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Thesis (MSc)--Stellenbosch University, 2002. / ENGLISH ABSTRACT: Profit margins of typical farming systems in the Swartland have come under pressure because of international market forces decreasing milk and wheat prices as well as the deregulation of the agricultural marketing boards in South Africa after 1994. The profit margins of small grain production systems are specifically under pressure. It has therefore become necessary to evaluate different combinations of farming enterprises continuously. The profitability of changing farming enterprises can be examined by means of budgeting techniques. In this study the profitability of the inclusion of more home grown feed stuffs in the fodder flow program of dairies, currently run according to a zero feed lot grazing system, was investigated. The technique of Linear Programming (LP) was used in this regard. Grain production per hectare can vary to a large extent in the Swartland because of the large variation in soil forms and soil types. To accommodate these differences, a case study was conducted in each of the identified sub regions of the Swartland. The information gained from each case study was presented to a panel of producers and other experts during group discussions. Technical experts ensured that the latest available technology is applied, while the producers evaluated the practical implications of this. A further outcome of this method was that specialised subject related matters could be evaluated in group discussions focussing on the implications for the farming system as a whole. Thus, aspects related to the multidisciplinary nature of farming systems could be evaluated simultaneously. It is concluded that farm profitability can, under described circumstances be improved by including more home grown feed stuffs in the fodder flow program of the dairy production system. / AFRIKAANSE OPSOMMING: Dalende melk- en koringpryse weens nasionale sowel as internasionale markkragte, asook die deregulering van landboubemarkingsrade in Suid-Afrika na 1994, het die winsgrense van boerderystelsels in die Swartland onder druk geplaas. Die winsgewendheid van kleingraanproduksiestelsels is veralonder druk. Dit is gevolglik nodig om kombinasies van boerderyvertakkings deurlopend te evalueer. Die winsgewendheid van veranderinge in boerderybedryfstakkombinasies kan met behulp van begrotingstegnieke bepaal word. In hierdie studie is die winsgewendheid van die inskakeling van geproduseerde voere teen 'n hoër peil in die voervloeiprogram van die melkbedryfstak, wat volgens 'n voerkraal- of nulbeweidingstelsel bedryf word, by die kleingraanproduksiestelsel ondersoek. Die tegniek van Lineêre Progammering (LP) is hiervoor gebruik. Weens groot variasies in grondvorm en grondtipe in die Swartland kan graanproduksie baie varieer. Ten einde hierdie verskille te kan akkommodeer, is 'n gevallestudie winsgewendheidsontleding in elk van die geïdentifiseerde substreke van die Swartland gedoen. Die inligting verkry uit hierdie gevallestudies is aan 'n paneel van produsente en ander kundiges tydens groepbesprekings in debat geplaas. Tegniese kundiges het verseker dat die nuutste tegnologie toegepas word, terwyl produsente die praktiese implikasies hiervan kon evalueer. 'n Verdere uitvloeisel van hierdie werkswyse is dat vakspesifieke gespesialiseerde aangeleenthede in die groepbespreking beoordeel word tesame met die implikasies wat dit vir die boerderystelsel in sy geheel inhou. Sodoende word aspekte wat verband hou met die multidissiplinêre geaardheid van boerderystelsels gelyktydig ondersoek. Daar word tot die gevolgtrekking gekom dat die winsgewendheid van boerderye met kombinasies van kleingraan en melk in die Swartland, onder bepaalde omstandighede, deur die gebruik van selfgeproduseerde voergrondstowwe vir die melkproduksiestelsel, aansienlik verhoog kan word.

This study examines how Bovine Somatotropin (BST) may impact Arizona dairy producers. The results of dairy scientists experimenting with BST are summarized in terms of reported milk yields and possible changes in feeding and herd management. Dairy enterprize budgets representative of Arizona are constructed to examine how income statements may change if BST is approved. The effects of increased milk supply on Arizona milk prices are estimated using the institutional structure of the Central Arizona Order and the United Dairyman of Arizona. Results of experiments with BST in Arizona are used to generate net returns at several rates of adoption under changing milk prices for three dairy farms in Arizona.

The impacts of tariffication on Canadian milk producers were estimated via supply, price and trade flow parameters using a spatial price equilibrium model applied to milk production regions of Canada and the United States. / Two price scenarios were put forward because of supply management in Canada. The first incorporated producer prices while the second used shadow prices for Canadian producers, defined as the producer price less a reduction in price which accounts for the value of production quota. The hypothesis that tariffication reduces milk production in Canada to the extent that U.S. producers increase their exports to Canada was partly supported in scenario one but not in scenario two. Specific tariffs of $11.00/hl prevented U.S. imports to reach Qu 'ebec and Ontario. However, the rest of Canada increased its imports from Great Lakes to the detriment of Quebec and Ontario. Consequently, production decreased slightly in Qu 'ebec and increased in Ontario, whereas prices decreased significantly in both provinces. Scenario two showed ability of Qu 'ebec and Ontario to withstand American competition. Prices and production level remained unchanged while export flows to the rest of Canada increased to the detriment of the Great Lakes. / The present study investigated only a specific aspect of the tariffication proposal in the GATT and does not intend not to reflect the very complex aspects of GATT negotiations. The findings of this analysis must be interpreted with this caveat. Further studies considering other plausible tariffication scenarios or effective tariffs on an individual dairy product basis would broaden our understanding of the potential implications of tariffication.

No description available.

A study was conducted to determine the break-even point of three comparative fluid milk casing and stacking operations. The first comparative models consisted of two filling machines with the processed cartons manually cased and stacked, compared with automated casing and stacking, on a cost basis. The second comparative models consisted of three filling machines with the processed cartons cased and stacked as in the first comparative models. The third comparative models consisted of four filling machines with the processed cartons cased and stacked as in the first and second set of models. The break-even point of the first comparative models was not reached within a 24 hour period based on 260 operating days per year. However, components of automation in the packing handling phase of the fluid milk plant operation were considered. The break-even point of the second comparative models was reached after 18-1/2 hours of operation. It is advisable for the operator of this combination of filling equipment to consider automation if he is operating the plant more than 18-1/2 hours per day. If this is not feasible, then those components of automation should be considered that would result in the greatest reduction in the packing handling costs of the processed milk. The break-even point of the third comparative models was reached at slightly over seven hours of operation. The operator will realize a savings by installing the automated equipment if it is operated at or above seven hours per day. / Master of Science

Milk surplus in the U.S. dairy industry has been increasing substantially since the beginning of the 1980s. In order to analyze the surplus production situation, an interregional dairy trade model based on a spatial equilibrium framework was developed. The model included disaggregate manufactured milk markets and utilized separable programming as the solution technique. The objective of the interregional dairy trade model was to maximize the sum of producers’ and consumers’ surplus subject to the various institutional constraints incorporating unregulated and regulated market situations. Under the regulated market situation, the institutional constraints were based on the federal milk marketing order and dairy price support programs. Utilizing the interregional dairy trade model, a comparison of simulated market results and net economic effects between unregulated and regulated markets was drawn first. Results of the simulations for market results and welfare effects under pricing policy options with regard to changes in the support and purchase prices were also analyzed. Finally, a comparison of the results of simulations for simultaneous market clearing situations in butter and nonfat dry milk markets with no government purchases of these commodities under the 1982 market situation and an increasing quota system was considered. It was found that without considering the supply effect induced by price stabilizing regulations, the competitive manufactured milk market price would be lower than the 1982 support price level. The butter and nonfat dry milk markets would move toward a market clearing situation if the support price level was decreased by $1.00 per cwt for butter and by $2.00 per cwt for nonfat dry milk when cross price elasticity effects were included. Due to cross price elasticity effects, the butter market would clear at a higher price level (in terms of the support price) than the nonfat dry milk market. Simulations of simultaneous market clearing situations suggested that the 1982 butter price would be lower and the nonfat dry milk price would be higher than market clearing prices. Increases in import quotas would drop butter and cheese market clearing prices and raise the nonfat dry milk price relative to the actual 1982 case. / Ph. D.

MScAgric / ABSTRACT: Small dairy farms in South Africa are observed to have higher costs than larger farms, and whether those higher costs are due to technology or inefficiency has implications for policy. This research focused on finding the curve that best represents the relationship between average cost and level of output. That was done by relating average cost to actual output. However, it was found to be more appropriate to relate average cost to planned output on the basis that costs are more likely to reflect what the farmer expects output to be. As a result, a pragmatic two-step procedure was adopted. In the first step, the farmer’s planned output was determined by estimating a production function based on the farmer’s actual use of inputs, i.e., land, number of cows in the herd, labour, feed and veterinary costs. In the second step, the long-run average cost (LAC) curve was estimated where average cost is calculated as total cost divided by planned output and this is then related to the level of planned output. To identify the determinants of production cost thus the drivers of higher costs on small farms, the cost of milk production by farm size was decomposed into frontier and efficiency components with a stochastic cost curve and long run cost curve using data from dairy farms in KwaZulu-Natal (South Africa). Financial data of 37 farms for the period 1999 to 2007 were used in econometrics estimation of long run average cost curve (LAC) function for different level of production (as a proxy of planned output). Results show that average cost curves exhibiting variation in unit cost with output thus suggesting the existence of economies of size with larger farms being able to produce any given level of output at lower costs compared to their smaller counterparts. The study found that long-run average cost curve (LAC) for the sample of dairy farms is L-shaped rather than U-shaped.

This study presents two separate competitiveness analyses to assess changes in, and factors influencing, the long-term competitiveness of a panel of commercial milk producers in East Griqualand (EG), South Africa. The Unit Cost Ratio (UCR) method was used to measure competitiveness of EG milk producers. It is defined as the ratio of dairy enterprise accounting costs plus an opportunity cost of management at 5% of milk revenue, to total dairy enterprise revenue. The initial UCR analysis was used to partly investigate the impact of dairy market deregulation on the relative competitiveness of EG milk producers over the period 1983 to 2006. The results of this UCR analysis found that the sample of EG milk producers were not competitive based on the net local price, PL, received for milk but were competitive when dairy cattle trading income was included. This suggests that dairy cattle trading income played an important role in enhancing the competitiveness of EG dairy enterprises in the study period. Further UCR analysis revealed that differences in the inherent ability of members of the EG group to manage market deregulation impacted on the relative competitiveness of EG milk producers. The top onethird of the sample of EG milk producers remained relatively competitive from 1983 to 2006 due to higher real milk prices and lower real unit costs than producers in the bottom one-third category. Differences in relative competitiveness between the top and bottom one-third categories of producers were statistically significant. Based on the findings of the UCR analysis, a Ridge regression analysis was then used to investigate other factors influencing the long-term competitiveness of selected milk producers from EG using unbalanced panel data for the period 1990 – 2006. Results of the regression analysis showed that dairy herd size, the level of farm debt, annual production per cow, technology and policy changes over time, and the ratio of trading income to total milk income influence the long-term competitiveness of these milk producers. To enhance their competitiveness in a deregulated dairy market, relatively small and profitable EG milk producers should consider increasing herd sizes as the importance of herd size in explaining competitiveness suggests that size economies exist. All EG milk producers should consider utilising more pasture and other forages to lower feed costs and select dairy cattle of superior genetic merit to improve milk yields. / Thesis (M.Sc.)-University of KwaZulu-Natal, Pietermaritzburg, 2009.