Financial Evaluation, Under Conditions of Risk, in a Family Dairy Production System
César Otaviano Penna Júnior *
General Education Office, Instituto Federal de Educação, Ciência e Tecnologia do Espírito Santo ‒ Campus Alegre, Municipality of Alegre, State of Espírito Santo, Brazil.
Rogério Figueiredo Daher
Agricultural Science and Technology Center, Universidade Estadual do Norte Fluminense Darcy Ribeiro ‒ UENF, Municipality of Campos dos Goytacazes, State of Rio de Janeiro, Brazil.
Paulo Marcelo de Souza
Agricultural Science and Technology Center, Universidade Estadual do Norte Fluminense Darcy Ribeiro ‒ UENF, Municipality of Campos dos Goytacazes, State of Rio de Janeiro, Brazil.
Niraldo José Ponciano
Agricultural Science and Technology Center, Universidade Estadual do Norte Fluminense Darcy Ribeiro ‒ UENF, Municipality of Campos dos Goytacazes, State of Rio de Janeiro, Brazil.
Gercílio Alves de Almeida Júnior
Department of Animal Science, Universidade Federal do Espírito Santo, Municipality of Alegre, State of Espírito Santo, Brazil.
Ismail Ramalho Haddade
General Education Office, Instituto Federal de Educação, Ciência e Tecnologia do Espírito Santo ‒ Campus Santa Tereza, Municipality of Santa Tereza, State of Espírito Santo, Brazil.
Ivan Jannotti Wendling
Department of Animal Science, Universidade Federal do Espírito Santo, Municipality of Alegre, State of Espírito Santo, Brazil.
Wanessa Francesconi Stida
Agricultural Science and Technology Center, Universidade Estadual do Norte Fluminense Darcy Ribeiro ‒ UENF, Municipality of Campos dos Goytacazes, State of Rio de Janeiro, Brazil.
Kesia Faria Vidal
Agricultural Science and Technology Center, Universidade Estadual do Norte Fluminense Darcy Ribeiro ‒ UENF, Municipality of Campos dos Goytacazes, State of Rio de Janeiro, Brazil.
Rafael Souza Freitas
Agricultural Science and Technology Center, Universidade Estadual do Norte Fluminense Darcy Ribeiro ‒ UENF, Municipality of Campos dos Goytacazes, State of Rio de Janeiro, Brazil.
*Author to whom correspondence should be addressed.
Abstract
Aims: This study analyzed, in comparative terms, the competitive potential of family farming using an intensive milk production system based on the intermittent stocking in irrigated tropical pasture; it also evaluated the financial results before and after the implementation of an appropriate technology in the intensification process.
Study Design: The article is based on an opinion about a subject of major interest aimed at generating discussion.
Place and Duration of the Study: The study was conducted based on data collected from a family farming property located at the municipality of Alegre, State of Espírito Santo, Brazil, between 2011 and 2013.
Methodology: Cash flow spreadsheets were organized, taken into consideration two deterministic scenarios (with and without the implementation of the proper technology), evaluated the net present value (NPV at 6%) and the internal rate of return (IRR). Subsequently, a sensitivity analysis was carried out, and, considering the items with the greatest contribution in the financial indicators, the Monte Carlo Simulation method was used, obtaining the risk in the decision to invest under each situation studied.
Results: The results of NPV6%, estimated according to the opportunity costs of capital, and the IRR would exceed the values of alternative investments with returns of 6% by US$ 1,830.71 and would return the capital by 6.25%, respectively.
Conclusion: It was concluded that the intensive pasture milk production system has potential to be an alternative for income generation for family farming.
Keywords: Competitiveness, intensification, internal rate of return, technology transition, net present value, Monte Carlo Simulation.