Effect of the scale of production on the cost-effectiveness of milk production systems belonging to the “Balde Cheio” program

Abstract

This study investigates the cost-effectiveness of 20 demonstration units (DUs) belonging to the "Balde Cheio" program. The units in question are from the state of Rio de Janeiro, Brazil, dating from January to December 2011, and are sorted according to the scale of production (small, medium and large). The data were analyzed using Predictive Analytical software (PASW) 18.0. The scale of production influenced the total cost of milk production, and therefore profitability and cost-effectiveness. The large-scale stratum showed the lowest total unit cost. The positive results in medium and large scales in milk production lead to optimal conditions for long-term production, with the capitalization of cowmen. The items regarding the effective operating cost (EOC) with the biggest influence on the costs of dairy activity in the small scale stratum were food, energy and miscellaneous expenses. In the medium scale, these were food, labor force, and miscellaneous expenses. Finally, in the large scale, they were food, labor force and energy. In the small and large scale, the items regarding the total cost with the biggest influence on the costs of dairy activity were food, labor force, and return on capital, while in the medium scale, they were food, return on capital, and labor force. The average break-even point of 14 of the DUs was higher than the average daily production.