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Economics of dual purpose production alternatives in the Mexican tropics
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Technological, marketing, and financial alternatives to the dual purpose production system in Central Veracruz, Mexico were analyzed to assess their economic viability. A large dual purpose production operation was characterized in a baseline scenario using data obtained through a panel farm process. Alternative technology and management practices were imposed upon the baseline to estimate their economic impact on the production system. Sensitivity analyses were performed on the baseline by imposing alternative marketing, financial, and macroeconomic assumptions. Simulation analyses, for the 1995-2000 period, were conducted using FLIPSIM, a whole farm simulation model developed at Texas A&M University. High interest and inflation rates had a significant effect on the performance of the scenarios studied in this work. The baseline scenario consistently showed better financial performance than the alternative scenarios. The alternative scenarios requiring low levels of investment (BST, milk cooling tank, low pasture management, and purchase of replacements) ranked the highest from a cash flow standpoint. The scenarios with the highest level of investment (stockers, stockers and purchase of replacements, and high pasture management) tended to rank in the bottom half The level of initial debt was a major factor limiting growth and sustainability during the period of study. The growth and survival of the operation is greatly affected by both the level of debt and the existing macroeconomic conditions (inflation and interest rates). This study showed the dual purpose tropical production system, represented as the baseline scenario, could survive and sustain growth under more benign macroeconomic conditions. The approach proposed in this study provides insight into the financial impact of changes in the economic and production environments for the production systems in the tropics. It also provides the advantage of testing a system well in advance of the implementation of alternatives and allows a more informed decision making process based on the assessment of the future economic performance of animal production systems. In addition, this approach could be instrumental in influencing policy makers to provide the best environment for sustainable agricultural production systems.
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Includes bibliographical references : p. 119-127.
Issued also on microfiche from Lange Micrographics.
Ochoa-Ochoa, Rene Federico (1997). Economics of dual purpose production alternatives in the Mexican tropics. Master's thesis, Texas A&M University. Available electronically from
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