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Income, Costs, Equilibrium and Target Prices of Dairy Farms. Case Study Zumpango, México

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Abstract: The objective is to quantify the economic and financial viability of a Representative Dairy farm. Field data were collected in June 2014, in Zumpango, Estado de Mexico, Mexico. The panels of producer technic was applied, a direct sampling process was used to select the 8 participating panelist. Variable (VC), Fixed costs (FC), economic costs (ECC), financial costs (FINC), cash flow (CF), total income (TI), net income (NI), breakeven prices and target prices were estimated. A Farm of medium level of technification and scale of 60 productive cows was analyzed. The base year is 2013. An ECC of 52,395 MXN per year, a FINC of 42,701 MXN and a CF of 39,980 MXN per year were estimated. In financial, economic, and cash flows, terms, the Farm gets a negative net income. Breakeven prices are reached only in economic and cash flow terms, under the optimistic yield scenarios. Target prices are far above of the selling price. The farm is not viable in economic, financial or cash flow terms.

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