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Technical and economic indicators of milk production systems in the Caiua sandstone region.

Introduction

The production of bovine milk has significant importance for Brazilian agribusiness. According to the Food and Agriculture Organization of the United Nations (FAO, 2018), in 2016, the country was the fourth largest milk producer in the world. That same year, the state of Parana was the second-largest milk producer in Brazil, contributing approximately 14.1% of the national production, according to Municipal Livestock Production (Producao da Pecuaria Municipal--PPM) data, from the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatistica--IBGE). In the state of Parana, there has been great technological development in milk production (Bazotti, Nazareno, & Sugamosto, 2012; Ferrazza, Lopes, de Moraes, & Pascoti Bruhn, 2015; Parre, Bankuti, & Zanmaria, 2011). This is associated with organizational technical factors, such as collaboration between teaching, research and extension institutions, in addition to credit associations, the use of specialized labor, the selection of a herd with greater productivity and an active cooperative structure (Passetti, Eiras, Gomes, Santos, & Prado, 2016). However, there is a great heterogeneity between the producing regions (Capucho & Parre, 2012; Telles, Bacchi, & Shimizu, 2017) and the respective milk producers in Parana (Lange et al., 2016; Neumann et al., 2016; Passetti et al., 2016). This difference is primarily characterized by the adoption of production techniques, feed supplementation for the dairy herd and genetic enhancements. Furthermore, dairy farming in Parana is mainly undertaken on family farms, based in small agricultural establishments.

The Northwest Parana mesoregion has a number of limitations regarding productivity gains in agricultural activities, associated with its climate and soil conditions, primarily because of the soils derived from Caiua sandstone, considered fragile, with a low natural fertility (Fidalski, Tormena, Alves, & Auler, 2013). The presence of climate and soil characteristics unfavorable to dairy farming activities in the region, particularly with regard to the production of forage species, leads to a large increase in production costs during the winter period, mainly related to feeding the herd. Despite these constraints, the Northwest Parana mesoregion has a relative importance in dairy farming; according to the IBGE's PPM data, in 2016, it produced 401 million liters of milk (approximately 8.5% of the production in Parana), ranking fifth in the state. Between 2002 and 2013, dairy production grew by almost 39%, accompanied by a 40% increase in productivity. It has approximately 23% of the effective cattle herd and 26% of the land used for pasture in the state, and approximately 78% of the establishments are family farms (Bazotti et al., 2012). According to Bankuti, Caldas, Bankuti, and Granco (2017) and Telles et al. (2017), this region of Parana specializes in dairy farming.

However, there is a paucity of studies concerning the Caiua sandstone area in the Northwest Parana mesoregion, particularly regarding dairy farming, and it is very important to characterize the technological level of the region's producers. According to Lopes Junior et al. (2012), there is no standard for production; the establishments range from subsistence farms to highly skilled producers with high productivity, and it is thus important to investigate the different production systems. Furthermore, there are problems with modernizing a traditional sector such as dairy farming in Parana: it is difficult to spread and adopt process and product technologies to increase production and productivity, since technological transformations in agriculture collide with the farmer's level of knowledge, their socioeconomic situation and the presence or absence of skilled and sustained multidisciplinary technical assistance.

It is thus understood that identification of the production systems actually used by milk producers in the Caiua sandstone area, in the Northwest Parana mesoregion, is important for supporting agricultural research and rural extension institutions in the creation and transfer of technologies compatible with the reality of producers in that area.

This study was realized to identify the different milk production systems in the Caiua sandstone area in Northwestern Parana according to their technological level and analyze their technical and economic indicators.

Material and methods

The study area comprises the Caiua sandstone region, which in Parana occupies a large part of the Northwest mesoregion and some municipalities in the West and North mesoregions (Figure 1). The region has a mesothermic humid subtropical climate, denominated Cfa by Koppen climate classification (Koppen & Geiger, 1928), characterized by hot summers, with infrequent frosts, no dry season and no water deficit. The Caiua sandstone area is approximately 32,000 [km.sup.2], i.e., approximately 16% of the area of the state of Parana.

After identifying, characterizing, classifying, and defining the types of agricultural establishments prevalent in each municipality/region of the state of Parana, based on the 1995/96 Agriculture Census by Doreto, Laurenti & Del Grossi (2001), the Reference Network for Family Agriculture (Redes de Referenda para Agricultura Familiar--REDES) (1) selected and began to monitor 38 family farms (2), with homogeneous characteristics in terms of milk production system (as described in Table 1), representative of the Caiua sandstone area in the Northwest Parana mesoregion. The farms differ according to the degree of intensification of pasture management. The REDES data are the foundation of this study.

After monitoring and analyzing the family farming establishments dedicated to milk production in the region, technical and animal indicators of milk production were obtained. Then, based on the categorization and technologies recommended by the IAPAR, three milk production systems were defined, classified according to pasture management--specifically, low, medium and high technological standards--whose characteristics are described in Table 2.

The analyses of the costs and profitability of milk production were based on the methodology of the Agriculture Federation of Parana State (Federacao da Agricultura do Estado do Parana [FAEP], 2005). The fixed and variable costs of production and the most commonly used dairy farming inputs were estimated. The prices paid and received by milk producers were obtained from the Department of Rural Economy (Departamento de Economia Rural--DERAL), of the Parana State Department of Agriculture and Supply (Secretaria da Agricultura e Abastecimento do Parana--SEAB-PR). The analysis period covered the harvest years 2002/2003 to 2013/2014.

The economic indicators analyzed in this study were the following: revenue from milk, revenue from sales of waste and scrap, total operating cost (TOC), actual operating cost (AOC), depreciation, total cost (TC), variable cost (VC), fixed cost (FC), gross margin (GM) and income from agricultural operations (IAO). Revenue from milk was calculated based on the amount of milk that each intensified system produced, multiplied by its price in that same period. TC was calculated based on the sum of the VC and FC. VC was composed of the sum of the items (i) fertilization, (ii) energy/protein supplementation, (iii) mineralization, (iv) health, (v) breeding and (vi) return on working capital, not considering taxes and fees. FC was the sum of expenditures on (i) animals, (ii) the site's physical structure, (iii) miscellaneous equipment, (iv) planting of sugarcane and pasture, including soil preparation, and (v) the opportunity cost, composed of return on land, capital invested and labor. TOC was calculated based on the sum of AOC and depreciation. AOC was obtained based on the sum of VC and taxes and fees, less return on working capital. GM corresponds to revenue from sales of milk, waste and scrap, less AOC. IAO is composed of revenue from sales of milk, waste and scrap, less TOC. Economic profit was calculated by subtracting TC from the revenues.

All economic indicators were adjusted by the Extended Consumer Price Index (Indice de Preco ao Consumidor Amplo--IPC-A), the official inflation index in Brazil, to December 2017 values and converted into US dollars.

Results and discussion

Table 3 presents the results of analyzing the profitability of dairy farming in production systems with low, medium and high intensities of pasture management between the years 2002/03 and 2013/14.

The average total revenue of the period in production systems with low, medium and high technological levels was US$ 28,853.27, US$ 56,019.48 and US$ 65,601.88, respectively. For the three systems evaluated, approximately 87% of the total revenue, on average, came from the sale of milk, irrespective of the production system. In the system with a medium technological level, there was an increase in total revenue of 94.42%, compared to the low technological level. Between the systems with medium and high levels, the difference in earnings was 17.11%; between the systems with low and high levels, this difference was 127.36%. Alvim and Botrel (2001) obtained similar results when they found that higher revenues were obtained in systems with a greater intensification of pasture management, although they showed that efficiency decreases with increased dosage of N. In this period, the total revenue of the three technological levels grew at an annual rate of 4.5% per year. This rate remains the same in the three systems studied, as, regardless of the technological level adopted, the herd's productivity is the same; the difference between them is the number of animals. The productivity per area was thus higher in systems with higher technological levels due to the higher concentration of lactating cows per ha.

Figure 2 presents the price history per liter of milk from harvest years 2002/03 to 2013/14. The average real price per liter of milk received by the producers in the period was US$ 0.31. Regarding the price paid to the producer per liter of milk, there were sharp declines in the agricultural years 2005/06 and 2008/09, which may have compromised the producer's revenue. These results demonstrate that in addition to climate and soil constraints, it is necessary to address market seasonality, which compromises the activity's sustainability.

Table 4 presents the costs of producing one liter of milk, in accordance with the technological level adopted, in the Caiua sandstone region in Northwestern Parana between the agricultural years 2002/2003 and 2013/2014. As a rule, the system with a low technological level presented higher costs, mainly due to the economies of scale and scope of the other systems.

The variable cost accounted for 69.08, 75.70 and 77.92% of the total cost, in systems with low, medium and high technological levels, respectively, figures close to those found by Lopes et al. (2005) and Lopes et al. (2009) for the municipality of Lavras (MG). The lowest variable cost per liter of milk was found in the system with a medium technological level, at the cost of US$ 0.29. This value was 7.16% lower than that of the low level and 1.15% lower than that of the high level. In an economic feasibility study of different supplementation levels, Silva et al. (2008) obtained similar costs, ranging from US$ 0.27 to US$ 0.32 for the municipality of Campos Gerais (PR).

In the fixed cost, there was an increase of 28.72% between the systems low and medium technological levels, whereas there was an increase of 4.68% between the systems with medium and high levels, and an increase of 34.74% between the systems with low and high levels. The difference between the systems with medium and high levels was lower, as the increase in the number of lactating cows (38 compared to 45) is smaller than that between the systems with low and medium technological levels (20 compared to 38). Furthermore, most of the infrastructure investments made in the system with the lowest intensification are the same, thus gaining economies of scale in production. Although the system with a low technological level exhibits the lowest fixed cost, i.e., US$ 11,442.21, the fixed costs were more diluted in the unit cost per liter of milk in the systems with a medium and high level, US$ 0.09 and US$ 0.08, respectively. Regarding the actual operating cost, the highest cost per liter of milk was identified in the system with a low technological level: an average of US$ 0.30. Knowing that the producer is able to achieve economies of scale in the systems with medium or high technological levels, this figure was reduced an average of 7.15% in the medium level and 6.13% in the high level.

Regarding the analysis of total operating cost, where the depreciation of machinery, equipment and improvements was also considered, the costs sustained in the period increased by an average of 8.88% for the low level, 5.11% for the medium level and 4.43% for the high technological level. In the studies of Simoes, Silva, Oliveira, Cristaldo, and Brito (2009), depreciation was responsible for 13.16% of direct costs in the system with intensive milk production. In Lopes, Santos, Resende, Carvalho, and Cardoso (2011), the depreciation of assets ranged from 3.8% to 19.4% of the total operating cost, and the lower percentage was a reflection of the farm's lack of infrastructure, which may have led to lower milk production. These results denote a certain breadth and heterogeneity of dairy systems, especially in relation to the use of the farms' physical structure.

The total operating cost per liter/milk in the systems with low, medium and high technological levels was US$ 0.33, US$ 0.30 and US$ 0.30, respectively. These values were close to those found by Silva et al. (2008). When the total operating cost was subtracted from the gross revenue from milk, no positive result was obtained for the system with a low technological level. It is thus essential that additional revenue from the sale of waste and scrap be generated, in order to begin operating with a positive income from agricultural operations.

Table 5 presents the items that constitute the actual operating cost and its percentage shares for the three production systems between the agricultural years 2002/03 and 2013/14. The components that have the greatest impact on the actual operating cost are those related to animal feed.

Across the three production systems, the item with the greatest weight in the actual operating cost was energy and protein supplementation, representing an average of 64.02%. In the studies of Segala and Silva (2007), a similar result was found for the municipality of Irani (SC), with feed representing 58.7% of the total, especially during periods of drought. The second-most-represented item in the costs was the fertilization of sugarcane, with an average of 10.2%. The third-largest expenditure was animal health, corresponding to 8.5% of the actual operating cost, a figure approximately 3% greater than that found by Lopes et al. (2011) and Lopes and Santos (2012).

Regarding expenditures on animal breeding, rural electricity, conservation and repairs and technical assistance, the systems presented expenditures on these components that were inversely proportional to the technological level adopted, i.e., as the intensification of pasture management increased, their share of the AOC decreased.

Regarding gross margin, considering the average values of the period evaluated, the system with a low technological level presented the lowest gross margin (US$ 3,973.82). In the system with a medium level, the gross margin was US$ 11,366.95; compared to that of the low level, this value represents an increase of 186.0%. In the system with a high technological level, the gross margin was US$ 12,671.51; compared to that of the medium level, there is a gain of 11.5%, and compared to the low level, this gain is 218.9%. The best gross margin per liter of milk was obtained in the systems with a medium and high technological level, with an average value of US$ 0.07, followed by the low level, with US$ 0.05. As in Lopes et al. (2011), the gross margin economic indicator showed that dairy farming in systems with medium or high intensities of pasture management is sustainable even in the short and medium term.

Regarding income from agricultural operations, where expenditures on depreciation are also considered, the system with a medium technological level was the only one that did not present negative values over the period. However, considering the average values of the period evaluated, the system with a high technological level exhibited the best income from agricultural operations (US$ 10,373), with a gain of 586.7% compared to the low level and 114.2% compared to the medium level. The values for the average income from agricultural operations per liter of milk obtained in the systems with low, medium and high technological levels were US$ 0.02, US$ 0.06 and US$ 0.06, respectively. Thus, increasing the technological level can improve income, provided that the marginal cost of the extra milk produced is lower than the price of the milk received (Macdonald et al., 2017).

From an economic point of view, when considering the opportunity cost, i.e., costs of return on land, capital invested, working capital and labor, the system with a low technological level was not economically feasible, even in years where the price of milk was above the average value. The system with a medium level was economically feasible in three years, whereas the system with a high technological level was feasible in four agricultural years, years in which the price paid per liter of milk was higher than US$ 0.33--with the exception of the agricultural years 2007/08 and 2012/13, when the market presented a generalized increase in the prices of this activity's inputs, pressured by the rise of the dollar.

Based on the analysis of economic feasibility, milk production systems confront barriers to being considered economically feasible. Both the price per liter of milk received by the producer and the prices paid for the agricultural inputs influence the final results. However, more important is the fact that in short, even in the Caiua sandstone area, a region with climate and soil constraints, without considering economic profit, dairy farming can be profitable for family milk producers.

Conclusion

In dairy farming systems operating in the Caiua sandstone area, in the Northwest Parana mesoregion, between 2002/03 and 2013/14, without considering economic profit, these systems presented the possibility of profitability for the producers, depending primarily on the price per liter of milk and the inputs inherent in the production. However, when considering economic profit, the systems were not economically feasible.

The technological level influenced the production costs and profitability of the production systems, with a greater intensification of pasture management being correlated with better results for the indicators analyzed.

References

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Telles, T. S., Bacchi, M. D., & Shimizu, J. (2017). Spatial distribution of microregions specialized in milk production. Semina: Ciencias Agrarias, 38(1), 443-454. doi: 10.5433/1679- 0359.2017v38n1p443.

Received on April 23, 2018.

Accepted on June 6, 2018.

(1) The Agricultural Research Institute of Parana State (Instituto Agronomico do Parana--IAPAR), in partnership with the Parana. The Company for Technical Assistance and Rural Extension (Empresa Paranaense de Assistencia Tecnica e Extensao Rural-- EMATER/PR) created the REDES project with the primary objective of assisting rural producers in all regions of the state of Parana. In the Northwest Parana mesoregion, mainly in the Caiua sandstone area, REDES has been operating since 1998, primarily focusing on the development of dairy farming technologies adapted to the region's limited climate and soil conditions.

(2) REDES uses a research methodology adapted to rural extension, supported in farms analyzed and monitored under the systemic approach, which includes analyses of natural resources, plant and animal production, human resources and socioeconomic aspects of family farming establishments (Miranda, Carneiro, Soares Junior, & Fuentes-Llanillo, 2009). In its different stages, the implementation of REDES involves conducting a preliminary study to characterize the region and classify the farmers, using information from agricultural censuses, which assists in the selection of the production systems to be studied. Once the agricultural establishments have been selected, their productive system is monitored and a diagnosis is made, in order to understand the operation of that system, its bottlenecks and potential, in addition to the farmer's goals, information that will in turn support the stages of planning and interventions on the farm. Based on the monitoring of the farms and the interventions performed in order to improve its production systems--which is done based on the study results--technical and economic references are obtained, which are also useful for other farmers with similar characteristics.

Simony Marta Bernardo Lugao [1], Bruno Volsi [2], Gustavo Vaz da Costa [2], Edson Luiz Diogo de Almeida [3] and Tiago Santos Telles [4] *

[1] Instituto Agronomico do Parana, Zootecnia, Paranavaf, Parana, Brasil. [2] Universidade Estadual de Londrina, Agronomia, Londrina, Parana, Brasil. [3] Instituto Paranaense de Assistencia Tecnica e Extensao Rural, Maringa, Parana, Brasil. [4] Instituto Agronomico do Parana, Socioeconomia, Rodovia Celso Garcia Cid, km 375, 86047-902, Londrina, Parana, Brasil. * Author for correspondence. E-mail: telles@iapar.br

Doi: 10.4025/actascianimsci.v41i1.42536

Caption: Figure 1. Area covered by the study and by Caiua sandstone in Northwestern Parana.

Caption: Figure 2. Price per liter of milk from harvest years 2002/03 to 2013/14, US$ [L.sup.-1]. Note: the values were adjusted to December 2017 values using the IPC-A.
Table 1. Common characteristics of milk production systems according
to the technological standard.

I              Race            Dairy herd composed mostly of crossbred
                                 cows, predominantly 7/8 Dutch blood

II         Useful area         11 ha of useful surface area for animal
                                             production

III    Average productivity        15 L [cow.sup.-1] [day.sup.-1]

IV        Pasture system         Rotational stocking, with perennial
                              tropical pasture (PTP) during the summer

V           Feed base

              Summer                PTP, energy or energy-protein
                                  supplementation, according to the
                                   production and lactation curve

              Winter             Sugar cane, corrected with urea and
                                ammonium sulfate, with energy-protein
                                           supplementation

Table 2. Specific characteristics of each milk production system
according to the technological standard.

                                        Low              Medium

I         Pasture management       100 kg of N        200 kg of N
                                   [ha.sup.-1]        [ha.sup.-1]
                                   [year.sup.-1]     [year.sup.-1]
II          Area with PTP             9.6 ha             8.4 ha
III         Sugarcane area            1.4 ha             2.6 ha
IV         Herd composition
                  Cows                  20                 38
                Heifers                  6                 12
                 Calves                  7                 14
V         Stocking rate (1)         3 to 4 AU          6 to 7 AU
                                    [ha.sup.-1]       [ha.sup.-1]
VI     Average milk production       7.466 L            14.434 L
                                   [ha.sup.-1]        [ha.sup.-1]
                                   [year.sup.-1]     [year.sup.-1]
VII             Labor                1.5 H Eq.          2 H Eq.
VIII       PTP productivity             Low              Medium
IX              Forage             Giant star,       Napier grass,
                                   Tanzania and     elephant grass,
                                      Mombaga         giant star,
                                                       Tanzania,
                                                      Mombaga and
                                                       Tifton-85

                                        High

I         Pasture management        300 kg of N
                                    [ha.sup.-1]
                                   [year.sup.-1]
II          Area with PTP              8.2 ha
III         Sugarcane area             2.8 ha
IV         Herd composition
                  Cows                   45
                Heifers                  14
                 Calves                  16
V         Stocking rate (1)          8 to 9 AU
                                    [ha.sup.-1]
VI     Average milk production        16.923 L
                                    [ha.sup.-1]
                                   [year.sup.-1]
VII             Labor                 2 H Eq.
VIII       PTP productivity             High
IX              Forage             Napier grass,
                                  elephant grass,
                                    giant star,
                                     Tanzania,
                                    Mombaga and
                                     Tifton-85

Notes. (1) Stocking rate of pastures in the rainy season. PTP:
perennial tropical pasture. N: nitrogen. AU: animal unit. H Eq.:
human equivalent.

Table 3. Economic indicators of dairy farming in family production
systems in the Caiua sandstone region in Northwestern Parana between
the agricultural years 2002/03 and 2013/14. in US$.

                         02/03     03/04     04/05     05/06     06/07

                          Low intensification in pasture management

Total revenue           24.165    25.523    26.615    21.983    24.780
Milk                    21.702    22.899    24.088    19.495    22.327
Waste/scraps             2.464     2.625     2.527     2.487     2.452
TOC                     26.898    27.920    26.808    23.679    24.284
AOC                     24.717    25.740    24.627    21.498    22.089
Depreciation             2.181     2.181     2.181     2.181     2.195
Total cost              36.462    37.030    35.906    32.752    33.295
Fixed costs             10.958    10.476    10.572    10.615    10.608
Return on land            987       726       957       833       725
Ret. on cap. invested    4.508     4.330     4.049     3.819     3.601
Taxes (ITR)               10         7        10         8         7
Depreciation             2.181     2.181     2.181     2.181     2.195
Return on labor          3.272     3.232     3.376     3.773     4.080
Variable cost           25.504    26.554    25.334    22.137    22.687
AOC (no taxes)          24.218    25.213    24.073    21.050    21.576
Ret. on working cap.     1.286     1.341     1.261     1.087     1.111
Gross margin             -552      -216      1.988      484      2.690
IAO                     -2.733    -2.397     -193     -1.696      495
Economic profit         -12.297   -11.507   -9.291    -10.769   -8.515

                          Medium intensification in pasture management

Total revenue           46.884    49.521    51.625    42.666    48.071
Milk                    41.956    44.271    46.570    37.691    43.166
Waste/scraps             4.928     5.250     5.054     4.975     4.904
TOC                     46.769    48.676    46.275    40.438    41.670
AOC                     44.540    46.447    44.046    38.209    39.427
Depreciation             2.229     2.229     2.229     2.229     2.243
Total cost              59.806    61.220    58.607    52.737    53.865
Fixed costs             13.844    13.299    13.303    13.386    13.372
Return on land            987       726       957       833       725
Ret. on cap. invest.     6.256     6.028     5.607     5.284     4.956
Taxes (ITR)               10         7        10         8         7
Depreciation             2.229     2.229     2.229     2.229     2.243
Return on labor          4.363     4.309     4.501     5.031     5.440
Variable cost           45.962    47.920    45.304    39.351    40.493
AOC (no taxes)          43.575    45.429    42.975    37.343    38.434
Ret. on working cap.     2.387     2.492     2.329     2.008     2.059
Gross margin             2.344     3.074     7.579     4.457     8.644
IAO                       115       844      5.350     2.228     6.401
Economic profit         -12.923   -11.699   -6.983    -10.071   -5.794

                          High intensification in pasture management

Total revenue           54.909    58.017    60.477    49.963    56.300
Milk                    49.190    51.904    54.600    44.189    50.609
Waste/scraps             5.718     6.113     5.877     5.773     5.692
TOC                     54.989    57.341    54.623    47.535    48.959
AOC                     52.745    55.096    52.379    45.291    46.701
Depreciation             2.244     2.244     2.244     2.244     2.258
Total cost              68.981    70.840    67.828    60.635    61.900
Fixed costs             14.523    13.962    13.913    13.960    13.905
Return on land            987       726       957       833       725
Ret. on cap. invest.     6.919     6.676     6.201     5.844     5.474
Taxes (ITR)               10         7        10         8         7
Depreciation             2.244     2.244     2.244     2.244     2.258
Return on labor          4.363     4.309     4.501     5.031     5.440
Variable cost           54.458    56.877    53.915    46.675    47.995
AOC (no taxes)          51.614    53.903    51.123    44.274    45.537
Ret. on working cap.     2.845     2.975     2.792     2.400     2.458
Gross margin             2.164     2.921     8.097     4.672     9.599
IAO                       -80       677      5.854     2.428     7.341
Economic profit         -14.073   -12.822   -7.352    -10.672   -5.600

                         07/08     08/09     09/10     10/11     11/12

                          Low intensification in pasture management

Total revenue           30.757    27.803    29.849    31.687    32.780
Milk                    27.596    23.872    25.930    27.250    28.150
Waste/scraps             3.161     3.930     3.918     4.436     4.631
TOC                     27.493    28.755    25.947    26.627    27.635
AOC                     25.298    26.558    23.700    24.387    25.396
Depreciation             2.195     2.197     2.247     2.239     2.239
Total cost              36.984    38.932    36.173    36.897    38.164
Fixed costs             11.038    11.551    11.878    11.911    12.133
Return on land            742       890       977       975      1.109
Ret. on cap. invested    3.830     3.923     3.835     3.833     3.586
Taxes (ITR)                7         9        10        10        11
Depreciation             2.195     2.197     2.247     2.239     2.239
Return on labor          4.265     4.532     4.809     4.854     5.188
Variable cost           25.946    27.381    24.294    24.986    26.031
AOC (no taxes)          24.663    26.009    23.104    23.760    24.748
Ret. on working cap.     1.282     1.372     1.191     1.225     1.282
Gross margin             5.459     1.198     6.149     7.300     7.385
IAO                      3.264     -952      3.902     5.060     5.145
Economic profit         -6.227    -11.129   -6.324    -5.210    -5.383

                          Medium intensification in pasture management

Total revenue           59.675    53.963    57.969    61.557    63.684
Milk                    53.352    46.153    50.132    52.684    54.423
Waste/scraps             6.323     7.810     7.837     8.873     9.262
TOC                     47.713    49.801    44.766    46.080    47.977
AOC                     45.470    47.556    42.418    43.740    45.636
Depreciation             2.243     2.245     2.348     2.340     2.340
Total cost              60.817    63.999    58.937    60.406    62.596
Fixed costs             14.193    14.971    15.465    15.604    15.831
Return on land            742       890       977       975      1.109
Ret. on cap. invest.     5.515     5.785     5.719     5.807     5.454
Taxes (ITR)                7         9        10        10        11
Depreciation             2.243     2.245     2.348     2.340     2.340
Return on labor          5.686     6.042     6.412     6.472     6.917
Variable cost           46.624    49.027    43.471    44.802    46.765
AOC (no taxes)          44.243    46.494    41.265    42.528    44.385
Ret. on working cap.     2.381     2.533     2.206     2.274     2.380
Gross margin            14.205     6.407    15.551    17.817    18.048
IAO                     11.962     4.162    13.203    15.477    15.708
Economic profit         -1.142    -10.035    -968      1.151     1.088

                          High intensification in pasture management

Total revenue           69.890    63.186    67.885    72.104    74.553
Milk                    62.550    54.111    58.775    61.768    63.806
Waste/scraps             7.340     9.075     9.109    10.337    10.747
TOC                     56.114    58.665    52.637    54.204    56.447
AOC                     53.856    56.405    50.265    51.840    54.083
Depreciation             2.258     2.260     2.372     2.364     2.364
Total cost              70.108    73.880    67.746    69.507    72.015
Fixed costs             14.850    15.696    16.199    16.373    16.559
Return on land            742       890       977       975      1.109
Ret. on cap. invest.     6.156     6.494     6.429     6.552     6.158
Taxes (ITR)                7         9        10        10        11
Depreciation             2.258     2.260     2.372     2.364     2.364
Return on labor          5.686     6.042     6.412     6.472     6.917
Variable cost           55.258    58.184    51.547    53.134    55.456
AOC (no taxes)          52.417    55.160    48.913    50.419    52.615
Ret. on working cap.     2.840     3.024     2.634     2.715     2.840
Gross margin            16.034     6.782    17.620    20.264    20.470
IAO                     13.776     4.521    15.248    17.900    18.106
Economic profit          -218     -10.693     139      2.597     2.538

                         12/13     13/14    Average

                          Low intensification in
                             pasture management

Total revenue           33.425    36.872     28.853
Milk                    28.384    31.221     25.243
Waste/scraps             5.041     5.651     3.610
TOC                     29.573    29.402     27.085
AOC                     27.333    27.162     24.875
Depreciation             2.239     2.239     2.210
Total cost              40.582    40.871     37.004
Fixed costs             12.507    13.056     11.442
Return on land           1.337     1.734      999
Ret. on cap. invested    3.549     3.646     3.876
Taxes (ITR)               13        17         10
Depreciation             2.239     2.239     2.210
Return on labor          5.368     5.419     4.347
Variable cost           28.075    27.814     25.562
AOC (no taxes)          26.680    26.444     24.295
Ret. on working cap.     1.394     1.370     1.267
Gross margin             6.092     9.710     3.974
IAO                      3.852     7.470     1.768
Economic profit         -7.157    -3.999     -8.151

                          Medium intensification in
                             pasture management

Total revenue           64.957    71.662     56.020
Milk                    54.875    60.361     48.803
Waste/scraps            10.082    11.301     7.217
TOC                     51.644    51.379     46.932
AOC                     49.304    49.038     44.653
Depreciation             2.340     2.340     2.280
Total cost              66.985    67.325     60.608
Fixed costs             16.349    17.120     14.728
Return on land           1.337     1.734      999
Ret. on cap. invest.     5.501     5.802     5.643
Taxes (ITR)               13        17         10
Depreciation             2.340     2.340     2.280
Return on labor          7.157     7.226     5.796
Variable cost           50.636    50.205     45.880
AOC (no taxes)          48.042    47.650     43.530
Ret. on working cap.     2.595     2.555     2.350
Gross margin            15.653    22.624     11.367
IAO                     13.313    20.284     9.087
Economic profit         -2.028     4.338     -4.589

                           High intensification in
                             pasture management

Total revenue           76.018    83.921     65.602
Milk                    64.336    70.768     57.217
Waste/scraps            11.682    13.153     8.385
TOC                     60.781    60.451     55.229
AOC                     58.416    58.087     52.930
Depreciation             2.364     2.364     2.298
Total cost              77.139    77.465     69.837
Fixed costs             17.109    17.959     15.417
Return on land           1.337     1.734      999
Ret. on cap. invest.     6.237     6.617     6.313
Taxes (ITR)               13        17         10
Depreciation             2.364     2.364     2.298
Return on labor          7.157     7.226     5.796
Variable cost           60.030    59.506     54.420
AOC (no taxes)          56.937    56.460     51.614
Ret. on working cap.     3.094     3.046     2.805
Gross margin            17.601    25.833     12.671
IAO                     15.237    23.470     10.373
Economic profit         -1.121     6.456     -4.235

Note: Actual operating cost (AOC). Total operating cost (TOC). Income
from Agricultural Operations (IAO).

Table 4. Average costs of milk production per liter in the Caiua
sandstone region in Northwestern Parana between the agricultural years
2002/2003 and 2013/2014, in US$.

                         02/03     03/04     04/05     05/06     06/07

                          Low intensification in pasture management

Total operating cost     0.33      0.34      0.32      0.29      0.30
Actual operating cost    0.30      0.31      0.30      0.26      0.27
Total cost               0.44      0.45      0.44      0.40      0.41
Variable costs           0.31      0.32      0.31      0.27      0.28
Fixed costs              0.13      0.13      0.13      0.13      0.13

                         Medium intensification in pasture management

Total operating cost     0.30      0.31      0.29      0.25      0.26
Actual operating cost    0.28      0.29      0.28      0.24      0.25
Total cost               0.38      0.39      0.37      0.33      0.34
Variable costs           0.29      0.30      0.28      0.25      0.25
Fixed costs              0.09      0.08      0.08      0.08      0.08

                          High intensification in pasture management

Total operating cost     0.30      0.31      0.30      0.25      0.26
Actual operating cost    0.28      0.30      0.28      0.24      0.25
Total cost               0.37      0.38      0.37      0.32      0.33
Variable costs           0.29      0.31      0.29      0.25      0.26
Fixed costs              0.08      0.07      0.07      0.07      0.07

                         07/08     08/09     09/10     10/11     11/12

                          Low intensification in pasture management

Total operating cost     0.34      0.35      0.32      0.32      0.34
Actual operating cost    0.31      0.32      0.29      0.30      0.31
Total cost               0.45      0.47      0.44      0.45      0.46
Variable costs           0.32      0.33      0.30      0.30      0.32
Fixed costs              0.13      0.14      0.14      0.14      0.15

                         Medium intensification in pasture management

Total operating cost     0.30      0.31      0.28      0.29      0.30
Actual operating cost    0.29      0.30      0.27      0.28      0.29
Total cost               0.38      0.40      0.37      0.38      0.39
Variable costs           0.30      0.31      0.27      0.28      0.30
Fixed costs              0.09      0.10      0.10      0.10      0.10

                         High intensification in pasture management

Total operating cost     0.30      0.31      0.28      0.29      0.30
Actual operating cost    0.29      0.30      0.27      0.28      0.29
Total cost               0.38      0.40      0.37      0.37      0.39
Variable costs           0.30      0.31      0.28      0.28      0.30
Fixed costs              0.08      0.08      0.09      0.09      0.09

                         12/13     13/14     Average

                           Low intensification in
                             pasture management

Total operating cost     0.36      0.36       0.33
Actual operating cost    0.33      0.33       0.30
Total cost               0.49      0.50       0.45
Variable costs           0.34      0.34       0.31
Fixed costs              0.15      0.16       0.14

                         Medium intensification in
                             pasture management

Total operating cost     0.32      0.32       0.29
Actual operating cost    0.31      0.31       0.28
Total cost               0.42      0.42       0.38
Variable costs           0.32      0.32       0.29
Fixed costs              0.10      0.11       0.09

                          High intensification in
                             pasture management

Total operating cost     0.32      0.32       0.30
Actual operating cost    0.31      0.31       0.28
Total cost               0.41      0.42       0.38
Variable costs           0.32      0.32       0.29
Fixed costs              0.09      0.10       0.08

Table 5. Components of the actual operating cost, of dairy farming in
family production systems in the Caiua sandstone region in
Northwestern Parana between the agricultural years 2002/2003 and 2013/
2014.

                                               Intensification in
                                               pasture management
Item
                                            Low     Medium     High

Energy and protein supplementation        61.27%    65.61%    65.17%
Fertilization of pasture and sugarcane    10.41%     9.42%    10.81%
Health                                     8.07%     8.68%     8.61%
Transportation of milk                     4.05%     4.37%     4.32%
Mineralization                             2.23%     2.38%     2.37%
Breeding                                   2.87%     1.60%     1.35%
Rural electricity                          3.48%     1.94%     1.64%
Technical assistance                       3.98%     2.76%     2.63%
Taxes and fees                             2.33%     2.51%     2.48%
Conservation and repairs                   1.30%     0.72%     0.61%
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Title Annotation:ANIMAL PRODUCTION
Author:Lugao, Simony Marta Bernardo; Volsi, Bruno; Costa, Gustavo Vaz da; de Almeida, Edson Luiz Diogo; Tel
Publication:Acta Scientiarum. Animal Sciences (UEM)
Date:Jan 1, 2019
Words:7268
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