Weather impact on environmental efficiency of the Irish dairy sector: A panel stochastic frontier analysis

Abstract This paper assesses the influence of weather events on the environmental efficiency of Irish dairy farms. Stochastic frontier models based on distance functions (hyperbolic, enhanced and restricted) are estimated using panel data surveyed between 2017 and 2021. Our results indicate that Irish dairy farms can improve their productive performance by increasing desirable outputs by 5.49 per cent and reducing undesirable output (nitrogen surplus) by 5.20 per cent. Results also show that higher temperature and soil moisture are negatively associated with environmental efficiency. These findings highlight the importance of taking into account weather events in farm managerial decisions and policies that aim at tackling environmental challenges in the Irish dairy sector.