Analysis of Suitable Farm Size for Fattening Pon Yang Kham Cattle

Abstract

Pon Yang Kham Livestock Cooperative Limited (PYK Coop) is a local business organisation located in Sakon Nakhon province, Thailand. It has an essential economic role in assisting farmers and the community by creating a fair income distribution. However, PYK Coop has been facing problems from an oversupply of fattening cattle and the numbers involved in cattle production. This research investigated the costs and returns of production and the suitable farm size for beef cattle production to supply PYK Coop. The primary data were collected from 409 farmers in the cooperative using a questionnaire. The costs and returns of production were analysed and classified by the size of the farm to determine the most appropriate farm size for investment. The results revealed that the average number of cattle for individual farmers was 10.10 consisting of 3.50 bulls and cows, 2.64 calves and growing cattle, and 3.50 feedlot cattle. The cost of cattle production was divided into variable and fixed costs, which ranged annually between THB 17,279.13 and THB 300,185.88. The total annual income was THB 274,836.43. The annual net return of production (total revenue minus cost) was THB 25,984.81, while the annual net return of production per head of cattle was THB 25,984.81. The optimal farm size for beef cattle for the cooperative was a medium-sized farm. Overall, the results suggested that PYK Coop should encourage farmers to raise fattening cattle as a part-time occupation and aim to have no more than 10 head of cattle per farm. In doing so, PYK Coop should adjust the slaughter quota in accord with the number of beef cattle supplied by the farmers and should increase distribution channels to accommodate future production potential.