Influence of stock size on profitability of milk production

Many opinions of the effects of stock size on the profitability of agricultural production and mainly of milk production occur in the special literature. Opinions reach from denying the advantages of farm or stock size up to statements of considerably positive effects of size structure. Frequently considerable size advantages are substantiated on the basis of calculations made under idealized conditions. Actual results demonstrating the effect of different stock sizes are only limited and refer mostly to situations in the United States and may, therefore, not be applied without reserve to our conditions. Actual results obtained in the free State of Saxe show only little differences in the economic result due to stock sizes in milk production. If one regards the accounting results there seems to be an advantage in favour of larger enterprises. However, this advantage is due mainly to the smaller allowances for depreciation which are first of all the result of the historical development of the enterprises and which, therefore, are only to a limited extent attributable to stock size. Analyses of farm-collected data of milk production in Saxe show only little advantages in favour of large milk production units. The advantages centre on fixed charges and here mainly on personnel expenses and depreciation. - On the basis of the actual results obtained in Saxe, great advantages of larger stocks, as shown in the special literature, cannot be confirmed. The results illustrate that management practice of the individual farm exerts a greater influence on the operating result than stock size. - The agrarian policy's task must be the safeguarding of developmental opportunities for all forms of law and all farm and stock sizes. These prerequisites only will bring about structural changes enabling reasonable and durable farm and stock sizes as well as types of farming to be developed to face the international competition.