Determinants of Income Decline in Family Dairy Farming under Rising Costs and Policy-Induced Production Adjustment in the Tokachi District

Abstract

In recent years, dairy farm income has declined due to rising input costs and reduced milk production under government policy. This paper examines income decline in family dairy farms during the resulting “dairy crisis.” First, there is no clear difference in the degree of income decline by farm size; high-performing farms that maintain income are observed across all size categories. Second, no significant correlation is found between management stability indicators (e.g., feed cost ÷ milk sold) and the rate of income decline. Third, the primary drivers of income decline vary by farm size: for small farms, rising feed costs and reduced production volume are central, whereas for large farms, increases in non-feed variable costs and fixed costs are more influential. As farm size increases, cost management becomes increasingly critical.