PROFITABILITY STUDY OF MILK PRODUCTION SYSTEMS IN NAZARENO CITY (MG), BRAZIL

Abstract

The aim of this research was to study the profitability of dairy business of milk production systems in the Nazareno city, MG, Brasil. Besides identifying the components that exerted greatest influence on the final costs of the business we also estimated the breakeven point. The data utilized was coming from four production systems, collected monthly during the period of January to December 2004. The Custo Bovino Leite software processed the electronic data as well as the profitability analysis, taking into consideration the gross margin, net margin and the result (profit or loss) as indicators of economic efficiency. The component items of the effective operational cost that exercised larger influence on the activity milk pan’s costs were, in decreasing order, feeding, labor, overall expenses, energy, health, milking, taxes and artificial insemination. In the economic analysis, two production systems presented positive net margin and the positive result, indicating that they have conditions to keep their produce in the long run, with possibility of expanding. The others systems presented a positive net margin and a negative result that indicates that these producers have been operating their milk activity at a loss. However there is a possibility of improving their gain in the medium term.

KEYWORDS: Breakeven point, dairy cattle, production cost, profitability analysis.