PSXI-13 Effect of performance indicators, food expenses and interest rate on lamb production cost

Abstract

Abstract This study aimed at comparing the influence of zootechnical performance and main cost items over the total production cost of lambs. A representative production system of São José do Rio Preto region, Brazil, designed in a panel meeting, was used as a study basis. We calculated lamb production costs, including variable costs, fixed costs, and income of factors, using the data from December 2019. We then estimated elasticities for the variables: feed expense, interest rate, carcass yield, lamb survival rate, and fertility rate. This way we compared the variation in total cost per year and per carcass caused by increases of 1% in each of the considered variables. In the base scenario, production costs per year and unit were, respectively, US$ 33,367.34 and US$ 4.81. Feed expenses, annual interest rate, mean carcass yield, lamb survival rate, and fertility rate were, respectively, US$ 22,316.74, 4.50%, 48.00%, 88.00%, and 85.00%. Regarding annual cost, changing each variable caused variations of +0.67%, +0.05%, 0.00%, +0.33% and +0.33%. Concerning cost per unit, the variations were +0.76%, +0.07%, -0.98%, -0.61% and -0.64%, respectively. Increasing lamb survival and fertility rates were also effective strategies to lower unitary cost. The cost component with feed represented 66.88% of the total production cost, but measures to reduce feed costs must be well conducted to not affect the zootechnical performance of the animals. Farmers must consider cost per unit when thinking about lowering production costs, instead of the annual cost. Increasing lamb carcass yield had a greater impact on reducing unitary cost than cutting feed expenses. Improving performance indicators demand good nutritional status for lambs and ewes, and cutting off feed expenses may have deleterious effects on animal performance, therefore increasing cost. Elasticity analysis is a useful tool to calculate such trade-offs at the farm level.