Epsilon Archive for Student Projects

Abstract

This master thesis is about the collaboration between the custom dairy heifer grower and the
dairy producer.

The custom dairy heifer grower is a rather unusual strategy of reproductive management in
Sweden compared to other countries like U.S. and Denmark where the specialization within
dairy production gone much further. In these countries the research also has reached much
further within this type of industry. However in Sweden there has been research made in the
area of collaboration, but then only within collaborations in the industries of crop production,
dairy production and pork meat.

The down going trend of profitability within dairy production together with poor profitability
in the beef industry could partly remedy if more collaborations around heifer contracting
would arise. But since the industry still is of a rare kind in Sweden the knowledge about how
these types of collaborative arrangements works and their contracts are put together is poor.
By that the aim of this master thesis is formulated as follows: "how is usually the
collaborative arrangement between the dairy producer and custom dairy heifer grower
designed". Beyond this main purpose the thesis also answers which the main motives are and
the pros and the cons of this type of collaborative arrangement.

To answer the aim of this master thesis there has been a literature review made preferentially
from U.S. studies together with a study made of contract theory applied on agriculture
businesses. But the core of this thesis is the case studies interviews which are the main part of
the empirical part of the thesis. The interviews were made with six custom heifer growers and
four dairy producers in Sweden. Also some template calculations were made as a part of the
empirical part of the thesis to cast some light on the difference between different contracting
types. The empirical part of the thesis was analyzed by the help of the literature review and
the contract theory.

As follows a sample of the conclusions made in this master thesis. The most common type of
contract among the studied cases was the buy/sell contract. A written contract should always
be constituted in this type of collaborative arrangements. One of the most common motives
for the heifer grower to be part in this type of collaborative arrangement is the possibility to
lower the workload compared to the former dairy production. One of the most common
motives for the dairy producer to take part in this kind of collaborative arrangement is the
possibility to increase the number of milking cows. And much more can be reed in the
conclusion part around motives, pros and cons and the design of this type of collaborative
arrangement.