Profitability gap in the milk production chain: Evidence from Serbia

• Main Authors: Zekić Stanislav, Mijić Kristina, Jakšić Dejan, Milenković Ivan
• Format: Article
• Language: English
• Published: Naučno društvo agrarnih ekonomista Balkana, Beograd; Institut za ekonomiku poljoprivrede, Beograd i Akademija ekonomskih nauka, Bukurešt 2016-01-01
• Series: Ekonomika Poljoprivrede (1979)
• Subjects: profitability; milk production; dairies; ROA; ROE
• Online Access: http://scindeks-clanci.ceon.rs/data/pdf/0352-3462/2016/0352-34621602485Z.pdf

The main goal of this paper is to compare profitability of large dairies (processors) versus large milk producers, i.e. farms with 100 or more cows, organized as companies. Profitability is measured by following indicators: return on assets and return on equity. Profitability gap analysis shows that milk processors achieved significantly higher profitability compared to cow breeders. Furthermore research results suggest that the existence of differences in the level of profitability among the participants in the milk production primarily affects capital turnover, and then the profit margin.