In 2020, Swiss farmers generated approx. 22% of the total output value of milk production: around CHF 2.5 billion out of CHF 10.4 billion. Due to growing price pressure on dairy farms, diversification strategies in dairy production – i.e. strategies to improve a farm’s earning opportunities with new products or services – are becoming more and more important.

The recently published study by Agroscope and an external research partner used data from 3500 farms to investigate three different strategies for dairy farms:

Strong specialisation in milk production
Diversification with a focus on direct marketing
Diversification with a focus on agrotourism.

Agrotourism – the clear winner

The group focusing on agrotourism unequivocally showed the greatest advantage, both in terms of income and in terms of work productivity. Key requirements for branching out into agrotourism are:

The farm itself or the surrounding area must be able to offer tourist activities.
The farm must have a solid marketing strategy.
The farm management must be capable of bearing the entrepreneurial risk.

The pitfalls of direct marketing

In Switzerland, milk producers pursuing a direct-marketing strategy are level pegging in terms of income with farms specialising exclusively in milk production. As regards work productivity, however, there are noticeable shortfalls. It is possible that the labour involved in the production of the various dairy products is underestimated, or that the marketing strategy does not lead to the desired increase in turnover. When switching to direct marketing, therefore, farmers must keep careful track of labour resources.

Dairy Products and Holidaymakers – a Good Combination