Development of productivity of dairy and pig farms in Germany

The development and change of productivity, as well as of its influencing factors, is of interest in economic research. In this paper we analyse the development of productivity in dairy and pig farms in Germany. Balanced farm panels are selected from the German national FADN. As productivity measure we use the Färe-Primont Index proposed by O’Donnell. Results shows an increase of Total Factor Productivity (TFP) of 1% p.y. of dairy farms, a rather constant TFP level of pig fattening farms and decreasing TFP of farms specialized in piglet production. Due to cyclical pig prices the variation of TFP is rather high in pig farms. Significant scale effects are identified with highest TFP levels of large sized farms. The variation of income in time is much more pronounced than of TFP, which might partially be determined by the rather high aggregation of output and input variables used for FP calculations.