Diversification in Spanish Dairy Farms: Key Drivers of Performance

  1. Álvarez, Antonio 2
  2. García-Cornejo, Beatriz 1
  3. Pérez-Méndez, Jose A. 1
  4. Roibás, David 2
  1. 1 Department of Accounting, University of Oviedo
  2. 2 Department of Economics, University of Oviedo
Journal:
International Food and Agribusiness Management Review

ISSN: 1559-2448

Year of publication: 2016

Volume: 19 B

Pages: 163-188

Type: Article

DOI: 10.22004/AG.ECON.244626 GOOGLE SCHOLAR lock_openOpen access editor

More publications in: International Food and Agribusiness Management Review

Abstract

Recent downward trends in milk prices and the abolition of European Union (EU) milkproduction quotas have raised questions among Spanish farmers exploring whetherdiversification initiatives are profitable. The objective of this paper is to provide empiricalevidence measuring the financial performance of value-added dairy farm ventures. The studyanalyzes forty-nine farms in Northern Spain that have diversified activities through milkcommercialization and related niche products. Data collected through in-depth interviews withfarmers shows that knowledge management, management control systems (MCS) and adifferentiated value proposition for customers positively affect performance. Contrary to what isexpected, networks and the technological level of the ventures (innovation of the productionprocess and the use of IT systems) do not assure positive performance outcomes.