Benchmarks in milk-producing systems: An application of data envelopment analysis (DEA)

Abstract

Current paper determines reference indexes of dairies in the Agreste region of the state of Pernambuco, Brazil, and proposed benchmark models for inefficient farms. Production operational costs and Data Envelopment Analysis (DEA) comprised the methodology used. Results show that producers failed to cover costs at medium and long term periods and were impacted by depreciation and familiar manpower, while investments were equal to high capital rates. Farms 4 and 7 had the best rates and farms 46, 115, 94, 96 and 67 had respectively the worst references for inefficient products. The true characterization of milk-producing systems reveals reference indexes when common factors to production systems are taken into account and may be associated to production efficiency.