Cost of Milk Production | Animal Husbandry & Veterinary Science Optional for UPSC PDF Download

Importance of Production Cost

• Significance: Evaluating milk production costs is crucial for both individual farmers and cooperative milk procurement pricing.
• Challenges in India: Assessing production costs is challenging in India, where a significant portion of milk comes from small and marginal farmers in rural areas.

Components of Production Cost

• Known Components: The factors contributing to milk production costs include feed, labor, animal care, technical inputs, depreciation on animals and equipment, interest on capital, and various recurring expenses.
• Feed as a Major Cost: Feed constitutes the most substantial portion, ranging from 50 to 75% of total production costs.

Evaluating Feed Costs

• Feed Evaluation: Feed costs can be determined by calculating the average daily feed given to animals and considering the prevailing market prices for different types of feed.
• Feed Components: This includes green fodder, dry fodder, concentrates, balanced feed, and other nutritional elements.

Understanding Milk Production Costs

• Key Cost Components:
  • Feed
  • Human labor
  • Investment in milch animals
  • Technical inputs
  • Depreciation and interest on capital
  • Miscellaneous recurring expenses
• Feed Costs Management:
  • Consider feed for animals during milking and dry periods.
  • Ensure maximum utilization of agricultural by-products and raw materials like molasses and urea for balanced cattle feed.
  • Co-operatives provide affordable balanced feeds to members.
• Challenges in Labor Cost Estimation:
  • Family members contribute to various tasks, making it challenging to precisely estimate their labor contribution.
  • Rough estimates can be made by assessing the time spent by different individuals.
• Investment in Milch Animals:
  • Includes costs from birth to the milking age.
  • Feed, labor, supervision, veterinary care costs contribute to the fixed capital investment.
• Incorporating Technical Inputs:
  • Nominal costs for services like Artificial Insemination, often provided by the government or cooperative unions.
  • Included in overall expenditure.
• Depreciation and Interest:
  • Factors in the depreciation of animals and capital investments, along with interest on capital.
  • Added to the cost calculations.
• Miscellaneous Expenditure:
  • Other recurring expenses are considered to calculate overall expenditure.
• Calculating Net Profit:
  • Subtracting income from sources other than milk (like dung) from overall expenditure gives the net profit.
• Managing Production Costs:
  • Varies regionally based on feed and labor costs.
  • Efficient management leads to lower costs, while poor management results in higher expenditures.
• Changing Dynamics:
  • Milk production costs are not constant.
  • Advances in crossbreeding and animal husbandry practices may increase yield, impacting costs and income.
  • Regional and seasonal variations play a role.