16.0 FINANCIAL ASSESSMENT OF SMALLHOLDER DAIRY FARMING IN A

PACIFIC ISLAND SETTING [using Samoa as an example]

Because most Samoan farmers have many enterprises operating at the same time, it is difficult to judge exactly the effect of introducing a new activity. This will affect the overall farm system in terms of the way in which resources like land, labour and money are used so the outcome of other enterprises will change. A farmer will want to maximise the benefit from the whole farming system. Below is a simplified example just looking at cattle [beef Vs dairy] and cop RA [selling husked nuts].

16.1 A GROSS MARGIN FOR A SMALL DAIRY FARM (for simplicity no deaths are included)

This is the same farm as referred to in Section 12.2. This farm has "good average" management and a full cover of batiki/hetero pasture. Currency is Samoan Tala [US$ 1 = S$ 2.50]

Farm of 12 ha: 9ha coconuts 2 au/ha 18

3ha open 2.5 7.5


25.5 au total carrying capacity

1. Stock Carried Number au/animal Total au = 25

Calves

h

5

0.22

 

b

5

0.22

yrlg

h

4

0.56

 

b

1

0.56

2yr

h

4

1.0

MA cows

 

13

1.11

Bulls

 

1

1.56

2. Income

Stock Sales- 5 bull calves 500 2500

1 heifer calf 500 500

1 2 yrs dry heifer 1000 1000

3 old cows 900 2700


6700

 

Milk $O.85/litre - net on farm

2,000 1 per lactation - 420 day Cl [calving interval] = 0.87 lactation/cow/year

= $l,479 per cow

13 cows milked 19,227

Copra 9 ha X 3000 nuts/ha/year @ $0.13 ea. 3,510

Gross Income 29,437

3. Costs

Labour 3 units @ $60 per week each (Family) 9,360

Stock purchases 1 yrlg bull 800

Animal health $30 per cow = 390

$10 per calf = 100 490

Weed control

Chemical fence spray $50, spot spraying $150 = 200

Feed Calves [milk] 10 X 56 day @ 54.0 1 day = 2800 @ 0.65 5 l = 1,820

Cows [meal] 10 X 200 days @4 kg day = l0.400 kg ~0.30 c kg = 3,120

Calves [meal] 10 X 150 days @ 1 kg day 1 500kg @ 0.3oskg = 450

Maintenance

Fences 300

Buildings 300 600

Total Farm Expenses 16,840


Farm Surplus 12,597

16.2 BEEF PRODUCTION ON THE SAME FARM (12 ha)

Selling steers for beef and (in calf) heifers for breeding at 2˝ years

 

    1. Stock Total au = 26

heifer calves 4

bull calves 4

h yrlgs 4

Strs yrlgs 4

Strs 2 yr 4

MA Cows 9

MA bull 1

Yrlg bull 1

For simplicity the same animal unit values and calving interval as the dairy farm example are used.

2. Income

Calves born 40 kg, growth rate 0.4 kg per day, meat price $3/lb.

Stock Sales (allow $20 per animal for Transport)

4 X 2˝ yr steers @ $1449 = 5,796

2X2˝yr heifers @ $l449 = 2,898

2X Old cows @ $l000 = 2,000

10,694

Copra

9 ha X 3000/ha/year @ $0.13 = 3,510

picking up and selling for coconut cream)

Total Farm Income 14,204

3. Costs

Labour

2 units @ $60 per week each (family) 6,240

Stock purchases

1 yearling bull 800

Animal Health $10 au 250

Weed control (herbicides) 200

Maintenance and Stockyard 400

Total Farm Expenses 7,890


FARM SURPLUS 6,314

 

16.3 ANALYSIS OF RETURNS

16.3.1 Comparing Smallholder beef to Smallholder dairy

(based on the example above)

Gross Margin per hectare

Beef $ 526.16

Dairy $1,049.. 75

Gross Margin per au

Beef $ 242.85

Dairy $ 503.88

16.3.2 SENSITIVITY ANALYSIS

Gross Margins at differing levels of animal performance and price received

 

Table 7. Price received per Animal

Beef Price $ lb ($ Kg)

2.60

3.00

3.40

(5.72)

(6.66)

(7.48)

Animal growth rate kg/day

0.2

700.13

815.18

915.55

0.4

1273.27

1469.16

1665.05

0.6

1721.49

1986.34

2251.18

Table 8 - Gross Margin per animal unit

Beef Price $ lb ($ Kg)

2.60

3.00

3.40

(5.72)

(6.66)

(7.48)

Animal growth rate kg/day

0.2

70.03

96.58

119.74

0.4

202.29

247.50

292.70

0.6

305.73

366.85

427.96

Table 9 - Income per cow from milk sales in a year

Milk Price $ /litre

Annual per cow

0.55

0.85

1.15

Production in litres =

870

478.50

739.50

1000.50

[Lactation total x Calving interval factor

1740

957.00

1479

2001

(365 - 420 = .89)]

2349

1292

1996.65

2701.35