Understanding Smallholder Beef Production: Cost Structures, Market Channels, and Pathways to Enhanced Profitability

Abstract

This study investigates the cost structures, market channels, and profitability of smallholder beef production systems in Phayao Province, Thailand. Focusing on three market segments: Traditional Market Production (TMP), Medium Market Production (MMP), and Premium Market Production (PMP). This study analyzes the socio-demographic characteristics of farmers, production practices, and the costs and returns of each segment. Data were collected from 100 farms using structured questionnaires and analyzed using descriptive statistics and one-way ANOVA test to assess significant differences between production systems. The findings reveal that profitability varies significantly across market segments, with PMP farms providing the highest net profit per cattle, whereas TMP farms face challenges related to pricing and cost sensitivity, resulting in lower profit margins. This study highlights the key role of market segmentation in enhancing smallholder performance, suggesting that focused expenses on cattle purchases, feed management, animal health, and market position can significantly improve financial outcomes. Furthermore, this study enhances the understanding of the economic dynamics of beef production systems in Thailand by discussing the limitations faced by smallholder farmers and by supporting sustainable practices. The findings provide information insights for improving the competitiveness and sustainability of smallholder beef production systems in Thailand and other similar agricultural contexts.