Economic feasibility of a complete diet industrial production project for horses

Abstract

This study evaluated the economic viability of industrial production of complete diets for equine species, using three
sources of fiber (dehydrated whole corn plant, dehydrated elephant grass, or Tifton 85 hay) submitted to two types
of thermal processing (pelleting or extrusion). A survey and elaboration of costs from the agricultural production of
roughage to the commercialization of the final product was conducted. Three scenarios were compared: S1 – basal
price of complete diet (ingredients supplied together, but purchased separately); S2 – price of S1 plus 10%; S3 – price
of S1 plus 20%. Profitability indicators applied were internal rate of return (IRR) and net present value (NPV). Simple
payback was used to verify return on investment time. Sensitivity analysis was performed to identify the items that
most influence the economic results. Simple payback ranged from one to six years. The highest values of IRR (>100%
per year) and NPV were obtained for the extruded diets in scenario 3. Only the pelletized diet containing Tifton 85 hay
in scenario 1 was not economically feasible, presenting negative IRR. The inputs make up the item with the greatest
burden on the production process (mean 89%). Except for pelletized diet containing Tifton 85 hay in scenario 1, the
other projects present IRR above the minimum attractiveness rate (MAR) and were considered economically feasible.