Investment plan for decreasing the cow milk production cost

Published: Dec 6, 2017
Cow milk production cost investment plan

The aim of this study was to investigate the possibility of decreasing cow milk production cost with an investment plan, using a sample of 120 medium and large size dairy farms in Central Macedonia. Cost reduction is considered necessary either for improving the dairy farmers' income or for maintaining it in current levels as falling milk prices are expected as a result of the new Common Agricultural Policy of the European Union. Three cost reducing factors were examined: a) increasing size of the farm (number of cows), b) increasing annual milk yield per cow and c) increasing the proportion of on-farm produced feedstuff. All three factors had significant effect on reducing cow milk production cost (P<0.01). However, while cost reduction by 1% would require increasing the number of cows by 28.3% (from an average of 86.9 to 111.5 cows per herd) or the proportion of on-farm produced feedstuff by 34% (from an average of 32.1% to 43%), the required increase in annual milk yield per cow would be only 2.2% (from an average of 6,442.5 kg to 6,586.2 kg). Furthermore, the fixed capital investment, required by each plan, would be 78,184, 16,132 and 3,475 euros, respectively.

Article Details
  • Section
  • Research Articles
Download data is not yet available.
Burrell A (1997). Economie aspects of milk production in the E.U. Office for official publications of the European Communities. Luxembourg.
Cordonnier Ρ (1986). Economie de la production laitière. Technique et Documentation. Lavoisier et INRA. Paris.
Draper NR and Smith H (1981). Applied Regression Analysis. 2nd Edition. John Wiley & Sons.
EUROSTAT (1998). Agriculture. Annuaire statistique. Office despublications officielles des Communautés européennes. Luxembourg.
Guesdon J-C, Chotteau Ρ and Kempf M (1995). Vaches d' Europe. Lait et Viande. Aspects économique. Economica. Paris.
Kitsopanidis G (1998). Sustainability and profitability of modem dairy farms in relation to farming area and level of production. Proceedings of the 5th National Conference of Agricultural Economy. Athens, Greece.
Kitsopanidis G and Kamenidis C (1995). Agricultural Economics. 2nd edition. Zitis Editions. Thessaloniki.
Seber GAF (1977). Linear Regression Analysis. John Wiley & Sons.
Schmidt GH and Pritchard DE (1987). Effect of increased production per cow on economic returns. J. Dairy Sci., 70:2695-2704.
Valergakis G (2000) Farm conditions and methods of dairy cattle production in relation to the dairy farming productivity and profitability. Doctoral thesis. Faculty of Veterinary Medicine, Aristotle University of Thessaloniki, Greece.
Williams CB, Oltenacu PA, Bratton CA and Milligan RA (1987). Effect of business and dairy herd management practices on the variable cost of producing milk. J. Dairy Sci., 70:1701-1709.