Investigate the effect of management factors on production and profitability of industrial dairy cattle breeding farms: the case study of southern Tehran province

One of the main factors affecting on the technical and economic performance of farms and livestock is the ability or capacity management. Main goal of farm management is achieving specific performance, profitability and productivity; there for measurement management and performance in livestock farms are necessary. Considering the necessity of increasing production and quality in the dairy industry, to investigate the effect of different inputs and also total factor productivity and management impact on output and profitability, milk production and profit functions, were estimated using Ordinary Least Squares (OLS) method. In this study, data and information were collected by studying documents, observation and interview procedures. Results of production and profit functions estimation showed that productivity and management have positive significant effects on output and profitability. The total factor productivity of them was measured using Tornqvist-Theil indicator; total factor productivity of farms was calculated 0.92 in average. Also, management index for each farm were measured using Multiple Attribute Decision Making (MADM) techniques; the average of management indicator were obtained 0.55. Among the variables included in the production function, two edible inputs; concentrates and alfalfa, and then the labor, respectively have the highest milk production elasticity. It was also showed that the fuel input was used consumedly and in non-economic region of production. Results of profit function estimation showed that fuel price after the price of alfalfa have the greatest negative impact on profitability of dairy farms; on the other hand, concentrates price, wages and cost of each time artificial insemination, have the positive effect on profitability.