The profitability of milk activity was studied in the region of Lavras, MG by analyzing the influence of the technological level on milk cost. The components with major influence on the final cost of the activity were identified and the breakeven point was calculated. Monthly data from 16 production systems representing the low, medium and high technological levels from January 2002 to June 2003 were used. The gross margin, net income and the profit or loss results for the period were used as indicators of economic efficiency. The technological level had impact on the total costs of the milk and consequently on its profitability. The low level production system showed the lowest costs. The technological level also had an impact on the operational cost of the activity. The analysis of the net income and losses observed during the period for the three technological levels suggested the farmers will capitalize in medium term but not in the long one.
profitability analysis; milk production; cost; technological level; breakeven point
