Effect of pasture irrigation on profitability of dairy production systems participating in the "Balde Cheio" program

Abstract

This research sought to analyze the effect of irrigation of grasslands on the profitability of dairy production by 20 demonstration units (UDs) that participate in the dairy improvement program called “Balde Cheio”. Understudy were the components that exerted the greatest influence on total and effective (cash flow) operating costs and the impact of each one on economic return. The data were processed using PASW 18.0 software and multiple linear regression incorporating the stepwise method to determine the relative effect of each component of production costs on the criteria liquid margin, profitability and investment yield. Pasture irrigation was found to affect the total cost of milk production and, thus, profitability and yield. The stratum of non-irrigating producers had the lowest total cost and effective operating costs. The liquid margins were positive, but the net margins were negative in both strata, thus, the dairy operation is not viable in the long run, due to decapitalization of the producers. The items of effective operating costs with most efforts on the dairy business (in decreasing order) were: in the non-irrigating stratum, feed, sundry expenses and labor, and in the irrigating stratum, feed, labor and energy. In both strata, the most influential components of total cost followed in order: feed, family labor and remuneration of capital invested.