The Efficiency of Poultry Farms: A Dynamic Analysis Based on a Stochastic Frontier Approach and Panel Data

EU production is important for global poultry markets and is concentrated in a few countries, including Italy. The aim of this study is to investigate the technical efficiency of Italian poultry farms in 2019-2022, characterized by the COVID-19 pandemic and avian influenza, which occurred almost simultaneously and presented poultry farms with important economic challenges. In particular, this study aims to observe how efficiently poultry farms utilized their inputs with regards to controllable or managerial factors and exogenous shocks and factors beyond the firm's control. Data was retrieved from the RICA database, the Italian section of the EU Farm Accountancy Data Network. After a descriptive analysis, a stochastic frontier model was applied to the panel data to estimate production frontier and firm-specific inefficiency factors. Results reveal the relevance of certain cost categories (feed, water, fuel, and electricity) and their increase over the observed period. Current and capital costs have positive and significant impacts on the value of production. As regards the determinants of technical efficiency, a greater endowment of some inputs (labor and farm area) and the sizes of farms in terms of livestock units are correlated with an improvement in the technical efficiency of farms.