The effect of technological levels on profits of milk production systems participating in the "full bucket" program: A multicase study

Abstract

The present study examines the effect of technological levels on the profits of 20 demonstration units (DU) participating in the "Full Bucket" ("Balde Cheio") program in the state of Rio de Janeiro (RJ), from January to December of 2011, and identifies significant variables that affect total costs and real operating costs and their impact on revenues. Data were analyzed using PASW 18.0 software. A multiple linear regression model of stepwise regression is used to identify production cost components with greater influence on net margins, earnings and profits. Technological levels influenced earnings and profits. DUs of intermediate technological sophistication show positive economic results and are therefore considered economically viable, with the potential to remain in production for the short-, mid- and long-term, thus capitalizing dairy farmers. DUs of low and high technological sophistication show negative results, suggesting the decapitalization of milk producers, as revenues have not covered total costs. The most representative factors that affect real operating costs for DUs of intermediate and high technological sophistication are, in descending order, feed, labor, and other expenses. For DUs of low technological sophistication, the order is feed, other expenses and labor. The most representative components of total cost are found to be feed, labor, and returns on investment.