The impact of corn and soybean prices on the Minas Gerais dairy sector

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Photo: RIBEIRO, Paulo.

Concentrated feeds play an important role in milk production, both from the nutritional as the economic aspects, especially for animal production. The behavior of corn and soybean meal prices, for instance, have an important weight in the formation of milk production costs and consequently on the profitability of dairy farming. The current agricultural markets have shown a rise in prices of these grain-based brans. Milk production in Minas Gerais appears as one of the most important activities for the state's economy, which is traditionally the largest Brazilian producer. Moreover, this activity is crucial for the subsistence of countless families living exclusively from this income. However, models of milk production systems (MMPS) are disparate in Brazil in general and in Minas Gerais, in particular. Thus, the increase of costs is felt in different ways and in varying intensities, being relevant scaling the effect on dairy farmers in the State. This project aimed to characterize the different models of milk production systems in Minas Gerais and identify those most affected by changes in the price of the concentrate. Specifically, the purpose of this project included efforts to: (A) Identify the MMPS still unknown in five meso-regions of Minas Gerais, (B) Elucidate the share of the concentrate feed in the total costs of all MMPS known to the State, (C) Comparatively analyze these MMPSL and identify which concentrate feeds have greater influence on the costs, (D) Characterize the scope of the MPPS most harmed in terms of farmers and milk production, and (E) Conduct workshops and write scientific and dissemination papers aiming at advising policy-makers and producers on the results of the project. In order to conduct this research we collected data in five regions of the Minas Gerais State (Triângulo Mineiro, Sul de Minas, Zona da Mata, Campo das Vertentes and Norte de Minas) that account for 56.8% of the State milk production, and 57.3% of the number of dairy farmers. Three milk production systems were identified in each region in terms of technological use (low, medium, and high technology). Corn and soybean based concentrate was observed in about 84% of the dairy farms. Moreover, the weight of concentrate in the total cost ranged from 8.4% a 49.5%. In farms with low use of technology corn and soybean represented 15% of the total cost while in medium, and high technological farms that share was about 11.7%, and 13.6% respectively. When the content of the concentrate was analyzed, an inverse relationship between the weight of corn and soybean in the concentrate and technological standard was verified. Overall, farms with high technological standard have more options to substitute corn and soybean in the concentrate. Therefore, it is important to search for alternative ingredients to feed dairy cows whenever corn and soybean prices go up.

Status: Completed Start date: Tue Jul 01 00:00:00 GMT-03:00 2008 Conclusion date: Wed Jun 30 00:00:00 GMT-03:00 2010

Head Unit: Embrapa Dairy Cattle

Project leader: Glauco Rodrigues Carvalho

Contact: glauco.carvalho@embrapa.br

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