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Bozena Wojtyra, Marek Balcerak ©
Warsaw University of Life Sciences
ECONOMIC EFFICIENCY OF FARMS SPECIALIZED IN MILK PRODUCTION DEPENDING ON THE SHARE OF CONCENTRATE FODDERS USED IN COWS NUTRITION
Abstract
The aim of the studies was to compare the production and economical results of milk producer farms in dependence on the concentrates from the purchase share used in cows feeding. Carried out analysis showed relation between the concentrates from purchase intake and achieved results. Households with the smallest share of concentrates from the purchase were characterized by the lowest year average cows status and their milk productivity and the lowest selling price of milk. Measures of the of the milk production economic efficiency achieved the most beneficial sizes in the group of farms with the largest stake of concentrates from the purchase, at the highest average yield (6188 litres of milk from the cow).
Key words: dairy cows, concentrates from the purchase, the farm, costs, agricultural income
Introduction
The share of concentrates in the feed ration depends on the quantity and the quality of applied roughage as well as on the milk productivity of cows. Applying the low-quality of green fodder or silages in dairy cows nutrition causes that it is essential increasing the share of concentrates in the dose what in turn raises the cost of milk production. According to Horngren and Foster [1991] and Maszczak, [1997] nutrition influences in about 65 % - 80 % to production results, while the income of selection response most often fluctuates within 4 to 20 %. Task
In this article production and economical results of farms specialized in milk production were compared in dependence on the participation of concentrates from the purchase in the feed ration of cows. Materials and methods
The study involved 158 farms in different regions of Poland with dairy cows management. . Numerical material, collected for the year 2006 was obtained from farms in the FADN3 accounting. For analysis farms were grouped, according to the concentrates from the purchase value in 1 dairy cow feed ration, into four groups:
• Up to 100 PLN (44 farms),
• from 101 PLN to 300 PLN (39 farms)
• from 301 PLN to 500 PLN (31 farms)
• above 501 PLN (44 farms). Unit costs of nutrients contained in the fodder were calculated: protein and energy
© Bozena Wojtyra, Marek Balcerak, 2009
3 FADN - Farm Accountancy Data Network
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costs, the direct costs of milk production in groups, and economic efficiency of milk production, expressed by the value of gross margin and agricultural income.
Using actual data collected, the relationship between the share of the purchased fodder with the economic results of milk production was analyzed.
Results of researches
Analyzed farms had average larger acreage of the agricultural land compared to the area of the agricultural land per one farm in Poland (7.6 ha in 2006) [GUS, 2007]. In examined groups of farms the average area of the farmlands fluctuated from 25.4 ha to 48.3 ha (table 1). The resources of the land were the greatest in the group of farms with a large share of concentrates from the purchase. Soil in surveyed farmlands was poor, which is indicating by bonitation index averaged only 0.99.
Participation of permanent grasslands in the structure of the farmlands ranged from 17.8 % (group 301 - 500 PLN/cow) to 30.1 % (group up to 100 PLN/cow). In small farms pastures dominated, and in farms with bigger acreage of grasslands dominated meadows. Individual farms with large area of meadows and pastures in the structure of the farmlands constitute about 20 % of entire community of agricultural farms in the country [Prokopowicz, 1997]. A large proportion of meadows and pastures limits the possibility of choice the agricultural production of farms in the certain scope, because on permanent grasslands it is possible to produce mainly fodders.
Table 1.
Information about examined farms grouped by the share of concentrates from _the purchase in cows nutrition (zloty per1 cow)._
Specification Average in the surveyed households Concentrations from purchase (PLN/ cow)
Up to100 101- 300 301-500 Above 501
Number of surveyed farms 158 44 39 31 44
Agricultural area (ha) 33,9 27,5 25,4 33,1 48,3
The share of permanent grassland in farmland (%) 25,4 30,1 26,9 17,8 25,8
Index of agricultural land bonitation (pt) 0,81 0,86 0,82 0,79 0,78
Average annual cow status (nb) 20 10 15 24 31
Milk yield (liter) 5627 4162 4802 5454 6188
The selling price of milk (PLN / liter) 0,99 0,88 0,94 1,02 1,02
Source: own calculations
In the analyzed farms the number of cows increased along with area of the farmlands increase. On farms with the minimum acreage of the land 2 cows were breed, and on farms with the largest acreage of the land there was 75 cows. The average number of cows was highest in the group of farms with the greatest value of concentrates from the purchase (31 cows), and smallest in the group of farms with the smallest value of concentrates from the purchase (10 cows). The culling indicator in households ranged from 14.8 % to 16.3 %. From examinations carried out by
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Stevenson [2001] results that the reason of early lcow culling cows and the decrease of the profitability of the milk production are mistakes in cow nutrition.
The average milk yield from 1 cow in examined farms exceeded an average level in individual farms in the country for 1400 litres (the average in Poland is 4074 litres) [Skarzynska et al., 2008]. Similarly to the number of cows, the highest performance was in farms where the value of concentrates from the purchase amounted over 501 PLN per cow (6188 litres) and the smallest in farms with the lowest value of fodders from the purchase (4162 litres).
Data presented in table 1 show that value of concentrates from the purchase increases with the cow number growth and the production of milk increase.
Farms with the largest share of purchased concentration fodders per 1 cow had the largest agricultural area, the population of cows and milk yield from 1 cow and the best selling price of milk. Farms with the smallest share of the purchased concentrate fodders were characterized by the lowest average annual cow status and their milk yield and the lowest selling price of milk.
Table 2
The structure of fodder consumption (dt /cow)
Fodders from the purchase (PLN/ cow)
Specification Average in dairy farms
up to 100 101-300 301-500 above 501
Number of surveyed farms 158 44 39 31 44
Fodders from the purchase
therein: concentrates 8,69 0,42 3,60 5,94 14,98
feed additive and mineral
feed 0,25 0,17 0,21 0,31 0,26
dried roughage 0,64 0,08 0,28 0,88 0,84
bulk watery foods 8,26 14,18 7,70 10,45 5,40
bulk liquid foods 9,28 0,00 7,42 3,32 16,28
Fodders from the goods production on farms
therein: concentrates 8,71 12,95 8,33 11,99 5,72
potatoes 0,73 1,69 1,52 0,56 0,19
Own fodders from the non commercial production
therein: fodder beet 0,84 2,79 1,09 0,09 0,51
Other tuber forage 0,12 0,31 0,44 0,00 0,00
green forage 60,33 69,76 67,78 56,38 56,31
hay 7,65 14,13 9,57 6,39 5,40
silage, hay silage 77,11 44,52 30,10 72,45 100,38
By-products from farms
therein: straw 4,85 6,20 5,76 5,07 3,91
beet leaves 0,55 2,21 0,45 0,00 0,36
beet leaves silage 2,99 2,47 9,31 2,39 0,83
Source: own calculations
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On analyzed farms dairy cows nutrition was based on fresh forage from good quality pastures and on valuable silages and hay silages (table 2). With the concentrate fodders from the purchase increase the use of silages and hay silages was increased and consumption of fresh forage and hays was reduced. In accordance to the principle of dairy cows nutrition, which is says that it is possible to cover the complete nutritional requirements of cattle, at the maximum participation of bulky feeds. To digestion of these kind of fodders cattle is genetically adapted. The use of grass from the pasture during the summer reduces the cost of milk production. According to Ostrowski et al. [2000] by reducing costs of feeding without reducing the milk efficiency is possible only at the good organization of using the pasture ensuring continuity of s fresh fodder supply.
Concentrate, mineral elements and vitamins are necessary for the profitable, high production of the milk. The feed ration must contain the appropriate concentration of nutrients (carbohydrates, protein, fiber, vitamins, mineral salts). Mixtures are essential to obtain the great effectiveness of the animal production [Strzetelski, Osi^glowski; 1998].
Concentrates in the hierarchy of production costs have here the leading position, but mixes from the purchase cost over 200 % more than cereal crops of the own production. Thus the the economics of milk production in Polish conditions depends not only on milk prices, but also on the intensity level and on degree of dependence on the market of fodders [Okularczyk, Borecka; 2003].
In examined farms the share of concentrates in the feed ration averaged 9.7 %. Concentrate fodders consumption grew with the productivity of cows increase, because with the increase of milk yield it is higher demand for fodder with increased energy in 1 kg of dry matter.
Table 3.
The production, costs and the direct surplus without subsides derived from milk _production in examined farms in 2006 (PLN per 1dairy cow)_
Average in Concentration from purchase (PLN/ cow)
Specification dairy farms up to100 101 - 300 301-500 above 501
Value of total production 6116 4448 5168 6219 7002
therein: milk 5425 3658 4467 5547 6329
weaned calves 455 574 482 421 425
culling cows 236 216 219 251 247
Total direct costs 2286 1672 1745 2385 2672
Herd replacement 403 361 302 422 464
Purchased fodders 756 182 397 672 1137
Own fodders 820 920 797 953 723
Other direct costs: 307 209 249 338 348
therein: specialized costs 137 80 97 156 161
medicines and veterinary services 163 128 144 165 182
Direct surplus without subsidies 3830 2776 3423 3834 4330
Source: own calculations
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Results presented in table 3 indicate differentiation between the direct surplus among discussed groups of farms. Value of the production is a main diversifying factor. Comparing different groups of farms with the average it can be state that higher total values of the production were in farms of the largest concentrates consumption per 1 cow.
In all holdings on the direct surplus value the milk value had the deciding influence (Table 3). With the increase of concentrates from the purchase in feeding cows participation, value of weaned calves decreased. It was caused of slight differences in price and, above all, lower body weight of weaned calves which in analyzed groups of holdings amounted 60 kg (in the group up to 100), 61 kg (group 101 - 300), 58 kg (group 301 - 500) and 53 kg (group above 501).
Production of milk turned out to be the least cost-consuming in the group up to 100 and for group 101 - 300. In the direct costs structure of dairy cows breed the dominant participation constituted the cost of fodders, in addition successively increased a participation of purchased fodders (Table 3). It was also observed decreasing share of own fodders from the goods production on farms. In the group of holdings with a large stake of concentrates from the purchase dominated fodders from the purchase, and in remaining groups in feeding cows was applied mainly own fodders. Farms bought mostly complete and complementary mix extracted meal, minerals and feed additives and the dry pulp. Among own fodders farms used the most often green fodder and hay collected from meadows and pastures, hay silages, corn silages. In feeding cows by-products were also applied, such as: sugar beet and fodder beet leaves (green fodder, silages), straw. Its share in examined households was minimal and quite rightly, because especially beet leaves are not recommended for distributing by cows (Table 2).
It should be noted that examined farms as the unit of productivity value increase the value of the production, direct costs and the direct surplus also increase. According to Bilik [1997] to increase production to 6600 liters of milk per year is increases the profitability. However, the increase of milk production above those limits in Polish condition causes nutrition costs increase, mainly as a result of consumption of expensive concentrates and it can thus reduce the profitability of milk production what was also observed in examined holdings. The concentrate fodder consumption in surveyed farms ranged from 0.25 up to 0.34 kilograms per 1 liter of milk production. In the examined barn by Ostoja - Solecki, Blicharski [1998] at an average yield of cows 7853 kg, the concentrate fodder consumption per 1 milk liter was 0.3 kg. On farms analyzed by Zi^tara [2007] the higher level of concentrates consumption was in households with higher productivity of dairy cows. In these holdings concentrates consumption for 1 milk kilogram was 0.213 - 0.357 kg/kg of the milk.
In the analyzed farm groups 1 MJ of energy cost was at similar level, but protein level was varied and ranged from 0.27 up to 0.62 PLN/kg (Table 4).
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Table 4
Measures of economic efficiency of milk production in the surveyed households
Specification Average in dairy farms Concentrations from purchase (PLN/ cow)
up to 100 101 - 300 301-500 over 501
Concentrations consumption per 1milk liter (kg/l) 0,31 0,32 0,25 0,33 0,34
Cost of 1kg concentrstions (PLN/kg) 0,53 0,42 0,46 0,51 0,58
Protein consuption (nBO) per 1 liter of milk (kg) 0,60 0,98 0,76 0,68 0,48
NEL consumption for 1 l of milk (MJ) 7,94 9,06 8,22 7,30 8,36
Fodder cost (PLN/l) 0,28 0,32 0,25 0,33 0,34
Cost of 1kg proteins (nBO) (PLN) 0,47 0,27 0,33 0,44 0,62
Cost of 1 MJ (PLN) 0,04 0,03 0,03 0,04 0,04
Value of Total production (PLN/litr) 1,09 1,07 1,08 1,14 1,13
Direct costs (PLN/litr) 0,41 0,40 0,36 0,44 0,43
Direct surplus without subsidies (PLN/liter) 0,68 0,67 0,71 0,70 0,70
Total workload (h./liter) 0,02 0,05 0,03 0,02 0,02
Value of Total production (PLN/work hour) 44,19 21,75 32,46 48,69 61,24
Direct surplus without subsidies (PLN/work hour) 27,67 13,58 21,50 30,02 37,87
Agricultural income without subsidies (PLN/farm) 39240 13820 28455 48504 66247
Agricultural income without subsidies (PLN/own work hour) 14,22 7,02 12,07 17,32 22,25
Source: own calculations
Okularczyk and Borecka [2003] stated, that cost of 1 MJ of energy contained in fodders of the own production was about twice lower than in concentrates from the purchase (an average in own fodders cost 1 MJ was 0.043 zloty, and in fodders purchased 0.074 zloty). Similarly costs of 1 kg of the protein contained in own fodders are lower on average about 170 % than in purchased fodders (on average 2.37 zloty in own fodders and 4.27 zloty in fodders purchased).
Presented in the Table 4 measures of economic efficiency of the milk production are show the effectiveness of use the material outlays and costs. Presented results showed the influence of the caws herd size, their productivity, feeding on the achieved results. The milk production scale increase positively affects the efficiency of labor input, therefore on farms with the largest population of cows, the highest milk production and the lowest labour were achieved the best results. The highest agricultural income without subsidies for one farm and for one work hour was achieved in farms with the largest of concentrates from the purchase share. Synthetic measure of efficiency is the level of agricultural income per 1 work hour. Holdings were clearly differentiated in respect of this indicator. The highest agricultural income per 1 hour was achieved on farms with the greatest share of concentrates from the purchase. Agricultural income per 1 working hour was the lowest in households with the lowest share of concentrates from the purchase, but it
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was influenced by low production scale. Presented data have shown that the milk production in the studied farms had not always been able to pay for the labor expended. In 2006 the parity rate amounted to 9.02 PLN/godz. [Skarzynska et al, 2006]. Among farm groups with the smallest share of concentrates from the purchase, work was completed in the 77.8 % of the parity rate. In other groups achieved farm income for 1 working hour exceeded the parity rate.
Conclusions
Examination and obtained results allow to formulate the following observations and conclusions:
1. The poor quality of soils and a large participation of permanent meadows and pastures in the structure of the farmlands in analyzed households cause farm specialization in the milk production. For the purpose of getting the high annual yield of milk from 1 cow farms supplemented deficiencies with fodders from the purchase.
2. Farms with the smallest share of concentrates from the purchase were characterized by the smallest year average status of cows and their milk productivity and also the minimum selling price of the milk.
3. In the examined set of farms the maximum value of the direct surplus was acttained in dairy farms where concentrates from the purchase amounted above 501 zloty per 1 cow annually.
4. Measures of the efficiency of the economic milk production achieved the most beneficial value in the group of farms with the largest share of concentrates from the purchase at the highest average yield - 6188 litres of milk from the cow.
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BILIK K., [1997]: Ekonomiczna ocena roznych systemow wychowu cieliczek oraz
mlecznego uzytkowania krow o zroznicowanej strukturze genetycznej. Roczniki
Nauk Zootechnicznych, T. 24 z. 4: 283-297 GUS [2007]: Rolnictwo w 2007 roku.
HORNGREN CH. T., FOSTER G., [1991]: Cost accounting, a managerial emphasis.
Pretice Hall International Inc. LIPINSKA H., GAJDA J., [2006]: Powierzchnia gospodarstw a baza paszowa i poglowie bydla w specjalistycznych gospodarstwach mlecznych., Annales UMCS, Sec.E, 61: 225-236 MASZCZAK T., [1997]: O informacyjnej funkcji rachunku kosztow. W : Rachunek kosztow i wynikow w zarz^dzaniu jednostkami gospodarczymi. AE Wroclaw
OKULARCZYK ST., BORECKA A., [2003]: Ekonomiczne progi ekstensyfikacji
produkcji zwierz^cej. Tech. Rol. Nr 6: 34-35 OSTOJA - SOLECKI J., BLICHARSKI P., [1998]: Kilka uwag dotycz^cych
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producing herds. J. Dairy Sci., 84 (E. Suppl.): E128-E143. ZI^TARA W., 2007: Ekonomiczne i organizacyjne problemy produkcji mleka przy wysokiej wydajnosci mlecznej krów. Roczniki Nauk Rolniczych, Seria G, Tom 93, z. 2: 27-36
Summary
Objective of the study was to compare the production and economic results of farms specialized in milk production, depending on the share of the purchased concentrates in feed ration for dairy cows.
In the assessed livestock farms value of the concentrates from the purchase grew steadily with the increase number of cows and milk production. Farms with the largest share of the purchased concentrate per 1 cow had the largest agricultural area, the population of cows, milk yield from 1 cow and selling price of milk. The highest agricultural income per 1 work hour was achieved on farms with the greatest share of the purchased fodder and the lowest on farms with the lowest share of the purchased concentrate.
Cmammx nadiümna do peda^ii 25.09.2009
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