What is the cost of producing milk?

11noviembre-9-tarro-lecheWe see a lot of exchange and sometimes ingrown discussions arguing in favor or against a production cost, regardless of whether it is a data estimated by a theoretical model, or if it is the result of the economic management of a real producer.

To understand the complexity of the topic, we present a chart that shows the wide dispersion of results for a given period of time (updated on constant currency as of January 2017) for a group of 220 companies CREATED (with an average of 1.3 drums per company) with a line that traces the operating cost average (total Revenue-direct costs-depreciation direct/liter produced).

dispersion-de-costos

The analysis of the sample raises some concepts:

  • Only 1% of cases coincided with the same cost
  • 53% of the sample had higher costs to the average
  • The standard deviation of costs was 22%
  • The standard deviation of the price was 5%

Note: Standard deviation (SD) is a measure of how the individual values may differ from the average.

This analysis corresponds to a small sample of the dairy sector, but enough representative because movement CREATES produces around 8% of the national milk and its members produce milk in all basins of Argentina.

Marcos Snyder

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