Development of a cost calculation model and cost index for sheep production

Abstract

-The objective of this study was to develop a model for calculation and analysis of production costs of lamb and, from that, to elaborate a production cost index. Panel meetings were held in five regions of the state of São Paulo, Brazil, to define technical features of representative properties of lamb production, taken as a basis for the preparation of the cost calculation model. Then the model for production cost calculation was built. The third step consisted of monitoring prices of inputs used, calculating production costs along the studied period, and generating the cost index, by the Laspeyres model. Lastly, questionnaires were applied to sheep producers, to validate the cost index. The model for production cost calculation was planned to be of easy utilization by farmers, and simultaneously faithful to the theoretical principles. The adopted scheme of cost allocation followed the classification of "variable", "fixed operating", and "income of factors". We generated cost indexes for each of the five studied regions, which were then aggregated in a state index, by weighting regional indexes by flock size. More than 97% of the answers to the validation questionnaires were positive, so we considered that the index reached a high level of approval. The application of Economic Theory is essential for the development of cost calculation models. The developed model has potential to generate important information that can help producers to make decisions. It can work in many contexts, and it can even be adapted to other livestock species. The production cost index for lamb was approved and can collaborate with the organization of the sheep agroindustrial system.

Economic Assessment of the Productive Parameters in Meat Sheep Production Using Discrete Event and Agent-Based Simulation

“…The significant tax contribution on sheep production in this study is in accordance with the findings of Raineri et al (2015b), Sorio & Rasi (2010) and Souza et al (2008). These authors stated that informality is present in the production, slaughter, marketing and carcass processing of Brazilian sheep, in which 55% of farmers perform the slaughter and marketing on their own farms, both because of the possibility of achieving higher sales figures and evading taxes.…”

“…Health protection programmes are sometimes understood as extra costs related to sheep production; however, an increase in lamb deaths can lead to higher losses (Demirhan, 2019). In a study carried out on representative commercial farms with respect to meat lamb production, Raineri et al (2015b) noted the use of anthelmintics as one of the factors that least impacted the production costs of sheep farming, which is in agreement with our findings. It is believed that submodels, which can add information on genetic selection by resistant animals, can be more sensitive to the effects of age and differences in pasture management; therefore, the impact of the health variable could be refined, its behaviour better understood and its analysis improved.…”

Development of a calculation model and production cost index for feedlot beef cattle

“…The Microsoft Excel ® software was used as a calculation tool. The cost allocation scheme was based on the Economic Theory and on a study performed by Raineri et al (2015a); however, cost method adaptations had to be made.…”

“…Confederação da Agricultura e Pecuária do Brasil -have monitored costs on a regular basis and have developed a cost index for extensive beef cattle production (CEPEA and CNA, 2017). The Milk Cattle branch of Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA) calculated the Milk Production Cost Index (Carneiro et al, 2010); Raineri et al (2015a) developed the Lamb Production Cost Index for the state of São Paulo; in addition, EMBRAPA developed the Swine and Poultry Production Cost Indexes (Girotto and Santos Filho, 2000;Miele et al, 2010). Despite the relevance of this issue, the calculation and monitoring of costs have not been properly discussed in feedlot cattle studies.…”

Costs of biosecurity measures in Brazilian laying hens farms in response to policies against Avian Influenza, Newcastle Disease and Salmonellosis

“…The research had an exploratory character and for the estimation costs of production and biosecurity measures, data were obtained in ten voluntary establishments between June and July, 2013. The methodology adopted was the lamb costs calculation proposed by Raineri et al (2015) in which the basis for the costs allocation scheme was the Economic Theory and different methods used in agriculture. Thus, in economic terms, cost components were grouped into the categories of variable, fixed, total and operational cost.…”