PRODUCTION COSTS OF FINNISH DAIRY FARMS IN THE 2000S

The development of production costs in dairy farms in 2000-2011 was studied with a linear mixed model taking into account farm-level information (location, economic size, number of cows) and time effect. The results indicate that the unit cost increased over time and decreased as the number of cows and farm size increased and to compensate annual unit cost increase farms should be expanded with two cows every year. Small farms had higher unit cost and annual variation than medium-sized and large farms. Finnish dairy farms have developed fast and the benefits of scale may not have yet been accomplished.