Factors Affecting Acceptance of Beef Farming Standards (P. Chaisombut et al.) 177 J I T A A Journal of the Indonesian Tropical Animal Agriculture Accredited by Ditjen Riset, Teknologi dan Pengabdian kepada Masyarakat No. 164/E/KPT/2021 J. Indonesian Trop. Anim. Agric. pISSN 2087-8273 eISSN 2460-6278 http://ejournal.undip.ac.id/index.php/jitaa 47(3):177-183, September 2022 DOI: 10.14710/jitaa.47.3.177-183 Factors affecting economic profits of Phon Yang Kham beef cattle farming in Sakon Nakhon province P. Chaisombut1, H. Umpapol2, R. Hanmontree1, P. Hanmontree, C. Srilapat1, P. Sawnongbua2, C. Chaisitipatana4, L. Lertjunthuk1 and N. Rapankum1,* 1 Department of Agribusiness Administration, Faculty of Agricultural Technology, Sakon Nakhon Rajabhat University. Sakon Nakhon, 47000 - Thailand 2 Department of Animal Science, Faculty of Agricultural Technology, Sakon Nakhon Rajabhat University. Sakon Nakhon, 47000 - Thailand 3 Department of Food Science and Technology, Faculty of Agricultural Technology, Sakon Nakhon Rajabhat University. Sakon Nakhon, 47000 - Thailand 4 Kalasin Rice Seed Center Phon Thong, Meaung Kalasin, Kalasin 46000, - Thailand *Corresponding E-mail: narawut@snru.ac.th Received May 06, 2021; Accepted November 24, 2021 ABSTRACT The study aimed to determine factors affecting economic profits of beef cattle business in Sakon Nakhon Province. A sample of 400 members of Kor Ror Por Klang Phon Yang Kham Livestock Coop- erative Limited was determined by using Taro Yamane method, and binary logistic regression analysis was used to analyze the data. The findings showed that the variables with the statistical significance of 0.01 included concentrate feeds, roughage, and the raised period of less than or equal to 12 months. They were statistically significant at 0.001 0.000, and 0.000 respectively, and the odd ratios were 1.387, 0.921, and 5.697 respectively. Additionally, the variables with the statistical significance of 0.05 includ- ed Charolais cattle (62.50%) and farm location. The two variables were statistically significant at 0.023 and 0.039 respectively with the odd ratios of 5.083 and 0.595 respectively. If the cows are fed on 1 more kg/day of more concentrated feed, it is likely for the farmers to increase economic profit by 0.921 times and 1.387 times respectively. The probability of economic profit is by 5.697 times if the cattle are raised no more than 12 months. The cross-bred cattle with 62.50% Charolais breed showed the proba- bility for the farmers to gain economic profit by 5.083 times. Finally, those who had farms located next to the farm family’s home were more likely to gain less economic profit by 0.595 times. Keywords: Factors affecting, Economic profits, Phon Yang Kham beef cattle, Logit model. mailto:narawut@snru.ac.th 178 J. Indonesian Trop. Anim. Agric. 47(3):177-183, September 2022 INTRODUCTION In the past, Thai farmers raised cattle for agricultural use as labour, but now the cattle farming has been for beef production to meet increasing domestic and international demand. To develop and expand beef cattle farming as sustainable profitability for farmers, the govern- ment has promoted it through incentives and pol- icy support (Division of Livestock Extension and Development, 2012). Kho Khun refers to a type of beef cattle through the rearing for rapid growth with the maximum quantity and quality of roughage and concentrate feeds so that the cattle (not more than 3 years of age) deposit fat within muscles which is considered premium beef with higher selling price than those fed on only roughage (Suwanlee, 2012). The rearing of beef cattle in Sakon Nakhon has been extensively active in order to sell to cooperatives and also to meet local beef con- sumption demand. Kor Ror Por Klang Phon Yang Kham Livestock Cooperative Limited, reg- istered on June 3, 1980 and located in Ba Phon Yang Kham, Moo 10, Non Hom Sub-district, Mueang District, Sakon Nakhon Province, has its members who are beef cattle farmers. Its objec- tives are to provide farmers with production in- puts and to be a buying source of their cattle. In 2018 there were 6,401 members (Kor Ror Por Klang Phon Yang Kham Livestock Cooperative Limited, 2019). At the beginning, the cooperative gave support to members in the forms of person- nel, location, small-scale slaughterhouse and re- frigerated trucks by the French government, equipment in cold storage rooms for carcasses by the German government. Although beef con- sumption demand has increased substantially, the processing system remains conventional, and it results in quality of beef products. It is crucial that Kor Ror Por Klang Phon Yang Kham Live- stock Cooperative Limited improves the produc- tion system in terms of both quantity and quality (Kor Ror Por Klang Phon Yang Kham Livestock Cooperative Limited, 2001). Phon Yang Kham beef of Sakon Nakhon has been well known for its high quality domestically and internationally. After butchering, beef aging is required to en- hance tenderness and flavour. It has been recom- mended by Sakon Nakhon Provincial Livestock Office and Governor’s Office of Sakon Nakhon as one of the provincial top products, and accept- ed countrywide. Moreover, on June 28, 2016 Phon Yang Kham beef was approved by Depart- ment of Intellectual Property to be GI registered product. This contributes to community income distribution and the promotion of sustainable beef farming. The success of beef farming generally is determined by profits and losses. Therefore mak- ing profits is the main objective in livestock farming after deducting production cost from the revenue of sales. It has been discussed that cattle feed is considered the biggest cost in beef farm- ing (Kalangia, 2016). Even though farmers can maximize the use of agricultural or agro- industrial post-production materials during har- vest seasons, they have to be responsible for cat- tle feed during dry seasons, artificial insemina- tion cost, medicine, and supplements, cattle housing and equipment, and household labour cost. In order to succeed in beef farming, the farmers need to be aware of economic profit af- fecting factors. The achievements contribute to the cooperation stability and the country econo- my. The researchers are aware of the signifi- cance of cost, return, and net economic profit of beef farming, and aim to determine factors af- fecting economic profit of beef cattle business. Then the factors can be applied in the commer- cial improvement of beef cattle farming based on the economic profit the farmers gain. This helps farmers to compete in changing international markets, ensure consumers, and eventually make a good living in beef cattle farming sustainably. MATERIALS AND METHODS Population and Sample This survey research used interviews to col- lect data. The population of the study included 4,327 beef cattle farmers, and they were mem- bers of Kor Ror Por Klang Phon Yang Kham Livestock Cooperative Limited in 2018. The sam- ple size (366.15) was calculated by using Yamane (1973) formula with a static error of 5%. 400 was determined to be the sample size in order to pre- vent probable errors from the data collection pro- cess. The samples were selected based on quota sampling which is a non-probability sampling method by considering the proportion of the pop- Factors Affecting Acceptance of Beef Farming Standards (P. Chaisombut et al.) 179 ulation of beef cattle farmers in each district of Sakon Nakhon, and then accidental sampling was used to interview those who were qualified and willing to participate until the total number was reached. Data Analysis and Interpretation Binary logistic regression analysis was used with the cases of multiple independent variables by including factors into the model to determine those that affect economic profits of Phon Yang Kham beef cattle farming business as follows (Greene, 2003): Pi = F(Y) = F(α + βi Xi) = 1/(1+e-Y) When Pi = the probability of economic profit farmers gain from Phon Yang Kham beef cattle farming and based on factor Xi e = 2.718 (based on logarithm) Y = The possibility of economic profit farmers gain from Phon Yang Kham beef cattle farming: Y = 0 referring to the economic profit from Phon Yang Kham beef cattle farming  0; and Y = 1 referring to the economic profit from Phon Yang Kham beef cattle farming > 0 The equation above can be converted with logarithmic as follows: Log [Pi/(1-Pi)] = Y = α + β1 OC + β2 FA + β3 TR + β4 CB1 + β5 CB2 + β6 CB3 + β7 CON + β8 RO + β9 CER + β10 EX + β11 LO + β12 RP1 + β13 RP2 The independent variables used in the study to determine factors affecting economic profit of Phon Yang Kham beef cattle farming business are shown in Table 1. RESULTS AND DISCUSSION Regarding economics cost and return of Phon Yang Kham beef cattle farming of average 14.53 months from a sample of 400, the total cost was 73,369.00 THB/head while the average vari- able cost was 71,289.97 THB/head or 97.17% of the total cost. The highest variable costs included breeding cost of 29,114.16 THB/head (39.68%), roughage cost of 15,075.16 THB/head (20.55%), concentrate cost of 12,591.73 THB/head (17.16%), labour cost of 10,703.73 THB/head (14.59), mo- Table 1. Description of variables Independent Variables Description and Measurement Symbol Main occupation 1 = Beef Castle 0 = Other OC Family labour 1 = Yes 0 = No FA Training on knowledge of cattle 1 = Yes 0 = No TR Level of Charolais breeding CB4 = 75.00%* CB3 = 62.50% CB2 = 50.00% CB1 = Not certain CB Concentrate feed Quantity Concentrate feed for Beef cattle (Kg./Head/Day) CON Roughage Quantity Roughage for Beef cattle (Kg./Head/Day) RO Standard certification 1 = Yes 0 = No CER Experience Experience in raising Beef cattle (Year) EX Farm location 1 = Next to home 0 = Away from home LO Beef cattle rearing period RP3 = Greater than or equal to 15 month* RP2 = 12 - 15 Month RP1 = Less than or equal to 12 month RP * Reference groups 180 J. Indonesian Trop. Anim. Agric. 47(3):177-183, September 2022 lasses of 1,932.90 THB/head (2.63%), utilities of 524.97 THB/head (0.72%), vaccines and medicine of 473.41 THB/head (0.65%), opportunity cost of variable investment of 297.82 THB/head (0.41%), mineral supplements of 267.74 THB/head (0.36%), transportation cost of 258.35 THB/head (0.35%), and cattle fattening cost of 50.00 THB/ head (0.07%). The total average fixed cost was 2,079.03 THB/head or 2.83% of the total cost where the highest fixed costs included interest cost of 995.39 THB/head (1.36%), depreciation of 985.24 THB/head (1.34%), land rental cost of 92.26 THB/head (0.13%), and opportunity cost of fixed investment of 6.15 THB/head (0.01%). In terms of return on investment in Phon Yang Kham beef cattle farming in Sakon Na- khon, the average total return was 78,887.54 THB/head. The number was broken down into the income from selling cattle to the cooperative of 74,755.02 THB/head, financial support for new born calf of 1,499.52 THB/head, and income from selling manure of 2,633.00 THB/head. Con- sequently, the net return after deducting the costs from total income was 5,518.54 THB/head (Table 2). Results of the logistic model analysis The variables that affect economic profita- bility of Phon Yang Kham beef cattle farming were determined by using Pearson product mo- ment correlation coefficient, and it was found that family labour and concentrates were corre- lated at the most significant level at -0.236 which was lower than 0.75. Multicollinearity, therefore, did not occur in this case. According to Hosmer- Lemeshow goodness of fit test (Rossi, 2009), the fitting of the model was at 8.230 which was low- er than 15.507 (X2(0.05. 8)), 8and the P-Value was 0.411. It was concluded that the model showed the goodness of fit at the significance level of 0.05 with the accuracy of prediction of 73.80% on average. The results of binary logistic regression analysis revealed the variables with statistical significance of 0.01 including concentrates (CON), roughage (RO), and the rearing period of no more than 12 months (RP1) with P-Values of 0.001, 0.000, and 0.000.The variables with statis- tical significance of 0.05 included the percentage of Charolais breed of 62.50% (CB3) and the farm location (LO) with P-Values of 0.023 and 0.039. The variables were indicated to affect the eco- nomic profit of Phon Yang Kham beef cattle Table 2. Average economic costs and returns of beef cattle of farmers in Sakon Nakhon Province. Component Cash (Baht/Head) Non Cash (Baht/Head) Total (Baht/Head) Percentage 1. Total cost 49,557.90 23,811.10 73,369.00 100.00 1.1 Variable cost 48,562.51 22,727.45 71,289.97 97.17 Breed cost 20,416.13 8,698.03 29,114.16 39.68 Roughage 11,630.97 3,444.19 15,075.16 20.55 Concentrate feed 12,591.73 0.00 12,591.73 17.16 Molasses 1,932.90 0.00 1,932.90 2.63 Mineral supplement 267.74 0.00 267.74 0.36 Vaccination and Medication 473.41 0.00 473.41 0.65 Labor 416.32 10,287.41 10,703.73 14.59 Registration fee 50.00 0.00 50.00 0.07 Transportation 258.35 0.00 258.35 0.35 Electricity, water and gasoline 524.97 0.00 524.97 0.72 Opportunity cost of capital 0.00 297.82 297.82 0.41 1.2 Fixed cost 995.39 1,083.65 2,079.03 2.83 Depreciation 0.00 985.24 985.24 1.34 Land rental 0.00 92.26 92.26 0.13 Interest 995.39 0.00 995.39 1.36 Opportunity cost of capital 0.00 6.15 6.15 0.01 2. Total income 77,864.29 1,023.25 78,887.54 3. Net profit 28,306.39 5,518.54 Factors Affecting Acceptance of Beef Farming Standards (P. Chaisombut et al.) 181 farming in Sakon Nakhon (Table 3). Discussions 1. Cattle breeds: it has been found that the percentage of Charolais breed of 62.50% (CB3) with the P-Value of 0.023 and the odd ratio of 5.083 positively affect economic profit at the reliability level of 95.00%. The farmers therefore have more possibility to gain economic profit than those with the Charolais breed to gain eco- nomic profit than those with the Charolais breed of 75.00% by 5.083 times. Breeds of beef cattle play a significant role in beef cattle farming. The crossbreeding of Charolais and Brahman or Charolais and native cattle has been growing in number as a result of high economic return farm- ers earn. This result is consistent with Marshall et al. (2020) found that increasing the management level of any of the breed or cross-breed types under consideration, including the indigenous zebu animals, resulted in an increased net benefit of 2.2- to 2.9-fold. Boonprong et al. (2008) have also discovered that Tak breed was developed from 37.5% American Brahman and 62.5% Charo- lais breeds. The Kabinburi breed was developed from 50% German Simmental crossed with 50% Brahman for enhanced heat tolerance, fertility and growth. 2. Concentrates and roughage 2.1 Concentrates: The variables with the P- Value of 0.001 and odd ratio of 1.387 indicate positive effects on economic profit at the reliabil- ity level of 99.00%. In other words, if the cattle are fed on 1 more kg of concentrate feed (CON) per day, the probability of economic profit gained is by 1.387 times. 2.2 Roughage: The variables with the P- Value of 0.000 and odd ratio of 0.921 when B is - 0.082 confirms the inverse effects on economic profit at the reliability level of 99.00%. This im- plies that if the cattle are fed on 1 more kg of roughage (RO) per day, the probability of eco- nomic profit decreases by 0.921 times. Concentrates and roughage are significantly related to beef cattle rearing (Ekowati et al., 2018) as they play a major role for cattle growth and development. It is evident that the majority of production cost is cattle feed which is 70-80% of the total cost. Considering the growth perfor- mance and cost per kg gain of Brahman cross- bred growing calves, it concluded that the diet consisting of roughage and concentrates ratio are 55:45 may be used for economic beef production (Rashid et al., 2015). According to the results of the study, an increase of concentrates is likely for Table 3. The results of binary logistic regression analysis for variables that affect economic profitability of Phon Yang Kham beef cattle farming. Variables B Std.error Wald df Sig. Exp (B) 95% C.I.for EXP(B) Lower Upper Constant - 0.540 0.862 0.392 1 0.531 0.583 OC 0.461 0.536 0.740 1 0.390 1.586 0.554 4.539 FA -0.122 0.255 0.230 1 0.631 0.885 0.537 1.458 TR -0.467 0.264 3.112 1 0.078 0.627 0.373 1.053 CB1 0.882 0.716 1.520 1 0.218 2.417 0.594 9.827 CB2 1.167 0.670 3.035 1 0.081 3.213 0.864 11.944 CB3 1.626 0.715 5.166 1 0.023* 5.083 1.251 20.654 CB4 7.114 3 0.068 CON 0.327 0.099 10.922 1 0.001** 1.387 1.142 1.683 RO -0.082 0.020 16.638 1 0.000** 0.921 0.886 0.958 CER 0.556 0.301 3.418 1 0.064 1.743 0.967 3.143 EX 0.002 0.017 0.013 1 0.910 1.002 0.970 1.035 LO -0.519 0.252 4.252 1 0.039* 0.595 0.363 0.975 RP1 1.740 0.430 16.350 1 0.000** 5.697 2.451 13.241 RP2 0.534 0.285 3.506 1 0.061 1.706 0.975 2.986 RP3 16.350 2 0.000 Chi 2 ( 13) = 77.636; Prob > chi2 = ** ; Pseudo R 2 = 0.246; * Significant at level 5%, ** Significant at level 1% 182 J. Indonesian Trop. Anim. Agric. 47(3):177-183, September 2022 the farmers to earn economic profit; on the other hand, economic profit is likely to decrease if the cattle are fed on more roughage. As a result, the farmers should feed cattle with the maximum amount of concentrates and limit roughage to the appropriate amount. McGee et al. (2016) confirms that Carcass growth response to concentrate sup- plementation at pasture is higher where grass supply is low and where grass quality if poorer and, usually declines as concentrate supplemen- tation level increases. Haloho et al. (2013) also found that when increasing the cost for concen- trates, they gained 4.7% more profit. The cost of concentrates has a significant influence on beef farming profitability (P<0.05). 3. Beef cattle farm location: The variables with the P-Value of 0.039 and odd ratio of 0.595 when B is -0.519 indicate the inverse effects on economic profit at the reliability level of 95.00%. In other words, with the beef cattle farms loca- tion (LO) that are close to residences, the farmers tend to earn less economic profit by 0.595 times compared to those located away from neighbour- ing residences because of better air circulation, better cattle growth rate, low epidemic diseases rate, and convenient access to sources of rough- age. Muroga et al. (2013) claims that the farms with physical limitations of livestock transporta- tion can prevent animal epidemic. On the other hand, the convenient movements of animal, peo- ple, and vehicles can possibly risk the outbreak. Kaneene et al. (2002) also states that in order for the farms to lower the risk of the epidemic, they are required to be naturally open, and the de- crease of entries among different cattle houses. The feeding stations and pasture boundaries may need to be determined by electric fence. Addi- tionally, Persson (2015) has found that good physical location is positively associated with the farm’s advantage in competition because of the decrease of feeding cost. 4. Rearing period: The variables were divid- ed into 3 groups: less than or equal to 12 months, 12 - 15 months, and greater than or equal to 15 months. The third group was assigned to be a reference group, and it was found that the rearing period of less than or equal to 12 months had the P-Value of 0.000 and the odd ratio of 5.697. This means that rearing period affects economic prof- its in a positive way at the reliability level at 99.00%. In other words, the rearing period is less than or equal to 12 months (RP1), the probability of economic profit is by 5.697 times compared to the rearing period of greater than or equal 15 months. The beef cattle are about 3 years old as they started to be fattened at 2 years old in ac- cordance with Kalangia (2016) that has found that selling 1-year old beef cattle gave lower profits than selling older ones (1-2 years old. However, some farmers chose to sell sterile fe- male cattle or heifers with lower price because of their lower weight and strength. 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