Economical Evaluation through Gross Profit and Cash Flow in Different Beef Cattle Systems in Rio Grande Do Sul

Beef cattle production is suffering numerous difficulties in productive and economical terms in the state of Rio Grande do Sul. Expanding new markets, competition with other meats, external competition through imported Mercosul beef, new growth and slaughter processes bring new challenges to the Brazilian livestock production. In the case of Rio Grande do Sul, another factor to be considered is the competition with Central States in the internal market. Meat prices received by farmers in the last years stayed constant, but prices of the main production inputs are still rising. This scenery brought continuous income decrease to the beef cattle farmers. As a result, many farmers are selling part of their lands or leaving beef cattle production. This paper aims to compare gross income and cash flows in three farms with different beef cattle systems during the years of 2003 and 2004, as well as analysing the cost percentage of different inputs necessary to the production systems. The farms are located in different regions: Campanha, Depressão Central and Fronteira Oeste, representing important agricultural production regions in the in Rio Grande do Sul state. The results show that without technological modernisation in beef cattle production systems and integration with agriculture, it becomes difficult to remunerate all the production factors. Planning allows a better income distribution, reducing the months of negative cash flow. However, the low profit per area demonstrates the gravity of the economical situation of beef cattle farmers in Rio Grande do Sul