Some aspects of evaluating the cost efficiency level in dairy farming

The problems related to the level of economic efficiency of dairy farming depending on the level of production intensity are analyzed. The paper emphasizes that the theory of costs is one of the basic in economics and the object of constant attention of scientists. The objective of the study is to assess the impact of the level of costs per cow on the efficiency of milk production and test the relative cost efficiency ratio on the example of a set of enterprises. The agricultural enterprises of Harkivska oblast selling milk as part of their marketable products are the object of the study. The set of studied enterprises is divided into five groups with a cost level from UAH 30,000 per cow to more than UAH 60,000 per cow. A clear relationship between the level of costs and the size of enterprises is found. The dependence shows that enterprises with higher production intensities have more livestock and agricultural land. In the group with a cost level of up to UAH 30,000 per head, one enterprise has on average 157 heads and 1,805 hectares of agricultural land, in the group with a cost level of more than UAH 60,000/head – 559 heads and 4,266 hectares of agricultural land. The paper also establishes that the level of costs per cow very closely determines the level of its productivity. In the group with a cost level of up to UAH 30,000 per head, the average productivity of animals was 4,257 kg/head, in the group with a cost level of UAH 40,000 to UAH 50,000 per head – 6,787 kg/head, and with a cost level of over UAH 60,000 per head – 10,178 kg/head. Approbation of the proposed relative cost efficiency ratio made it possible to establish that this parameter allows assessing both economic and technological efficiency of milk production. The value of the relative cost efficiency ratio in terms of income was over 1 in 38 enterprises and, accordingly, less than 1 – in 39 enterprises. The value of the relative cost efficiency ratio in terms of productivity was over 1 in 23 enterprises and lower in 54 enterprises.