Analysis of Challenges Facing and Factors Influencing the Profitability of Dairy Cattle Enterprises in Southwestern Uganda

Abstract

In this study, challenges experienced by dairy cattle enterprises in Southwestern Uganda and the factors influencing their profitability were respectively analyzed using exploratory factor analysis and multiple regression in STATA 15.0 statistical software. Eighteen questions relating to the challenges experienced by dairy producers in the study area were factor analyzed using principal components analysis with varimax rotation. Kaiser-Meyer-Olkin’s measure of sampling adequacy was 0.643, above the commonly recommended value of 0.6, and Bartlett’s test of sphericity was significant (ꭓ² (153) = 1670.13, P<0.001). Using both the scree plot and eigenvalues greater than 1 to determine the underlying components, the analysis yielded five factors explaining a total of 67.42% of the variance in the data. These factors were investment constraints, productivity constraints, climatic and environmental conditions, veterinary and social security services, and marketing constraints, which explained 21.32%, 13.01%, 11.97%, 11.03%, and 10.097% of the variance after rotation, respectively. The factors hypothesized to influence the profitability of dairy enterprises were; daily milk yield per lactating cow, the prevalence rate of diseases, percentage of lactating cows to those raised on the enterprise, attendance of animal production training, the unit production cost of milk, and enterprise size according to the number of animals raised. Regression analysis results of these factors revealed that the unit production cost of milk, enterprise size, and daily milk yield per lactating cow were statistically significant. The estimated model had an R-squared value of 0.92. The recommendations emphasized in this study were reducing milk production costs, rational use of production resources, adopting improved cattle breeds, improving feeding by supplementing animal diets with concentrate feeds to increase milk yield, and general improvement in dairy herd management practices, including disease control strategies.