An Economic Analysis of Investment Pattern, Cost of Milk Production and Production and Profitability of Commercial Dairy Farms in Maharashtra

Abstract

Dairying in India has traditionally been a small holders' enterprise. As the demand for milk and milk product is increasing rapidly, milk producers have been adopting dairy farming on commercial scale to tap the market opportunities. The present study conducted on 40 commercial dairy farms in Ahmednagar district of Maharashtra (India) in the year 2009-10 analyses their capital investment, cost and returns and the profitability. The farms were classified into small, medium and large categories based on herd size. Small, medium and large dairy farms maintained 10.55, 14.11 and 34.66 milch animals respectively. The average investment per farm was estimated to be Rs. 12.17 lakhs. The share of dairy animals in total investment ranged from 51.28 % (small farms) to 70.12 % (large farms). The average productivity of cross-bred cattle was 9.72, 9.58 and 9.49 litres of milk per day for small, medium and large category of commercial farms; while per litre cost of milk production thereon were Rs. 12.49, Rs.12.58 and Rs. 11.48 respectively. The net return over cost per litre of cow milk produced was Rs. 2.16. All the farms were financially viable earning a net profit of Rs. 1,91,458 per farm per year.