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The decrease in the number of dairy farms in Sweden has been ongoing for a longer period of time. But the fact is that this has previously not had any big effects on total amount of milk produced in Sweden. The main reason is that the remaining dairy farms get larger. However, during the past year, there has been a decrease in the total amount of produced milk, because the decrease is faster than the increase within the farms that are left. During the same period of time the supply of milk on the global market also has decreased.
In spite of the fact that the global supply have decreased and the fact that the milk price increases, there are dairy farmers in Sweden who chose to exit the market. This paradox is the background to the question in this paper. What factors affect the dairy farmers that develop or exit milk production? Are there any other factors than the financial factor that affect the farmers?
This paper is a qualitative research based on case studies. The case studies are based on interviews with three farmers who have chosen to exit milk production and three farmers who have chosen develop their production. The interviews were made during November and December 2007. The idea with the interviews was to get the farmers to mention what factors they thought affected their decisions and to get a deeper understanding of each individual case.
The factors hypothesised to affect the decision to enter or exit milk production were divided into four different categories, based on a theoretical model developed in this paper. The categories are: General external environmental factors, Specific external environmental factors, The farm and the business, and finally the individual. These categories of factors affect the decision that the farmer make.
The results from this paper has been summarised into four conclusions. The first conclusion is that interest in dairy production is very important. All the three farmers that developed their production were very interested in milk production, while the farmer that had made an exit were less interested in milk production. The social and the geographic environment also had a big impact on the farmers. The ones that had developed lived in a social environment that was positive towards development if dairy production. The ones that had made an exit lived in an social environment that was not as positive towards milk production. The farmers who had made an exit lived close to a bigger or smaller city while the farmers who had developed lived further away from a city.
The third conclusion was that it is important to know whether or not the farm would survive for several years to come. The developer had that knowledge while the farmers that had made an exit did not. Finally, the fourth conclusion is that it is important how you see the means to reach your financial goal. Either you see dairy production as the means to reach your goal or you will find something else that you think is a better way.