Analyzing the potential introduction of contract heifer raising in Malta

Abstract

The Dairy sector is one of the largest, and perhaps most organized within the Maltese agriculture. It underwent complete metamorphosis and took up its present shape to spare the Maltese population from Undulant Fever back in time and will soon be completely upgraded throughout, following strong investment by the stakeholders involved, including farmers, of whom, obviously only those committed and efficient remain. The Maltese population seems to support the local dairy sector, showing this through strong brand loyalty and overwhelming response to marketing campaigns by the processor. However, like any other commercial operation, dairying can only survive as long as it is profitable. A thorough exercise was conducted with two Gozitan dairy farms (referred to as Farm A and Farm B), that analyzed the costing and revenue these farms had during the year 2007, showing that profitability was very poor on one of the farms while loss was actually registered on the other. Since then, the scenario did not improve much but somehow profitability needs to be improved. One way they can do this is through outsourcing the raising of their own heifers from specialists who would specialize in heifer raising, doing so against payment according to a contract. On Farm A, raising an own heifer costed €1180.70 while on the smaller Farm B this was €2949.74. On the proposed specialist farms it was estimated to cost around €1374 creating win-win situations for both source and specialist farms as well as making available a series of cash and non-cash benefits to the former.