EFFECT OF SCALE PRODUCTION ON THE ECONOMICAL RESULTS OF MILK PRODUCTION SYSTEMS AT LAVRAS REGION

The purpose of this research was to study the profitability of the dairy business in to milk production systems at Lavras region, MG by surveying the influence of scale production on the cost of milk production. Identifying the components which exercised greatest influence on the final costs of the business and identify the breakeven point was intended. The data used were from 16 production systems, allocated in one of three production strata ( small, average and large), situated at Lavras region, collected monthly, over the period of January 2002 to June 2003. The electronic data processing as well as the profitability analysis was accomplished by taking into account the Custo Bovino Leite((R)) software. The analyses of costs and profitability were performed by taking into consideration crude margin, net margin and the result ( profit or loss) as indicators of economical efficiency. Scale production influenced the total cost of milk production and therefore, profitability of the production systems with the largest scale being the one which presented the smallest total unit costs. Scale production influenced the "weights" of the items component of the effective operational cost of dairy business, these being different in each of the three production strata. Management changes and technological efforts should be done aiming to increase daily average yield, which is very low the breakeven point. In the economic analysis, presenting positive net margin and negative result, in the three production strata, it means that dairy business has conditions; at average term, and at long term, milk farmers have been decapitalizing.