Economic feasibility of a complete diet industrial production project for horses

Abstract

This study evaluated the economic viability of industrial production of complete diets for equine species, using threesources of fiber (dehydrated whole corn plant, dehydrated elephant grass, or Tifton 85 hay) submitted to two typesof thermal processing (pelleting or extrusion). A survey and elaboration of costs from the agricultural production ofroughage to the commercialization of the final product was conducted. Three scenarios were compared: S1 – basalprice of complete diet (ingredients supplied together, but purchased separately); S2 – price of S1 plus 10%; S3 – priceof S1 plus 20%. Profitability indicators applied were internal rate of return (IRR) and net present value (NPV). Simplepayback was used to verify return on investment time. Sensitivity analysis was performed to identify the items thatmost influence the economic results. Simple payback ranged from one to six years. The highest values of IRR (>100%per year) and NPV were obtained for the extruded diets in scenario 3. Only the pelletized diet containing Tifton 85 hayin scenario 1 was not economically feasible, presenting negative IRR. The inputs make up the item with the greatestburden on the production process (mean 89%). Except for pelletized diet containing Tifton 85 hay in scenario 1, theother projects present IRR above the minimum attractiveness rate (MAR) and were considered economically feasible.