Impact of environmentally friendly technologies on costs and cost-effectiveness of a dairy cattle confinement system

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Our goal was to assess the economic impact of some environmentally friendly technologies on the production costs and cost-effectiveness of a dairy cattle confinement system, estimating environmental costs and their representativeness in both effective and total operating costs, as well as in the total cost. We assessed the cost-effectiveness of the cost center of milk production and identified the components that most affect final costs, estimating a break-even point (kg milk year-1) as well. The data were collected in a freestall full-confinement system of a dairy cattle farm located in southern Minas Gerais State (Brazil), from January 2016 to December 2017. The cost of milk production was estimated using a method based on the operating and total costs from a cost center involving lactating and dry dairy cows. The cost center of milk production showed to be economically feasible, showing positive gross and net margin results, as well as positive profitability and cost-effectiveness. Total environmental operating cost was on average R$ 0.015 per kg milk, which represented 1.985% of the total operating cost. Effective environmental operating cost was on average R$ 0.0059, which corresponded to 0.7788% of the total operating cost. Finally, total environmental cost was on average R$ 0.0317, representing 3.3280% of the total cost. The most representative items of the effective operating cost were in descending order: animal feed, workforce, animal health, animal production hormone (bovine somatotropin; bST), vehicle maintenance, machines and equipment, maintenance of improvements, electricity, and freestall bedding sand. Average break-even point was 1,104,038.54 kg milk year-1 or 3,024.76 kg milk day-1, while average production was 4,271,383.00 kg milk year-1 and 11,702.42 kg milk day-1.