Livestock Production Systems and Technical Inefficiency of Feedlot Cattle Farms in Thailand

Abstract

The primary purpose of this study is to measure and investigate factors affecting technical inefficiency of feedlot cattle farms in Thailand. This study applies a stochastic frontier production function approach to measure farm-specific technical inefficiency using the 2004 farm-level cross-sectional survey data of Thai feedlot cattle farms in a single estimation technique applying the maximum likelihood estimation method. The non-negative technical inefficiency effects are modeled as a function of farm-specific socio-economic and production management factors. The empirical results suggest two important findings. First, there is confirmation that producer’s education and experience, belonging to farmer groups, the number of farm visits per year, farm size, the difference in concentrated feed used, rough feed and the considerable variability of cattle shelters have influenced the technical inefficiency of cattle farms. Second, producer’s age and the considerable variability of cattle breeds do not have different impacts on technical inefficiency in Thai cattle production in different farms.