The analysis of silage maize production on the basis of an economics model

Buzás, Ferenc Ede – Supp, György

Of all fodder crops, silage maize is used in the greatest quantity on Hungarian dairy farms. The production and transportation of silage is a costly process and causes a number of problems in accounting. The current study presents the findings from the application of a descriptive, simulation model, covering in detail nearly all factors involved in fodder crop production. Based on input data, the model evaluates the structure of production costs detailing both the cost types and way of accounting, while it takes into account the value of supports and some alternative costs. The model calculates mid-prices associated with profit expectations, which include costs as well as interest rate requirements of assets. The zero-profit version may also perform a kind of sensitivity test indicating the effects of changes in yield, the distance between cultivated land and farm premises, and fluctuations in fuel price. Calculations show that silage maize production is not profitable under a yield of 25t/ha, unless the distance of transportation is less than 10km. Changes in fuel prices do not affect considerably the mid-price. Our modeling indicates that under present accounting practices farms in Hungary producing crop fodder may potentially suffer from a loss of HUF 1.5 billion every year.

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