Microeconomics of beef cattle production in the sinú´s river middle valley ( Monteria - Colombia): a case study

Abstract

This article aims to contrast empirically aspects of microeconomic theory of production applied to a business unit of fattened cattle standing in Monteria (Colombia) for the years 2005-2013. To this purpose the production technique used is described, the technical and economic results are evaluated, the total cost function is modeled, and a price supply function is built using econometric techniques. The results provide further empirical evidence on the use of intensive techniques in feeding with improved natural pastures, supplements and animal health care, can deliver results in physical productivity and production that result in positive economic surplus. The total cost function maintains a positive relationship with the level of product and input prices. The marginal cost is increasing and intersects with the minimum average cost function in a production level of 33,529 kilograms, corresponding to a minimum cost of $ 1,410 per kilogram. Consistent with the function of increasing marginal cost, the money supply function has positive slope to indicate that producers respond positively to the incentives of market price.