Importance and use of the IOFC indicator in the management of dairy cattle herds
Milk is one of the key commodities in terms of maintaining the appropriate structure of Czech agriculture. In order to maintain current production and further development, besides the goals in the area of production and reproduction indicators, it is also necessary to achieve in the long term the positive profitability of production. In management work, the Income Over Feed Costs (IOFC) indicator is often used in addition to profitability indicators in assessing the economic efficiency of cattle breeding. The indicator is calculated as the difference between sales revenue and feed costs. Its advantage is that it does not take into account fixed costs and subsidies in its calculation and measures the inputs (feeds) with outputs (milk production). In the Czech Republic, on the basis of data from farms, the IOFC indicator in the period 2008 to 2017 in the annual average in CZK per cow per day varied between 54 and CZK 119 CZK, averaging 88 CZK. The IOFC indicator directly affects 3 main factors – milk yield, milk price and feed costs. With an increase in milk yield by 1 000 liter per cow per year, according to the model estimate, the IOFC will increase by 9 CZK per day and its increase may be between 5 and 14 CZK per day, depending on the price of the milk sold.
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