Production Models and Costs

Beef Production Model.

Backgrounding

The following model is based on a 1000 hectares module.

The model is based on leasing 1000 hectares of land. Business starts buying 2000 calves with 150 kilos and bringing them to 290 kilos in 365 days when they are sold.

The production system is based on natural grass, improved with phosphate fertilizer and a local variety of Lotus (a leguminosae).

Investment

Item

US$

Pasture improvement

35,000

Electric Fences

6,000

Working capital

335,000

TOTAL

376,000

Production costs

Item

US$

Cost of 2000 calves

250,000

labor

6,000

vaccination

8,000

Fertilization

20,000

Lease of land

30,000

Management & tech. assistance

18,000

Miscellaneous

3,000

TOTAL (12 months)

342,000

Results

Item

US$

Receipts from sales

397,880

Purchase of calves

250,000

Production expenses

85,000

TOTAL CASH RETURNS

62,880

Return on Investment

16,7%

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Finishing steers on cultivated pastures

The following model is based on a 1000 hectares module. Business is based on leasing 1000 hectares of land. It starts buying 1600 steers with 290 kilos and bringing them to 450 kilos in 365 days when they are sold.

The production system is based on cultivated pastures seeded with no till technology. Pastures are based on a mix of Rye grass, Festuca, Lotus and White Clover, and fertilized with phosphate

Investment

Item

US$

Pasture improvement

80,000

Electric Fences

10,000

Working capital

397,000

TOTAL INVESTMENT

487,000

Production costs

Item

US$

Cost of 1600 steers

324,800

labor

12,000

vaccination

8,000

Fertilization

30,000

Lease of land

30,000

Management & tech assist.

24,000

miscellaneous

5,000

TOTAL (12 month)s

433,000

Results

Item

US$

Receipts from sales

558,720

Purchase of steers

324,800

Production expenses

109,000

TOTAL CASH RETURNS

124,920

Return on Investment

25,6%

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No-till soybean production

The following table shows costs and returns of soybean production in Uruguay. Business model is based on leasing land and outsourcing of all operations.

Costs and returns (year 2002-2003)

item

quantity

unit

Unit price (US$)

TOTAL

         

Seeds

80

kg

0,28

22,4

         

Fertilizer

130

kg

0,22

29,1

         

Other inputs

     

48,22

inoculant

     

5,92

Carboxin+Tiram

     

2,16

Glifosato

     

17,2

Cypermetrina

     

2,48

Clorpirifos

     

11,5

Endolsulfan

     

8,96

         

Operations

     

79,9

fertilizing

     

3,4

spraying

     

26,5

seeding

     

20

harvest

     

30

         

Post harvest

     

34,5

hauling

     

12

Storage

     

9

drying

     

13,5

         

Others

     

16,1

insurance

     

14,0

taxes

     

2,1

         

Land leasing

     

90

         

TOTAL DIRECT COSTS

     

320,2

         

Yield Ton/hect.

3,000

kg

   

Price per Ton.

   

170

 

INCOME

     

510,0

         

GROSS MARGIN (income – direct costs)

     

190,2

         

Management

     

18

NET MARGIN

     

172,2

         

Total cost per ton. ( 3 tons per hectare)

     

112,7

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