Main Impacts on Value of Milk Production in Different Regions from Rio Grande Do Sul, Brazil

Julcemar Bruno Zilli,Júnior Candaten

doi:10.5539/jas.v8n9p184

Abstract

<p>This paper analyzed the main impacts on the value of milk production in different regions (Development Councils) of Rio Grande do Sul, Brazil. For that, we used the structural-differential method known as method Shift Share effects with production, productivity, price of milk and production values. It is relevant to note that, as well as production, the dairy herd and the productivity underwent positive and significant changes in the analyzed period, in both federal and state level. The impact each variable causes on the total amount produced defines whether what is occurring is the use of resources or just an increase in the matrices. The main results show that some Councils, such as Fronteira Oeste, whose price-effect corresponds to in 40.65%, the lowest amongst all and denotes a lower market dependence. The most satisfactory productivity effect occurs in the Sul Council with 48.98%, inferring a higher production efficiency. For the herd effect, the highest matrices growth rate in production were found in the Metropolitano Delta Jacuí Council, with the value of 30.09%. However, for the purpose of value of production, the Rio da Várzea Council obtained the most significant value of 117.94%. Thus, the results enable understanding the bottlenecks and state regional needs in the sector, influencing economic decisions. The effect of the milk price was critical to increasing the value of milk production in the analyzed periods and the productivity effect showed mild effect on the value of milk production. Likewise, the herd effect was found in the analysis to generate less impact than other effects.</p>

Highlights

The agribusiness goes through daily challenges to maintain its quality and sustainability
The model used is analyzed in three different effects: (i) Herd Effect caused by a variation in number of milked animal; (ii) Productivity Effect, which contains a modification in milk productivity through new technologies and genetic improvement of the herd; (iii) Price Effect, analyzing the effect of the price on the value of production
Applying the Shift-Share Model for the variables, we obtained an increase in the value of the state production of 142.21%, which can be decomposed into three effects, where the herd effect increases 19.15% in the variation of the production value

Summary

Introduction

The agribusiness goes through daily challenges to maintain its quality and sustainability. The opening of the international trade in the 1990’s caused the insertion of foreign industries in Brazil, and facilitated the processing of primary products such as those produced by the agribusiness and enabled global price competition, quality and production. It was no different, new market determinations required that all the links within the production chain reduce costs and the use of capital. Continuous internal and external demand for dairy products moved the level of the domestic prices. At that time of national economy there was the incentive for companies to invest in capital in order to compete with the multinationals settled in Brazil, which were making the market more competitive with foreign milk

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Conclusion