Economic and Financial Viability of Pig Farming in the Integrated Termination System

Abstract

Objective: The study aims to compare the economic and financial viability of expanding the pig farming activity carried out in the finishing system, on a rural property in the municipality of Xavantina/SC.   Search method: Methodologically, the research is descriptive, carried out through a case study and qualitative analysis. From the collection of data relating to batches from the period 2019 and 2020, a statement of the results of the pig farming activity was prepared. Discounted payback, Internal Rate of Return (IRR) and Net Present Value (NPV) were used for analysis.   Main results: Economic results demonstrate the net margin per batch of pigs of up to 64% in the current finishing system. With the increase in investments, the net margin is up to 44% per lot. The results show a financial return time of 10 years, 11 months and 8 days, with an IRR of 10.08% in the current situation. Considering the investments in expanding the new piggery and the revenue and expense projections, the financial return will occur in 18 years, 11 months and 8 days, with the IRR at 10.02%. In general, the results demonstrate the importance of rural accounting as a support instrument in monitoring activities developed to support the economic-financial analysis of investments and the decision-making process.