Characteristics of dairy farms with different levels of technical efficiency

Bassotto, Leandro Carvalho; Lima, André Luis Ribeiro; Carvalho, Francisval de Melo; Lopes, Marcos Aurélio; Nascimento, Esteffany Francisca Reis; Netto, Expedito Pereira Lima

doi:10.1590/1413-7054202347019122

ABSTRACT

Dairy farming is essential for Brazilian agriculture and, especially, for the Minas Gerais State. The understanding of technical efficiency and its impacts on the economic performance of dairy farms contributes to the development of the milk production chain. In the context of organizations, the Firm Theory helps in understanding how production factors affect the economic performance of these organizations, which are little studied in dairy farming. The objective of this study was to identify the main characteristics that differentiate dairy farms in the state of Minas Gerais, Brazil. For this purpose, dairy farms with different levels of efficiency (high, medium and low) were compared using data envelopment analysis (DEA), descriptive statistics and mean difference tests, analyzing socioeconomic, cost and economic performance variables. To increase the technical efficiency of dairy farms, it is important to reduce the total operating cost (TOC) and effective operating cost (EOC) by optimizing their components. However, spending on feeding (concentrated) and electricity should be increased so that the analyzed dairy farms become more efficient. In addition, the increase in the technification of dairy farms must happen, but always with caution, so that depreciation costs do not rise disproportionately. This research contributes to the advancement of scientific knowledge by applying the assumptions of the Firm Theory to dairy farming, an incipient topic in the literature. For rural producers, this research can be especially useful when presenting efficiency indicators and parameters for dairy farms, such as food costs, which must be more than 60% of the EOC.

Index terms:
Firm theory; Data Envelopment Analysis (DEA); cost management; dairy cattle; milk production

[1] ^*Corresponding author: bassotto.lc@gmail.com

Item	Level of efficiency
Item	High¹	Medium¹	Low¹
Milk is the main source of family income	76.39	63.39	59.26
The farm is the only source of income	61.11	62.50	42.59
Has internet access	79.17	79.46	90.74
Participates in a production cooperative	69.44	55.36	62.96
Participates in a trade union	48.61	43.75	50.00
Participates in a credit union	27.78	25.00	24.07
Participates in an association	51.39	50.89	50.00
Has environmental regularization	54.17	49.11	57.41
Has legal reserve regularization	72.22	56.25	64.81
Has water regularization	51.39	41.96	53.70
Has environmental certification	33.33	25.00	29.63
Has social certification	6.94	2.68	1.85

Parameter	Item	Level of efficiency
		High		Medium		Low
		Mean	SD	Mean	SD	Mean	SD
Milk composition (%)	Nonfat dry extract	12.34	0.94	12.04	1.32	12.29	1.21
	Fat content	3.77	0.24	3.80	0.20	3.85	0.28
	Protein content	3.27	0.08	3.29	0.07	3.30	0.09
Milk quality (CFU/mL x 1,000)	Standard plate count (SPC)	37	47	32	58	28	46
Milk quality (CFU/mL x 1,000)	Somatic cell count (SCC)	372	195	414	278	391	156

	Level of efficiency
	High			Medium			Low
Item	Mean	%¹	SD	Mean	%¹	SD	Mean	%¹	SD
Total revenue²	216.12^a	100.0	18.98	221.2^a	100.0	24.59	217.67^a	100.0	28.17
Milk²	181.98^a	84.53	19.85	183.83^a	83.67	17.66	180.27^a	83.50	16.75
Additional income from quality/volume²	17.08^a	7.79	13.57	19.07^a	8.63	13.61	18.37^a	8.50	10.58
Bonuses²	17.86^a	8.17	13.76	20.08^a	9.09	13.80	19.84^a	9.18	11.00
Penalties²	-0.78^a	0.37	1.67	-1.01^a	0.47	1.58	-1.48^a	0.68	2.24
Animals²	15.16^a	6.82	15.74	14.96^a	6.32	19.15	17.18^a	7.16	23.56
Other²	1.91^a	0.86	6.01	3.34ª	1.38	10.11	1.85^a	0.84	3.34
Total operating cost (TOC)²	178.96^a	83.15	19.80	206.94^b	94.19	30.86	255.45^c	118.93	42.06
Family labor²	9.73^a	4.54	6.44	9.61ª	4.44	5.75	10.68^a	5.01	5.91
Depreciation²	20.03^a	9.40	10.56	23.71^a	10.90	11.63	32.84^b	15.24	14.49
Effective operating cost (EOC)²	149.20^a	69.21	19.58	173.62^b	78.85	28.22	211.94^c	98.68	35.77
Feeding²	94.64ª	43.78	17.64	107.37^b	48.87	13.56	124.21^c	57.81	24.44
Concentrate²	67.41ª	31.22	14.82	72.42^a	32.90	12.23	81.02^b	37.74	26.98
Forage²	21.02ª	9.68	10.68	26.61^b	12.21	9.94	33.85^c	15.76	8.20
Minerals²	5.36ª	2.48	3.63	6.98^b	3.14	4.31	7.94^b	3.66	4.97
Other²	0.85ª	0.39	1.18	1.36ª	0.61	1.58	1.41^a	0.66	1.48
Hired labor²	20.68ª	9.72	9.10	24.48^a	11.17	11.46	32.46^b	15.18	14.18
Wages²	16.02ª	7.52	8.06	18.36^a	8.41	9.33	23.74^b	11.10	10.29
Social security²	2.00^a	0.95	1.88	2.82ª	1.27	2.36	3.86^b	1.81	2.92
Technical assistance²	2.01ª	0.95	1.27	2.63^b	1.19	1.30	3.39^c	1.60	2.21
Other²	0.65ª	0.30	1.37	0.64ª	0.28	1.63	1.47^b	0.66	2.14
Energy²	8.50ª	3.97	3.46	10.82^b	4.94	4.00	13.29^c	6.17	3.79
Electricity²	4.96ª	2.31	2.28	6.20^b	2.83	2.70	6.82^b	3.17	2.11
Fuels²	3.54^a	1.66	2.22	4.62^b	2.11	2.53	6.47^c	3.00	2.37
Maintenance²	4.89^a	2.30	4.28	6.08^ab	2.70	4.57	6.69^b	3.11	4.11
Health²	6.78^a	3.14	3.17	8.71^b	3.97	3.22	10.69^c	5.01	3.96
Preventive²	2.31^a	1.08	1.63	2.38^a	1.10	1.63	2.59^a	1.23	1.67
Healing²	4.35^a	2.01	2.34	6.13^b	2.79	2.55	7.91^c	3.69	3.68
Other²	0.12^a	0.06	0.26	0.20ª	0.09	0.37	0.19^a	0.09	0.34
Milking²	2.66^a	1.23	1.70	3.59^b	1.64	1.55	4.61^c	2.16	1.93
Fees and taxes²	0.34^a	0.16	0.49	0.24^a	0.11	0.28	0.33^a	0.16	0.37
Artificial insemination²	1.65^a	0.76	1.44	2.60^b	1.17	1.60	3.8^c	1.77	1.86
Other expenditure²	5.43^a	2.46	7.46	4.57^a	2.01	7.73	11.44^a	5.30	19.76
Gross margin²	66.92^a	30.79	20.18	47.57^b	21.15	26.92	5.73^c	1.32	45.01
Net margin²	37.16^a	16.85	22.04	14.26^b	5.81	31.36	-37.79^c	-18.93	49.74
Profitability (%)	16.85^a	-	9.43	5.81^b	-	14.46	-18.93^c	-	24.05
Labor (Number of people)	3.9ª	-	2.14	4.6ª	-	3.51	4.1^a	-	2.60
Hired (Number of people)	2.8ª	-	2.20	3.5ª	-	3.24	3.2^a	-	2.57
Family (Number of people)	1.2ª	-	0.9	1.1ª	-	0.8	0.9^a	-	0.6
Productivity (liters/person/day)	448ª	-	191.9	427^a	-	153	319^b	-	108
Production (liters/day)	1.900^ab	-	1.752.1	2.066^a	-	1.762	1.331^b	-	1.059
Parity point - PP (liters/day)	1.566^a	-	1.500	1922^a	-	1.663	1.512ª	-	1.070
Production - PP difference (liters)³	334ª	-	312	145^b	-	345	-182^c	-	268

Brasil

Brasil

Characteristics of dairy farms with different levels of technical efficiency

Características de propriedades leiteiras com diferentes níveis de eficiência técnica

ABSTRACT