The effect of heat stress on risk and efficiency in dairy farming

Our study employs a stochastic frontier model that explains short- and long-run production risk and efficiency with respect to heat stress conditions and other farm specific characteristics. We use an unbalanced dataset of specialist Swiss dairy farmers between 2003 and 2014. We find that farms are not able to reduce production risk towards heat stress in the short run. We also find that farm-specific characteristics explain risk and efficiency patterns in short and long run. Our results hold important policy implications regarding sustainability and resilience of dairy farming towards heat stress, with generalizations in the European policy context.