ECONOMICS OF DUAL-PURPOSE DAIRY CATTLE UNDER VARIOUS MILK PRICING SYSTEMS

Monika Michaličková, Zuzana Krupová, Emil Krupa

Abstract: The impact of various pricing systems on the profitability of Slovak Simmental dairy cattle was evaluated using a bio-economic model. Pricing systems represented the most widespread variants of the contracts of farmers and dairies. Direct subsidies related to dairy herd were included when calculating the profit. The evaluated production system operated with loss per cow and year (455 €), which ranged from 326 to 589 € when delivering the same milk quality to various dairies. Orientation of dairy towards products with higher added value was found to be a comparative advantage. In contrast, high penalties for nonstandard milk resulting in a lower average milk price were competitive disadvantages. Moreover, the content of somatic cells was highly important in terms of the health security of milk production.

Keywords: bio-economic model; dairy cattle; economics; pricing system

Date published: 2017-04-28