Assessment of feed and economic efficiency of dairy farms based on multivariate aggregation of partial indicators measured on field

Many of the metrics used to evaluate farm performance are only partial indicators of farm operations, which are assumed to be best predictors of the whole farm efficiency. The main objective of this work was to identify aggregated multiple indexes of profitability using common partial indicators that are routinely available from individual farms to better support the short-term decision-making processes of the cattle-feeding process. Data were collected from face-to-face interviews with farmers from 90 dairy farms in Italy and used to calculate 16 partial indicators that covered almost all indicators currently used to target feeding and economic efficiency in dairy farms. These partial indicators described feed efficiency, energy utilization, feed costs, milk-to-feed price ratio, income over feed costs, income equal feed cost, money-corrected milk, and bargaining power for feed costs. Calculations of feeding costs were based on lactating cows or the whole herd, and income from milk deliveries was determined with or without considering the milk quality payment. Multivariate factor analysis was then applied to the 16 partial indicators to determine simplified and latent structures. The results indicated that 5 factors explained 70% of the variability. Each of the original partial indicator was associated with all factors in different proportions, as indicated by loading scores from the multivariate factor analysis. Based on the loading scores, we labeled these 5 factors as "economic efficiency," "energy utilization," "break-even point," "milk-to-feed price," and "bargaining power of the farm," in decreasing order of explained communality. The first 3 factors shared 83% of the total communality. Feed efficiency was similarly associated with factor 1 (53% loading) and factor 2 (66% loading). Only factor 4 was significantly affected by farm location. Milk production and herd size had significant effects on factor 1 and factor 2. Our multivariate approach eliminated the problem of multicollinearity of partial indicators, providing simple and effective descriptions of farm feeding economics. The proposed method allowed the evaluation, benchmarking, and ranking of dairy herd performance at the level of single farms and at territorial level with high opportunity to be used or replicated in other areas.