Investigation the impact of management, size and herd combination of Holstein dairy farms on economic efficiency : (case study of Tehran province Holestein dairy farms)

Dairy farm industry plays an important role in milk production in Iran. So, today dairy farms produce more than half of national milk and the industrial dairy farms are the main producers. The average growth rate of milk production in Iran in 1379-82 priod was 4 percent that which was more than world growth rate of milk production for the same period. But the main part of this was due to horizental growth (increase in animal population) and only small part of that was due to increase in producton efficiency. With respect to constraint of production reasurces his type of growth is not rational and ideal. Today About 10 percent of Iranian holestin dairy farms have a good management and produce 25-35 kg milk per cow, daily. There are many farms that because of lack of financial ability and management weekness can not produce up to potential capacity compeletly, or exit dairy farming. Investores and experts are not interested in agriculture sectore because of lower return than other economic sectores. Also, more competion production associated with governmental economic adjustment policies, gradually reduction or even eleminate the production subsidies and the probability of entrance of Iran into world trade organization (WTO) increase, the necessity of preparation of profitable condition and production with lower cost. With respect to this necessity, the main purpus of this study is determination of the impact of management factors, size and herd combination on economic return of dairy farms. For this purpuse, farms profitability indices, return on asset, return on equity, total revenue- total cost ratio and profit per cow was calculated using data and information gathered from 57 shahriar holestin dairy farms. Ordinary least squars (OLS) regressions was used to measure the effects of management, production, risk and farm variables on profitability indices. Also after using cluster analysis for classifying dairy farms into "successful"and "less successsful"groups and using consistency test for cluster analysis results, in grouping according different indices, logit regression was used to investigate the impact of each independent variable on probability of success and identifing variables that differentiate"successful"dairy farms from "less successsful"ones. Emprical results of OLS regression and logit model showed, cow productivity, feed productivity, percent of using of potential capacity, milk price stability of herd combination, operator`s experimaent and educational level had possitive effect on profitability. Also, results implied on negative effect of production diversification index, bank credits and operator`s age on profitability. Using modern technologies, veterinarian and animal husbandaery experts services are known as very important factors in explaninig profitability variation among dairy farms. So that, according to results of logits models, these variables increase dairy farms succeccful probability around, 14.31 and 8.8 percent respectively. Results of TC TR profitability and long-run averagr cost function showed that profit and average cost of per unit of produced milk is affected by farm size and constant return to scale structure is rejected in this industry, in other hand, the nature of average cost curve is u shaped which respect to this condition, an economic optimum size of operation can be determuned for this industry. In this study the point of minimal efficient scale, that is, the smallest output levelat which average cost curve reaches its minimum value (economic output level) is 394 milking cows. Extention the size of dairy farms to determined optomal size, Using veterinarian and animal husbandaery experts services and improvement of modern technologies (especially herd improvement and applying software in dairy farm management) and extention of calf- retained for compeletly using of their potential capacity and reducing incom risk is suggested.