Socio-economic analysis of dairy cattle enterprises in urban sprawl

Abstract

Dairy cattle are an activity that provides sustainability in the livestock sector and consequently in the agricultural sector. Therefore, socio-economic structures of dairy cattle farms are important. On the other hand, the location of an enterprise is very important both in terms of proximity to raw materials and marketing opportunities, and urban sprawl have high potential in this respect. In this study, the socio-economic structures of 91 dairy cattle farms in the province of Konya are investigated. Since milk is a perishable product, the marketing process must be carried out in a healthy way and the importance of urban sprawl has been determined in the study. The most important feature of enterprises in urban sprawl is that their capital structures are different. As these areas are in the process of urbanization, land and building capital is perceived as non-agricultural investment. This situation has a negative effect on the rantability of agricultural enterprises and the unit cost of milk. In the calculation of unit cost of milk the amortization, interest of capital and repair and maintenance costs of the building capital are considered as fixed costs and the average unit cost of milk is $0.33/kg. The cost of milk is determined as $0.29/kg when the building capital is subtracted from the cost calculations by considering the structural characteristics of urban sprawl. This difference in unit cost of milk is interpreted as the location rent of the dairy enterprises in the urban sprawl. In addition, transportation costs are low due to being close to the market. And it is also because of location rent. In this case, the management of dairy in the urban sprawl is evaluated economically and it is recommended to plan the organized livestock regions in the regions close to the cities.