Cost and Benefit Analysis of Dairy Farms in the Central Highlands of Ethiopia

This study was conducted to estimate costs and gross profits of dairy farms under small and large diary management in central highlands of Ethiopia. Thirty-five small and 25 large farms were randomly selected. Quantitative data was collected from sampled households/farms for six to seven consecutive months. Qualitative data was also collected to supplement the quantitative data. All crossbreed milking cows of the sample households were included for the study. The result of the study showed that small commercial farms disbursed 38% more cost than large commercial dairy farms. More than 80% of the variable costs went to feed in both small and large dairy farms. The result also revealed that large dairy farms earned 55% more annual revenue than small farms. The larger revenue share was from milk sale followed by calf sale for both large and small dairy farms. The gross margin of large dairy farms was higher than the small counterparts by more than three folds. The benefit-cost ratio was 1.43 and 2.24 for small and large dairy farms, respectively, implying that large dairy farms are more profitable than small dairy farms. The benefits from both small and large dairying indicated that dairying is a beneficial business. Shortage of land, lack of credit, lack of technical support, lack of adequate market outlet, inefficiency of AI services, abortion, high price of feed and medicine were identified as the main constraints of dairy farming. It is suggested that the need to establish feed processing machines, cull unproductive cows, empower dairy farmers and key service providers through training, promoting, complementary technology packages and market infrastructures.

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Author Diro Samuel, Getahun Wudineh, Alemu Abiy, Yami Mesay, Mamo Tadele and Mebratu Takele
Maintainer EIAR
Last Updated December 30, 2023, 20:32 (UTC)
Created March 18, 2023, 12:50 (UTC)
contributor Getachew, Meron
creator Diro Samuel, Getahun Wudineh, Alemu Abiy, Yami Mesay, Mamo Tadele and Mebratu Takele
date 2023-01-11T00:00:00
harvest_object_id ddd01e01-ced6-4683-9eea-5afa502f314b
harvest_source_id b7467cdf-8775-49cd-b162-b68283e0d13b
harvest_source_title EIAR Open Research Data
identifier https://doi.org/10.20372/eiar-rdm/N5WVP8
metadata_modified 2023-01-11T07:00:01