medium farms IpF (milk) vs. Number of cows/year Small farms: IpF (milk) small farms = -86.1902 + 272.805*Number of Cows. Since the P-value in the ANOVA table is less than 0.05, there is a statistically significant relationship between IpF (milk) small farms and Number of Cows at the 95.0% confidence level. Medium farms: IpCow (milk) medium farms = 134.863 + 42.4583*Number of Cows. Since the P-value in the ANOVA table is less than 0.05, there is a statistically significant relationship between IpCow (milk) medium farms and Number of Cows at the 95.0% confidence level. Table 3: Comparison of IpF (milk) medium farms vs IpF (milk) small farms
Summary Statistics IpF (milk) medium farms 100 6080.37 IpF (milk) small farms 100 764.96

Count Average

Standard deviation Coeff. of variation Minimum Maximum Range Stnd. skewness Stnd. kurtosis

3915.32 64.3928% 501.0 19610.0 19109.0 4.31793 1.45316

654.633 85.5774% -567.0 2054.0 2621.0 -0.0841387 -1.44021

IpF (milk) medium farms

60 40 20
frequency

0 20 40 60 -2 2 6 10 14 IpF (milk) small farms 18 22 (X 1000)

The StatAdvisor. Table 3, shows summary statistics for the two samples of data. In this case, IpF (milk) medium farm has a standardized skewness value outside the normal range. Both standardized kurtosis values are within the range expected. Small farms Medium farms
Plot of Fitted Model Milk cost (Euro) = -1.28644 + 0.00161617*Milk yield per cow 40

Plot of Fitted Model Milk Cost (Euro) = 0.327755 - 0.0000125978*Milk Yield 0.39 0.35

Milk cost (Euro)

30

Milk Cost (Euro)

3400 4400 5400 Milk yield per cow 6400 7400

20

0.31

0.27 0.23

10

0.19 3600 4600 5600 Milk Yield 6600 7600

Fig 3. Small and medium farm Milk Cost (cent/Euro) vs. Milk Yield Small Farms : Milk cost (Euro) = -1.28644 + 0.00161617*Milk yield per cow. Since the P-value in the ANOVA table is greater or equal to 0.05, there is not a statistically significant relationship between Milk cost (Euro) and Milk yield per cow at the 95.0% or higher confidence level. Medium farms: Milk Cost (Euro) = 0.327755 - 0.0000125978*Milk Yield. Since the P-value in the ANOVA table is less than 0.05, there is a statistically significant relationship between Milk Cost (Euro) and Milk Yield at the 95.0% confidence level. Table 4: Comparison of Milk Yield medium farms vs Milk Yield small farms
Summary Statistics Milk Yield medium farms Count 100 Average 4830.59 Standard 758.359 deviation Coeff. of 15.6991% variation Minimum 3650.0 Maximum 6700.0 Range 3050.0 Stnd. skewness 2.45097 Milk Yield small farms 100 4540.4 661.73 14.5743% 3400.0 7000.0 3600.0 5.96783
Milk Yiled medium farms

20

10

frequency

10

20 3200 4200 5200 6200 Milk Yield small farms 7200

Stnd. kurtosis

-1.18138

6.09932

The StatAdvisor. Table 4, shows summary statistics for the two samples of data. In this case, both samples have standardized skewness values outside the normal range. Milk Yield small farms has a standardized kurtosis value outside the normal range. The results of table 1, shows that cows of medium farms have produces 290,2 kg (6,39%) more milk than the cows of small farms. The Income per Farm (milk+meat) in the medium sized farms 325% more than the small ones (8784,85 Euro vs. 2066,35 Euro) while the IpF (milk) of medium farm is 694,9% more than the small farms ( 6080,37 Euro vs. 764,96 Euro). These significant differences are coming as the result of milk yield, price of milk and meat sold, that are higher at medium sized farms compare with small sized ones. The IpF (milk) is several times higher at medium farms compare with small ones because several small ones are losing money from milk production but as a farm their balance is positive as it is compensate from meat production (sales of calves). The R-Squared statistic indicates that the model as fitted explains 33.9275% % of the variability in IpF (milk+meat) for the small sized farms and 90.0189% % of the variability of IpF for the medium sized farms. The correlation coefficient equals 0.582473 for small sized farms and 0.948783for the medium sized farms, indicating, respectively, a moderate and very strong relationship between the variables. While for the IpF (milk) the model as fitted explains 12.0266% % of the variability in the small sized farms and 85.3654% of the variability of the medium sized farms. The correlation coefficient equal 0.346794 for small sized farms and 0.923934 for the medium sized farms, indicating, respectively, a weak and moderate and very strong relationship between the variables. The small sized farms produce one liter of milk with 0,014 Euro/liter (or 5%) more than the medium sized farms. Since the P-value in the ANOVA table is greater or equal to 0.05, there is not a statistically significant relationship between Milk Yield and Milk Cost for the small farms while there is a statistically significant relationship for the medium farms. In addition the small sized farms are selling 80,03% of their production and the rest is used for the calves and for the home consumption, while the medium sized farms 87,9%. Most small farms are semi-subsistence households and they are selling up to 46% of milk production to milk processors (Schroder et al. 2010). These data of our study shows that medium sized farms had better results than the small sized farms for milk yield, production cost, incomes per farm and incomes per cow, and sales of milk and meat. In addition, the medium farms are selling their milk with higher price as their milk quality is better as most of them (69%) are using milking machine and the barns are much better than the small sized farms.

Conclusion
The economic results are much better for medium sized farms than for small sized farms however in other studies we need to consider the beef performance as farmers are using same components of feed for cows and calves.

This is the first study comparing small and medium sized farms and we suggest the same study to be conduct at least for six more districts of Albania where dairy farms are important. As 11% of the small sized farms have negative incomes for the milk production is a must of extension service to train farmers to keep the financial record separate for milk and meat production.

References
1. Agricultural Direcotry of Durres (ADD). (2011). Livestock Annual report (not published) Agricultural Direcotry of Elbasan (ADE). (2011). Livestock Annual report (not published) Frank, G., Vanderlin, J. (2001). Milk Production Cost in 2001 on Selected Wisconsin Dairy Farms, from http://cdp.wisc.edu/pdf/cop2001.pdf Ministry of Agriculture, Food and Consumer Protection-Albania (MAFCP). (2010). Agricultural Statistical Year Book Schrder,,E.,Urui,,M., Meo,M. (2010). Analysis of dairy sector. Prepared by the GTZ implementing EU - IPA 2008 - Project "Capacity Building for the Implementation of the Rural Development Strategy", Tirana, Albania

2.

3.

4.

5.