The production costs for dairy milk in the southern region of the state of Minas Gerais are presented in this study. This research identifies economic indexes of costs that most influence decisions made by milk producers. The research is based on the theory of costs and the study location was the southern region of the state of Minas Gerais, where data on the 12 milk production units were gathered from March of 2000 to February of 2001, characterizing a multicase study. The economic analysis proved that milk prices were below average total cost but exceeded average variable cost. Even though profits may be negative in this case, as long as variable cost gets covered, the profit-maximizing decision is to continue production. Thus, not all of the fixed costs are lost. The research shows that expenses on variable resources represent the greater portion of the final cost of milk, like costs with cattle feed and labor. The items with fixed costs which affected most on the cost of milk production in the south of Minas Gerais were machinery and equipment.


Downloads Statistics

Download Full History