The cost of underperformance in livestock Flashcards
Define productivity
the efficiency of conversion of inputs to outputs
Define profitabiluty
takes into account the costs of a livestock enterprise. This measure has enough information to assess the productivity.
Formula - productivity
= total value of outputs per unit time/ total value of inputs per unit time
- other methods include: production/ animal or per hectare (allows arable comparison)
What is a production function?
a technical relationship b/w and input and output (to identify an optimum level of production). Very important to determine rational level of production
Inputs - livestock production
- feed
- forage
- animal health care
- farmer time
List ouputs of livestock production
- meat/ milk/ live animals (i.e. positive price items)
- exceptions = negative price items (manure)
Define profit
difference between output and input
When is an economic optimum reached?
where profit is maximised
How do you determine profit on an economic optimum graph?
profit is the vertical distance (the difference) b/w total revenue and total costs
When is there a break-even point?
when total revenue = total costs
When is profit maximised on an economic optimum curve?
where slope of total revenue is line is equal to slope of total cost line. This is equal to the point where there is greatest difference b/w two lines
Define technical optimum
maximum amount of production
Define economic optimum
the maximum profit
When are the technical and economic optimums closest?
the lower the unit price of an input relative to an output, the closer the technical and economic optimums are.
What is the John Nix Farm Management Handbook?
- published every year
- up to date information on most important outputs and variables
