Lamb Production Costs: Analyses of Composition and Elasticities Analysis of Lamb Production Costs.

C Raineri,T S S Stivari,A H Gameiro

doi:10.5713/ajas.14.0585

C Raineri, T S S Stivari + Show 1 more

Open Access

https://doi.org/10.5713/ajas.14.0585

Copy DOI

Abstract

Since lamb is a commodity, producers cannot control the price of the product they sell. Therefore, managing production costs is a necessity. We explored the study of elasticities as a tool for basing decision-making in sheep production, and aimed at investigating the composition and elasticities of lamb production costs, and their influence on the performance of the activity. A representative sheep production farm, designed in a panel meeting, was the base for calculation of lamb production cost. We then performed studies of: i) costs composition, and ii) cost elasticities for prices of inputs and for zootechnical indicators. Variable costs represented 64.15% of total cost, while 21.66% were represented by operational fixed costs, and 14.19% by the income of the factors. As for elasticities to input prices, the opportunity cost of land was the item to which production cost was more sensitive: a 1% increase in its price would cause a 0.2666% increase in lamb cost. Meanwhile, the impact of increasing any technical indicator was significantly higher than the impact of rising input prices. A 1% increase in weight at slaughter, for example, would reduce total cost in 0.91%. The greatest obstacle to economic viability of sheep production under the observed conditions is low technical efficiency. Increased production costs are more related to deficient zootechnical indexes than to high expenses.

Highlights

Brazilian sheep production, unlike what has been happening in most other countries, has since the early 2000s attracted investors and expanded in numbers and quality
Submitted Aug. 1, 2014; Revised Sept. 26, 2014; Accepted Sept. 30, 2014 consumer's table can offer many drawbacks, and new breeders face several difficulties to establish effectively in the activity. The greatest of these is the challenge of keeping a healthy and productive flock at production costs that do not compromise the economic viability of the activity
Economic analyses were performed, as follows: i) study of costs composition, and ii) study of the total cost elasticities according to the prices of inputs and zootechnical indicators

Summary

Introduction

Unlike what has been happening in most other countries, has since the early 2000s attracted investors and expanded in numbers and quality. New sheep breeders have no tradition or experience in the field. They are attracted by the steady demand for the product, which motivates imports of most of the sheep meat consumed by Brazilians, and by the high prices charged by restaurants and boutiques that sell specialty meats. 30, 2014 consumer's table can offer many drawbacks, and new breeders face several difficulties to establish effectively in the activity. The greatest of these is the challenge of keeping a healthy and productive flock at production costs that do not compromise the economic viability of the activity. It is necessary to apply efficient methods of managing, which occurs in only a few cases (Raineri, 2012)

Objectives

Methods

Results

Conclusion