Economic Assessment of Small-Scale Mountain Dairy Farms by Using Accounting Data: Evidence from an Italian Case Study

Dairy mountain farms are economically disadvantaged due to small farm sizes and high production costs. This situation was exacerbated firstly by the opening of the market linked to the abolition of milk quotas; secondly by the rising prices due to the energy crisis due to covid 19 and the war in Ukraine. However, these farms are important for the preservation of traditional landscapes, the economy of these areas and the offered ecosystem services, especially when they are managed extensively. The objective of this research is to understand if mountain dairy farms are economically sustainable and competitive through the analysis of a case study. The economic analysis takes into account the production cost of milk, profitability, and some economic indicators using accounting data. The results show that the farm profitability is decreasing, and the costs are unsustainable. As a consequence, more efficient policy support is needed to overcome this crisis.