Assessment of the Relations for Determining the Profitability of Dairy Farms, A Premise of Their Economic Sustainability

Abstract

The profitability of dairy farms is a broadly addressed issue in research, for different farming systems and even more so now, when it comes to the issue of sustainability in different agricultural fields. The present study presents an evaluation of the relations used for the determination of profitability of various categories of dairy farms, in terms of size, geographical area, and total milk production. In order to analyze the associated influence exerted on the level of profitability by the selected technical and economic indicators, regression functions were applied. The TableCurve program was used to determine the ideal equation that describes the data entered in a two- or three-dimensional representation. The research results showed that the size of farms and the level and value of milk production are directly correlated with profitability, and the unit cost is inversely correlated with it.

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“…At the same time, with an increase in the size of the farm, the production costs per animal unit decreased, and the net profit increased. This conclusion is also confirmed in the research of the Romanian scientists R. Chetroiu et al (2022), who substantiated that the size of farms and the level and cost of milk production are in direct correlation with profitability, and the unit cost of production is inversely correlated. Nigerian scientists S. Johnson et al…”

Determinants of profitability of dairy farming enterprises among smallholder dairy farmers in south-west Nigeria

“…Although the production scale also influences profitability as fixed costs are distributed over more milk units (kilograms or litres), farms with smaller sizes with less than 10 cows can be profitable due to unpaid family labour and little investments in facilities [18]. With an increase in the herd size, a farm may seem profitable to an extent, but with the size of the herd exceeding 50 cows, the scale generally overrides family labour advantages [19][20]. Financial profitability is also influenced by extension visits, distance from the market, number of cows owned by the farmer, size of the family, farm size, level and the value of milk produced [21][22].…”

Toward a new perspective on evaluating climate change resilience of agroecosystems

“…However, the broad diversity of agroecosystems suggests that to collect adequate data to facilitate the evaluation of agroecosystem stability domains it will be necessary to collect robust climate, economic, and production data for agroecosystems across the spectrum of possible conditions and management scenarios, from currently optimal agroecosystems to systems that are currently suboptimal but have the potential to emerge as productive agroecosystems under future conditions. Studies that identify influencing factors on farm profitability are present in the agricultural economics literature (e.g., Belasco et al, 2010; Chetroiu et al, 2022; Ngwang & Meliko, 2021), suggesting that interdisciplinary research that integrates agricultural economics with ecology and environmental science approaches could be valuable to meet this research need. We also must advance plot‐ and farm‐scale experimental research that assesses plant responses to stress and effects of changing environmental conditions on harvest yield, crop quality, and other factors that influence profitability. This approach would involve not only assessing the impacts of climate stress on varying elements of harvest value (e.g., factors like yield, quality, nutritional value, etc.)…”