The cost and profitability analysis of different dairy farm sizes.

Abstract

Dairy cattle production is a substantial industry in Türkiye's livestock sector, with a significant economic impact. Because of its proximity to Türkiye's major market zone, the Mediterranean and Aegean regions, the province of Isparta can develop its milk production capacity and make investments in dairy production. Therefore, the purpose of this study was to look into production costs and drivers of profitability for dairy farms of various sizes in Isparta, a major milk-producing region in Türkiye. The study included data from 159 dairy cattle farms operating in the production period 2020-2021 in the designated area. Dairy farms were separated into three groups based on size and analysed consequently. The findings revealed that total feed consumption was higher on small-scale farms, while milk production was lower. Feed costs were the highest portion of the total production cost among the cost items (72.86%), followed by permanent labour costs (7.12%). Furthermore, milk sales income (64.39%) was the largest contributor to the average income in terms of the gross product value. Aside from milk production, it was discovered that cattle value appreciation (24.12%) increased farm income. Consequently, as farm size increased, production costs per animal unit fell while net profit rose. Finally, feed is the most significant input that boosts milk production costs. Also, larger farms were found to be more profitable in the study area. Thus, it was concluded that policies that could have a favourable effect on an increase in the cattle population on the farm should be advanced in the study area.