Cost-benefit analysis Canavalia brasiliensis hay supplementation in Colombian dual-purpose cattle systems

Context:
In the Colombian Caribbean region, small-scale livestock farming systems are characterized by relying on Bothriochloa pertusa (Colosuana) grass for grazing, often with minimal land improvement investments. While Colosuana yields satisfactory results, its productivity and quality decline during the dry season. To
address this challenge, supplementing animal diets with legumes have proven effective, with Canavalia brasiliensis demonstrating promising outcomes in the region.

Objective:
This study aims to economically assess the supplementation of Canavalia brasiliensis hay alongside meadow enhancement for dual-purpose cattle systems in the Cesar department of Colombia during the dry season.

Methodology:
An economic analysis was conducted using the discounted cash flow methodology, which systematically organizes income and expenses for an investment project. The analysis spans an 8-year time horizon. Profitability indicators, such as net present value (NPV) and internal rate of return (IRR), were calculated for three scenarios: the traditional system, meadow improvement intervention, and Canavalia brasiliensis supplementation at three inclusion levels. Additionally, Monte Carlo simulations were employed to enhance the study's robustness through probabilistic analysis.

Results:
All evaluated systems demonstrate profitability, yielding positive NPVs. The IRR is 9.30% for the traditional approach and improves with interventions, reaching values of 16.65%, 16.79%, and 18.20%. These values consistently surpass the 6.9% discount rate. Notably, probabilistic analysis highlights dairy productivity as the most influential variable affecting profitability.

Conclusions:
Strong performance in technical indicators translates into enhanced economic outcomes. Moreover, existing regulations on milk prices underscore the pivotal role of cattle herd productivity in achieving favorable financial results.