# Assessment of the Relations for Determining the Profitability of Dairy Farms, A Premise of Their Economic Sustainability

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## Abstract

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## 1. Introduction

## 2. Materials and Methods

## 3. Findings and Discussions

#### 3.1. Distribution of Farms in Case Studies

#### 3.2. Centralized Data Analysis

#### 3.3. Correlation of Farm Size with Production, by Landforms

^{2}) was very high, given the objective of the program, namely, to identify the function that passes through most points, so this coefficient was 0.94, and r

^{2}adjusted of 0.93 assumes, in this case, that the dependent variable (profit) is explained by the independent variable (the value of the main production) in a proportion of at least 93%. Such a high coefficient of determination determines a very strong correlation coefficient (r) of 0.969, indicating a strong relation between variables (Figure 10). The value of the statistical parameter Fstat is approximately 194.9, being much higher than the value of the parameter Fcritical, in this case F

_{0.05; 1; 53}being 4.023. Therefore, the null hypothesis of equal means between variables is rejected, the quadratic mean inter-group being higher than the quadratic mean intra-group, and it can be concluded that there is a statistically significant difference between the means of the sample.

^{2}) was very high, given the objective of the program to identify the function that passes through most points, so this coefficient was 0.867 and r

^{2}adjusted of 0.84, which means, in this case, that the dependent variable (profit) is explained by the independent variable (farm size) in a proportion of at least 84%. Such a high coefficient of determination results in a very strong correlation coefficient (r) of 0.931, which indicates a strong link between the variables.

^{2}) was very high, given the objective of the program, namely, to identify the function that passes through most points, so that this coefficient was 0.907 with an r

^{2}adjusted of 0.88, which means, in this case, that the dependent variable is explained by the independent variable in a proportion of at least 88%. Such a high coefficient of determination results in a very close correlation coefficient (r) of 0.952, which indicates a strong link between the variables.

^{2}calculated of 0.92, r

^{2}adjusted of 0.90, and 95% probability, indicating that farm profit increases in direct proportion to farm size and total milk production (Figure 13). The value of the statistical parameter Fstat is approximately 57.86, being much higher than the value of the parameter Fcritical, in this case F

_{0.05; 2; 52}being 3.18. Therefore, the null hypothesis of equal means is rejected and it can be concluded that there is a statistically significant difference between the means of the sample.

^{2}calculated of 0.94, r

^{2}adjusted of 0.93, and 95% probability, indicating that farm profit increases in direct proportion to farm size and is inversely related to unit cost (suggested by the concavity of the graphical representation) (Figure 14). The value of the statistical parameter Fstat is about 80, being much higher than the value of the parameter Fcritical, in this case F

_{0.05; 2; 52}being 3.18. Therefore, the null hypothesis of equal means between variables is rejected, the quadratic mean inter-group being higher than the quadratic mean intra-group. Thus, we conclude that there is a statistically significant difference between the means of the sample.

## 4. Conclusions

## Author Contributions

## Funding

## Institutional Review Board Statement

## Informed Consent Statement

## Data Availability Statement

## Conflicts of Interest

## References

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**Figure 1.**Milk production from case studies, by counties. Source: authors’ illustration, using map chart on geographical regions in Excel.

**Figure 5.**Expenditure structure according to the minimum, maximum, and average size of the farm. Source: authors’ own elaboration.

**Figure 6.**Determining the economic sustainability of farms based on costs and the value of production. Source: authors’ own elaboration.

**Figure 7.**The correlation between farm size and total production for the 24 farms located in the plain area Source: authors’ own elaboration.

**Figure 8.**The correlation between farm size and total production for the 14 farms located in the hill area. Source: authors’ own elaboration.

**Figure 9.**The correlation between farm size and total production for 16 farms located in the mountain area. Source: authors’ own elaboration.

**Figure 10.**The equation of the value of main production influence on the level of farm profit. Source: authors’ own elaboration.

**Figure 11.**The equation of the influence of farm size on the level of profit. Source: authors’ own elaboration.

**Figure 12.**The equation of the influence of total milk production on the level of profit. Source: authors’ own elaboration.

**Figure 13.**The equation of the influence of farm size and total milk production on the level of profit. Source: authors’ own elaboration.

**Figure 14.**The equation of the influence of farm size and unit cost on the level of profit. Source: authors’ own elaboration.

Farm Size | |
---|---|

Mean | 73.44444 |

Standard Error | 17.71771 |

Median | 24.5 |

Mode | 18.66667 |

Standard Deviation | 130.1981 |

Sample Variance | 16,951.53 |

Kurtosis | 6.98522 |

Skewness | 2.81767 |

Range | 563.3333 |

Minimum | 5 |

Maximum | 568.3333 |

Sum | 3966 |

Count | 54 |

Specification | Unit | Avrg | Standard Deviation |
---|---|---|---|

Farm size | cows | 73.44 | 130.2 |

Average production | L/cow | 4554.94 | 1809.3 |

Value of main production | USD/L | 0.38 | 0.12 |

Costs for the main production | USD/L | 0.37 | 0.10 |

Variable costs | USD/L | 0.32 | 0.05 |

Material costs | USD/L | 0.30 | 0.05 |

Fixed costs | USD/L | 0.10 | 0.05 |

Labor costs | USD/L | 0.08 | 0.05 |

Labor productivity in physical expression | Man-hours/L | 0.06 | 0.0 |

Labor productivity in value expression | USD/man-hours | 10.52 | 10.96 |

Labor costs at 1000 RON total production | USD | 48.08 | 21.35 |

Material costs at 1000 RON total production | USD | 178.12 | 23.37 |

Expenses per 1000 RON main production | USD | 243.28 | 24.20 |

Profit or loss per unit of product | USD | 0.00 | 0.05 |

Taxable income rate | % | 0.2 | 10.0 |

Net income rate | % | −0.1 | 9.4 |

Profitability threshold in value units | USD | 1937.84 | 761.98 |

Profitability threshold in physical units | L | 5506 | 3048.7 |

Exploitation risk rate | % | 146.6 | 132.7 |

Security index | −0.5 | 1.3 |

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**MDPI and ACS Style**

Chetroiu, R.; Cișmileanu, A.E.; Cofas, E.; Petre, I.L.; Rodino, S.; Dragomir, V.; Marin, A.; Turek-Rahoveanu, P.A.
Assessment of the Relations for Determining the Profitability of Dairy Farms, A Premise of Their Economic Sustainability. *Sustainability* **2022**, *14*, 7466.
https://doi.org/10.3390/su14127466

**AMA Style**

Chetroiu R, Cișmileanu AE, Cofas E, Petre IL, Rodino S, Dragomir V, Marin A, Turek-Rahoveanu PA.
Assessment of the Relations for Determining the Profitability of Dairy Farms, A Premise of Their Economic Sustainability. *Sustainability*. 2022; 14(12):7466.
https://doi.org/10.3390/su14127466

**Chicago/Turabian Style**

Chetroiu, Rodica, Ana Elena Cișmileanu, Elena Cofas, Ionut Laurentiu Petre, Steliana Rodino, Vili Dragomir, Ancuța Marin, and Petruța Antoneta Turek-Rahoveanu.
2022. "Assessment of the Relations for Determining the Profitability of Dairy Farms, A Premise of Their Economic Sustainability" *Sustainability* 14, no. 12: 7466.
https://doi.org/10.3390/su14127466