Iranian Journal of Agricultural Economics and Development Research

Iranian Journal of Agricultural Economics and Development Research

Operational Risk Management in Industrial Dairy Farms: An FMEA-Based Approach

Document Type : Reserch Paper

Authors
Ali Mollaei
Ali Firoozzare
Nazanin Yousefian
Department of Agricultural Economics, Faculty of Agriculture, Ferdowsi University of Mashhad, Mashhad, Iran
10.22059/ijaedr.2026.410517.669421
Abstract
Industrial livestock farms in semi-arid regions face multiple operational risks that can threaten business continuity and productivity. This study aimed to identify and prioritize operational risks in industrial livestock systems using evidence from 50 dairy farms in Mashhad County, north-eastern Iran. We applied a Failure Mode and Effects Analysis (FMEA) approach to develop a risk register and classify risks across major functional domains. Risk priority numbers were then computed based on severity, occurrence, and detectability. Risk scores were elicited through structured expert-based assessments with key farm stakeholders and aggregated to rank risks and highlight high-priority clusters. Results indicate that feed-related volatility (price shocks and quality instability), microclimate control failures (cooling and ventilation disruptions), workforce instability (turnover and skill gaps), and cold-chain disruptions (milk handling and storage reliability) rank among the most critical risks. These risks are not only frequent or severe, but also difficult to detect early, which increases the likelihood of cascading losses through reduced milk yield, herd health complications, and operational downtime. The findings suggest that strengthening preventive management is essential to reduce both the occurrence frequency and the detectability deficiencies of high-priority risks. Key actions include systematic feed-quality monitoring, routine herd health surveillance, and reliability-focused maintenance for cooling, ventilation, and milk-cooling systems. In addition, improving institutional support mechanisms—particularly advisory and extension services, credible and transparent risk-transfer arrangements, and more effective cooperative governance—can enhance implementation capacity and resilience. Overall, the study provides an evidence-based prioritization to guide farm managers and policymakers toward integrated operational risk management in industrial livestock systems operating under semi-arid constraints.
Keywords
;">Resilience, ;">Climate variability, ;">Mashhad, ;">Uncertainty.
Subjects
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Iranian Journal of Agricultural Economics and Development Research
Volume 57, Issue 2
Summer 2026
Pages 313-329