Break-even point analysis for milk production - Selected EU countries

Abstract

Unstable conditions in the milk market in the Czech Republic (CR) and in the European Union (EU), mainly due to volatility of milk prices, are increasing pressure on dairy farmers to maximise production at the lowest possible production costs. Break-even point (BEP) analysis is a useful tool in dairy herd management for determining minimum requirements for profitability. BEP values for milk yield and milk price were calculated based on data obtained from 95 dairy farms in the CR. BEP values were estimated also for another eight EU countries based upon production and cost data from the EU Farm Accountancy Data Network (FADN). With the milk price ranging from EUR 28 to EUR 38 per 100 L and while excluding subsidies, zero profitability would be achieved on Czech dairy farms with milk yields ranging from 6 706 L to 13 151 L per cow and from 7 450 L to 14 088 L per cow in Czech Fleckvieh (C) and Holstein (H) herds, respectively. In order to achieve 5% profitability, the milk yield would need to increase by 21%. Considerable variability exists among EU countries in estimated BEP values depending upon average milk yields, input prices, and milk prices in different countries.

Break-Even Point and its Impact on Profit Planning in Educational Institutions: A Study Conducted in Lima, Peru, 2022

“…The findings of this study are consistent with prior research emphasizing the importance of break-even analysis in various industries (Cottafava et al, 2021;Neidhardt et al, 2022;Ofileanu & Bumbescu, 2014;Syrůček et al, 2022). Moreover, the study aligns with theoretical frameworks proposed by (Hernández (2011); Mazón et al, (2017);and Singh et al (2013).…”

“…This planning is carried out on the basis of several components of production: the choice of costing method, production costs and quantity produced, marketing costs and future revenues generated by the sale of the product (Ávalo Ortega et al, 2016;Getz, 1993). One of the techniques for analyzing the relationship between costs, volumes and profits is the break-even point (Cottafava et al, 2021;Neidhardt et al, 2022;Ofileanu & Bumbescu, 2014;Syrůček et al, 2022).…”

A sphere packing approach to break even and profitability analysis

“…A polyhedral set with vertices A, B, C, and D represents the set of the profitability conditions D x with respect to volume. If B(x 0 , r 0 ) ⊂ D x then any point of B(x 0 , r 0 ) satisfies profitability condition (20). Geometrically, it has been shown in figure 1.…”

“…To improve the efficiency of reusable products and obtain an environmental benefit, break even analysis has been done in [7]. Break even analysis for milk production of selected EU countries was done in [13,20]. In [15] break even points at which secondary battery raw materials can substitute primary materials in the battery production have been analyzed.…”

“…and x h , xh ∈ B(x 0 , r 0 ), consequently x h , xh ∈ D x satisfy profitability conditions (20). It means that in order to ensure company's profit, the company must keep its volumes in the following intervals:…”