Industry Versus On-Farm Rates of Change: Australian Dairy Farming During the 1970's

The Australian dairy industry has been under severe economic pressure in the past decade. In adjusting to this, the industry has undergone a substantial decline in the number of farms and in production. As in other declining industries, the time path of average farm characteristics reflects not only changes made to continuing farms (on-farm rates of change) but also the changing mix of farms, especially if exits from the industry involve large numbers of atypical farms. This article demonstrates how, for the Australian dairy industry, these two processes have combined to generate rates of change in the industry "average" farm, and provides estimates of the underlying on-farm rates of change for those farms remaining in the industry