Economic and financial viability of small-scale dairy systems in central Mexico: economic scenario 2010–2018

A simulation Monte Carlo model was used to assess the economic and financial viability of 130 small-scale dairy farms in central Mexico, through a Representative Small-Scale Dairy Farm. Net yields were calculated for a 9-year planning horizon by means of simulated values for the distribution of input and product prices taking 2010 as base year and considering four scenarios which were compared against the scenario of actual production. The other scenarios were (1) total hiring in of needed labour; (2) external purchase of 100 % of inputs and (3) withdrawal of subsidies to production. A stochastic modelling approach was followed to determine the scenario with the highest economic and financial viability. Results show a viable economic and financial situation for the real production scenario, as well as the scenarios for total hiring of labour and of withdrawal of subsidies, but the scenario when 100 % of feed inputs for the herd are bought-in was not viable.