The Survey of Efficiency of Dairy Farm Units and Milk Production Function in Lorestan Province

This study was carried out in order to investigate the management and efficiency of dairy farms units and milk production function, in 121 units of dairy farm in Lorestan province at the year 2017. The Required data was collected with field survey and face to face interview method. Data of production function were estimated using corrected ordinary least squares (COLS) Method by Cobb Douglas functions. Also, technical efficiency was estimated by deterministic parametric frontier (DPF). In terms of dairy farms units cost, feed costs accounted for 65.5 %, labor costs 16.16 %, health care and insemination 9.9 %, and 9.1% other costs (including the cost of losses, location and maintenance of dry cows). The average technical, allocative, economic efficiency of the units were 64.3, 52.4 and 44.3% respectively, that showed the significant potential of these units in increasing their productivity. Based on this results farms were not desirable condition in terms of economic efficiency, similar with allocation efficiency in contrast to the technical efficiency. The results showed that dairy cattle units were not efficient 75.7 percent economically in Lorestan province and failed to optimally and effectively minimizing inputs cost. Milk production function results showed that consumption of alfalfa, corn silage, concentrates, artificial insemination number a positive and very significant effect (P<0.05)  and number of workers, hygiene and health costs also fuel and electricity consumption had a positive and significant effect on milk yield (P<0.05). The results of milk production function showed that the importance of increasing each unit of the concentrate (0.352) in increasing milk production was more than other inputs. Generally, the majority of dairy farms due to lack of observance of economic principles in the management of inputs had a low allocation and economic efficiency. Finally, according to the obtained results, it is necessary to implement the guaranteed milk price and maintain the relative stability of forage and concentrate prices in increasing milk production of dairy farms units in Lorestan province.