Adoption of Total Mixed Ration Practice and Profitability: The Case of Ontario Dairy Farms

This thesis examines determinants of the adoption of total mixed ration (TMR), and the effects of the adoption of TMR on the farm level productivity and profitability of Ontario dairy farms. A sample of 320 farm level data from 2004-2008 is taken from the Ontario Dairy Farm Accounting Project (ODFAP). A probit model is estimated to examine the factors affecting the adoption of TMR; and the propensity score matching analysis is used to explore the influence of the use of TMR on sample farm’s productivity and profitability. Results from the probit model show that farmer’s age, herd size, region, breed type and feeding system have significant effect on the adoption of TMR. In turn, the adoption of TMR feeding practice has positive influence on both farm productivity and profitability. Under the propensity score matching method, the use of the TMR feeding practice has an economically significant effect on farm profits (i.e., for average farm with approximately 73 cows, the use of TMR feeding practice increases farm profits by CAD$37,091.30/year approximately) and a statistically significant increase in milk production by 1075.41 hl/cow per year.