Profitability of milk production in the Czech Republic in 2016
The dairy cattle sector is an important area of livestock production in the Czech Republic. Achieving a certain level of profitability is a necessary condition for further development of this sector. However, an average negative profitability of 7.6 % was found in the analysed group of dairy farms in 2016. The observed loss of 5,296 CZK per cow per year and 0.64 CZK per l of milk is due to a year-on-year decrease in milk prices. The average costs of 8.88 CZK per l were higher than sales revenue and received subsidies including two packages of additional support payments. The detailed analysis confirmed that costs and profit are largely dependent on the level of marketed milk per cow. The level of profitability was also differing according to the breed used and the production area. Based on the break-event point analysis it was determined that in the case of the economic situation in 2016 (including subsidies), the amount of marketed milk per cow would have to be 9,754 l to reach a zero profit, which is a rather difficult task to achieve. In 2017, according to current information, a higher profitability in dairy cattle industry is expected due to increasing milk prices.
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