Science of the Total Environment 741 (2020) 140273

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Science of the Total Environment

journal homepage: www.elsevier.com/locate/scitotenv

Life cycle cost analysis of dairy production systems in Southern Brazil

Clandio Favarini Ruviaro a,⁎, Cristiane Maria de Leis b, Thiago José Florindo c,
Giovanna Isabelle Bom de Medeiros Florindo c, Jaqueline Severino da Costa d, Walter Zhongzhong Tang e,
Andrea Troller Pinto f, Sebastião Roberto Soares g
a
Federal University of Grande Dourados, Dourados CEP 79.804-970, Brazil
b
FoRC – Food Research Center, Chemical Engineering Dept., Polytechnic School, University of São Paulo, Main Campus, Brazil
c
Federal University of Mato Grosso do Sul, Campus Chapadão do Sul, Rod. MS 306, km 105, Chapadão do Sul, MS, Brazil
d
Agroindustrial Management Department, Federal University of Lavras, Campus Universitário, Mailbox 3037, CEP 37200-000 Lavras, Minas Gerais, Brazil
e
Florida International University, Department of Civil and Environmental Engineering, Miami, FL 33174, USA
f
Federal University of Rio Grande do Sul, Department of Preventive Veterinary, Av. Bento Gonçalves 9090, CEP 91540-000 Porto Alegre, RS, Brazil
g
Life Cycle Assessment Research Group (CICLOG), Department of Environmental and Sanitary Engineering, Federal University of Santa Catarina, Campus Universitário, Mailbox 476, Florianópolis
CEP 88040-970, Brazil

H I G H L I G H T S G R A P H I C A L A B S T R A C T

• National inventories are growing in

Brazil.
• Economic and environmental analysis
accrue sustainable results.
• Higher food efficiency system and
greater profitability result smaller
emissions.

a r t i c l e i n f o a b s t r a c t

Article history: The intensification of milk production in Brazil in the past decade has imposed great stress on the environment.
Received 15 April 2020 Therefore, it is very important to find a balance between economic, social, and environmental objectives. The
Received in revised form 10 June 2020 paper assesses the economic costs by production systems: confined feedlot, semi-confined feedlot, and pasture
Accepted 14 June 2020
in the south of the country. The economic assessment was realized on some investment analysis tools and the
Available online 17 June 2020
GHG emissions costs for the different production systems indicated. Our results show that hectare and the
Editor: Jay Gan total area of rural properties were lower in the confined feedlot system, followed by the semi-confined feedlot
system and pasture-based grazing system. However, the reduction of the need for feed inputs in the pasture sys-
Keywords: tem resulted in lower feeding costs when compared to the other systems. The hectare analysis suggested that the
Milk superior productivity of the semi-confined system conditioned higher emission costs in relation to the other sys-
Intensification of production tems. However, considered the total emissions of the systems, the pasture system obtained higher values, justi-
Economic fied by the greater need for an area for production. The results showed that the higher the food efficiency of a
Life cycle cost system, the greater the profitability.
© 2020 Elsevier B.V. All rights reserved.

⁎ Corresponding author.
E-mail addresses: clandioruviaro@ufgd.edu.br (C.F. Ruviaro), Thiago.florindo@ufms.edu.br (T.J. Florindo), Jaqueline.s.costa@ufla.br (J.S. da Costa), tangz@fiu.edu (W.Z. Tang),
Andrea.troller@ufrgs.br (A.T. Pinto), soares@ens.ufsc.br (S.R. Soares).

https://doi.org/10.1016/j.scitotenv.2020.140273
0048-9697/© 2020 Elsevier B.V. All rights reserved.
2 C.F. Ruviaro et al. / Science of the Total Environment 741 (2020) 140273
1. Introduction
The growing demand for food derived from beef and veal, such as
meat and milk products has significantly increased stress on the envi-
ronment. Milk production is an important economic and social activity
in Brazil, since it generates regular income for small producers, contrib-
uting to maintenance in the field and reduction of the rural exodus
(Jung and Matte Junior, 2017; Santos et al., 2007). Accordingly
Primavesi et al. (2015), the most frequent way used for milk production
in Brazil, is done through pastures (extensive). Only 2.4% of the total
produced in the country is made via the confined (intensive) system.
Berre et al. (2014) reported that milk production in the world has
expanded to accompany population growth over the past 50 years. En-
vironmental externalities generated in this production increase are
worrisome. In 2013, Brazil produced approximately 24 billion l of
milk, increasing its production by 31% compared to 2000s (IBGE,
2018a). However, demand for milk consumption is expected to rise ap-
proximately 58% by 2050 (Rojas-Downing et al., 2017; Gaitán et al.,
2016). Thus it's necessary to increase milk production through produc-
tivity with new areas for production (Wang et al., 2016; Gerber et al.,
2011; Steinfeld et al., 2006) and/or investing in technologies.
Mitigating animals' environmental impact is crucial to sustainability
(Florindo et al., 2018; Ruviaro et al., 2014). The agricultural phase of
milk production is perceived as the critical point since the composition
of the animal feed can vary from region to region and even within the
same country (de Léis et al., 2015; Flysjö et al., 2011a, b; Henriksson
et al., 2011). However, the efficiency in agricultural management can
positively influence the reduction of the Carbon Footprint (CF) through
the genetic improvement of the animals, reduction of the concentrated
feed, increase of the stocking rate per hectare and the reduction of nitro-
gen fertilizers per hectare (Hessle et al., 2017; O'Brien et al., 2014).
To be accepted by the producers, economic aspects must also be
evaluated, since the producers are prepared to implement strategies
when the economic results are positive (Hessle et al., 2017; Hristov
et al., 2013; Ruviaro et al., 2016; Vellinga et al., 2011). The main motiva-
tion of rural producers for adopting a new production system is often
linked to their profitability, systems with use of pasture with low pro-
duction costs attract more producers in Germany (Kiefer et al., 2014).
A clear and measurable analysis of the economic and environmental im-
pact assessment of milk production is essential between both criteria
(Dolman et al., 2014; Casey and Holden, 2005; Cederberg and Flysjö,
2005). O'Brien et al. (2014) point out that the reasons why some pro-
ducers do not take actions that allow the mitigation of emissions and in-
crease the profitability of the system are diverse, among them are risk
aversion and difficulty adopting technological innovation or managing
the business efficiently to maximize profit.
Life cycle costing (LCC) was jointly applied to compare production
costs and environmental impacts throughout the production chain, fa-
cilitating decision-making (Swarr et al., 2011; Wang et al., 2018). Two
evaluations define objective and scope, sharing the same functional
unit (FU), with the LCC accounting for all costs incurred and for LCA
all GHG emissions within the evaluated system. Generally, the joint ap-
plication of LCA and LCC usually compare alternative scenarios,
assessing the differences in impacts and costs between these alterna-
tives (Asselin-Balençon and Jolliet, 2014; Florindo et al., 2017). In the
LCC, it is necessary to apply a discount rate to future costs and revenues,
Table 1
Milk systems production.
Fonte: De Léis et al. (2015).
Milk production system Localization
Confined feedlot Mandaguari – PR
Semi-confined feedlot Porto Amazonas – PR
Pasture Campos Novos - SC
a
Including heifers, dry cows, and lactating cows.
aimed at a standardization of data, the choice of the percentage applied
to the discount rate can directly affect the results, and a sensitivity anal-
ysis is necessary to predict possible variations (Swarr et al., 2011). LCC is
directly linked to the absolute costs of the system, not allowing the anal-
ysis of its financial profitability, which is why several indexes have been
applied to measure investments. The most commonly used approach in
industries and services to measure the economic performance of an in-
vestment is the internal rate of return (IRR) (Asselin-Balençon and
Jolliet, 2014). The IRR consists of the value of the discount rate that
makes the Net Present Value (NPV) equal to zero (Florindo et al.,
2017). The NPV is the sum of the present value of future expenses and
revenues, using a discount rate on payments and revenues during the
analyzed period. One advantage of IRR over NPV is that it does not de-
pend on a discount rate. On the other hand, large expenditures that gen-
erate negative cash flow may subsequently generate distortions in the
analysis. Another peculiarity of the IRR is the assumption that net reve-
nues are reinvested at the same rate, and in analyzes of projects with
high IRR, there may be an overestimation of profitability. Another
method used is the Net Profitability Index (ILL), a variant of NPV, deter-
mined by dividing the present value of net cash benefits by the present
value of the capital outlay (Gitman, 2010). The method indicates, in
terms of present value, how much the project offers of return for each
monetary unit invested (Florindo et al., 2017).
The objective of the research was to compare the profitability per ki-
logram (kg) of energy-corrected milk delivered to the farm gateway for
different milk production systems in Southern Brazil: the confined feed-
lot system, the semi-confined feedlot system, and the system with use
of pasture.
2. Method
The LCA-specific information used in this study is based on the re-
sults of the research carried out in three milk production systems in
the Southern Brazil (Table 1), by De Léis et al. (2015). The economic
evaluation was performed using the life cycle costing approach, using
the same functional unit (FU) and system boundaries and then calculat-
ing investment indicators such as net present value (NPV), internal rate
of return (IRR), and annualized profitability index (API).
The functional unit (FU) used in studies by De Léis et al. (2015) was
1 kg of Energy Corrected Milk (ECM) at the gate of the farm for correc-
tion of fat and protein content. This standardization allows for the com-
parison of the cost of production with CO2-eq. emissions. To compare
the financial profitability of the systems, the production, costs of GHG
emission, and revenue of each system were calculated. All data were an-
nualized, using the year 2017 as the reference. The production of the
systems was calculated by multiplying the average production of kg of
milk/animal as a function of the average number of animals in produc-
tion in their respective systems. The monthly production of the confined
feedlot system was standardized by the annual average divided by the
number of months since this system does not change production during
the winter period. In the semi-confined feedlot system, it was consid-
ered a production of 10% higher than its monthly average between the
months of November to April and 10% lower than its average between
the months of May to October. Likewise, in the system with use of pas-
ture, it was considered a production 15% higher than its monthly aver-
age between the months of November to April and 15% lower than its
Area used for milk production (hectare) Breed Total herda
17 Holstein 55
30 Holstein 137
219 Holstein and Jersey 268
 C.F. Ruviaro et al. / Science of the Total Environment 741 (2020) 140273 3

average between the months of May to October. This procedure was taken to the present value, so the net present value would be equal to
used due to the reduction in the production of these systems during zero (Gitman, 2010).
the winter period.
The cost of production was elaborated considering the values re- X
n
CF
IRR ¼ −I ð3Þ
ferring to feeding, electric energy, land use and later, the inclusion of t
t¼1 ð1 þ IRRÞ
GHG emission costs, the cost of feeding, and the data of the diets of
each system were used according to De Léis et al. (2015), determin-
where: IRR = internal rate of return. CFVj = production costs future
ing the inputs and their quantities. The prices for food inputs were
value, represented by the costs. n: Duration of the project.
attributed according to those practiced in the regions of each system,
converted into US dollars, considering the price of R$ 3.73 per US$ on
3. Results
May 28, 2018. For electricity costs, the average monthly expenditure
in kWh was multiplied by the value of conventional rural B2 kwh,
The systems were evaluated, comparing milk production (kg), the
which obtained US$ 0.10 for the year 2017. Land use values were car-
functional unit (ECM), hectare and area of the property, the variation
ried out considering a cost of annual opportunity of 6% on the value
of production between systems can be explained by differences in feed-
of the hectare in the region of each property, being: US$ 386.06 in
ing, animal breed, genetic factors, climate, management, and other tech-
the confined system, US$ 482.57 in the semi-confined system and
nological issues. Conversion of milk (kg) to ECM showed little variation
U$$ 321.72 in the system with use of pasture. The cost of GHG emis-
in the system with use of pasture, due to higher percentages of fat and
sion was calculated from the CO2-eq. emissions of each system, mul-
protein (ECM calculation coefficients) in milk, resulting in a better con-
tiplied by the carbon credit value, the carbon credit quotation of US$
version rate than the other evaluated systems (Figs. 1 and 2).
10 per ton of CO2-eq. The revenues were determined by multiplying
the monthly milk production (kg) of each system by the reference
3.1. Production per hectare
price and adding the goodwill according to the percentage of protein
and fat. The monthly reference prices for milk are from the Center for
Regarding the annual production per hectare, there was significant
Advanced Economic Studies and Research – CEPEA in 2017 (CEPEA,
variation among the systems, mainly in the system with use of pasture,
2018). The premium refers to a bonus per kg of milk marketed if
reflecting the reduction of the nutritional quality of the feed, animal
the percentage of fat is higher than 3% and protein Higher than
2.9%. The values are US$ 0.005 for the confined feedlot system, US$
0.001 for the semi-confined feedlot systems and US$ 0.011 for the
25
system with use of pasture. The NPV calculation was made consider-
ing a discount rate of 6% per year on future revenues and expenses.
The results are expressed in kg of milk produced, FU, hectares, and 20
yet for the property area.
 X VFBt   X CFV t 
15
kg

NPV t 0 ¼ BV t 0 þ n
n − CV t 0 þ
n
ð1Þ
ð1 þ iÞ ð1 þ iÞn
10
where: NPVt0 = net present value at the initial time. BVt0 = benefits
value at the beginning of each scenario. In this case, there will be no 5
benefit, and the present value of production will be monthly of accord-
ing marketed. VFBtn - future value, which would be represented by the -
obtained revenue value from the milk sale monthly. n = production Confined Semi confined Pasture
system periods, between the present value and marketed. CVt0 = pro-
duction costs value at the beginning of each scenario. CFVtn = produc- Milk annual production ECM annual production
tion costs future value. i = discount rate representing opportunity
costs. In this study, the savings rate of 0.50% per month was used. Fig. 1. Hectare production.
Regarding the annualized profitability index (API), this consists in
separating the NPV value per project investment unit, throughout its
lifespan, that is, it is a second-order derivative of the net present 1,000
value, and aims to simultaneously solve the two NPV limitations: pro- 900
jects with different investments and terms (Florindo et al., 2017; 800
Ruviaro et al., 2016). For the calculation of the API, a capital opportunity 700
rate of 6% per year was considered.
600
2 3 500
Pn Rt −Dt
6 t¼1 7 n  400
6 ð1 þ iÞt 7
API ¼ 6 7: ið1þÞ ð2Þ
6 7 300
Dt 5 ið1þÞ −1
n
4Pn
 t¼1 t  200
 ð1 þ iÞ
100
-
where: API = annualized profitability index; n = number of periods,
represented by each production scenario duration days (lifespan).
Confined Semi confined Pasture
Rt = cash inflows (revenues) expected during the t period; Dt = cash
outflows (revenues) expected during the t period; i = interest rate or Milk annual production ECM annual production
discount rate.
The Internal Rate of Return (IRR) is a hypothetical discount rate that, Fig. 2. Total area production.
when applied to cash flow, causes costs and investments values to be Source: Prepared by the authors of De Léis et al. (2015).
4 C.F. Ruviaro et al. / Science of the Total Environment 741 (2020) 140273

breed, management, among other factors, causing variation of the ani- multiplied by the total emission per functional unit of each system.
mal support capacity by hectare. Comparing the annual production in Table 3 presents the emission costs of the detailed systems by FU,
kilos of milk per hectare, the semi-confined feedlot system surpassed hectare, and the total of the properties.
approximately 35% of the production of the confined system and 517%
of the production in the system with use of pasture. Analyzing the an-
3.3. Emission costs
nual production in kg of ECM, the semi-confined feedlot system ob-
tained a higher production per hectare, exceeding in approximately
The semi-confined system is the highest emission costs per FU, 5%
27% the confined feedlot system and 451% the system with use of
than the system with use of pasture and 31% higher than the con-
pasture.
fined feedlot systems. De Léis et al. (2015) found the largest emission
The pasture production system resulted in the highest total milk
of the semi-confined feedlot system with the use of barley bagasse,
production compared to the other investigated systems, with approxi-
36% of the total. Regarding analysis per hectare, the superior produc-
mately 927 tons of milk per year due to the larger area and the number
tivity of the semi-confined feedlot system conditioned higher emis-
of animals. In the semi-confined feedlot system, the area corresponds to
sion costs in relation to the other systems. However, considered
13.7% of the system with use of pasture and the milk production was ap-
the total emissions of the systems, the pasture system obtained
proximately 71%, reflecting the higher production per hectare. For the
higher values, justified by the greater need for an area for produc-
system with use of pasture, there was less need to purchase inputs for
tion. For a better evaluation, given the particularities of productive
production when compared to other systems. The longer grazing period
systems and properties, data on gross revenue, costs and net revenue
and lower body weight of the animals (jersey cows) reduced daily in-
are presented individually by FU, kilograms of milk, hectares, and
take of corn silage and commercial feed. The confined and semi-
total area (Table 4). This made possible a comparison of the produc-
confined feedlot systems diets are structured based on the availability
tive systems analyzed, considering the difference in the number of
of products in the region, among which we can note the use of industrial
animals and area, the cost of the emissions was included in the pro-
waste from the brewing industry (barley bagasse) and orange juice (cit-
duction costs.
rus pulp) and using soybean meal. Furthermore, corn germ is used in
the semi-confined system because it is in a grain-producing region in
the state of Paraná. Table 2 presents the annual production costs related 3.4. Profitability indicators
to food, land use and energy consumption for the three systems
evaluated. The FU income values are divergent due to two peculiarities: in the
existence of differences in the amount paid to the milk producers of
3.2. Feeding costs each region and the goodwill paid to the rural producer for the product
with better percentage results of fat and protein. According to CEPEA
Reducing the need for feed inputs in the pasture system resulted in (2018), the average receipt by rural producers per kilogram of milk
lower feed costs. Feeding costs reflected approximately 60% of the
total system with use of pasture, while in the confined and
semi-confined feedlot systems showed 87%. In the semi-confined Table 3
and confined feedlot system, the main feed costs are commercial feed Valuation of the emissions in the evaluated milk production systems (US$).
Source: Prepared by the authors.
and corn silage. However, the system with use of pasture had higher
land use and commercial feed costs, represented by 40% and 23% of Dairy production GHG Emissions costs (US$)
total costs, respectively. Extensive production of the system with use systems emissions

pasture requires larger pasture areas, generating a higher cost of land kg CO2-eq x kg CO2 FU Ha Total
use when obtained to the other evaluated systems. The electricity ECM−1 (ECM−1)
costs were higher in the confined and semi-confined feedlot systems Confined feedlot 0.535 0.0100 0.0054 79.3300 1348.6100
due to the greater use of machinery. Semi-confined
The emission costs were obtained from the current carbon credit feedlot 0.778 0.0100 0.0078 146.4532 4393.5963
Pasture 0.738 0.0100 0.0074 30.7595 6736.3235
quotation, being US$ 10 per ton, that is, US$ 0.01 per kg of CO2-eq,

Table 2
Costs the annual milk production systems. Table 4
Source: Prepared by the authors. Financial result.
Source: Prepared by the authors.
Costs Milk production systems
Description Dairy production systems
Confined feedlot Semi-confined feedlot Pasture
Confined feedlot Semi-confined feedlot Pasture
(US$) (US$) (US$)
(US$) (US$) (US$)
Feeding
Corn silage 22,697.69 35,128.58 43,948.05 Income
Commercial ration 24,180.69 38,913.78 41,074.90 FU (ECM−1) 0.38 0.40 0.34
Mineral salt 1412.17 5614.03 60.28 Milk (kg) 0.35 0.34 0.34
Cottonseed 14.58 – – Hectare 5597.13 7473.54 1432.19
Common salt 18.53 – – Total (area) 95,151.15 224,206.20 313,649.94
Corn germ 2036.55 – – Production costs
Soybean meal 1900.02 – – FU (ECM−1) 0.25 0.23 0.20
Pasture – 3190.83 9507.01 Milk (kg) 0.22 0.19 0.20
Citrus pulp – 7267.85 – Hectare 3636.46 4270.23 843.35
Energy supplement – 3095.95 – Total 61,819.79 128,107.03 184,693.71
Bagasse of barley – 10,715.51 – Net revenue
Hay – 3274.02 12,639.40 FU (ECM−1) 0.13 0.17 0.14
Electricity 1647.94 2035.67 271.98 Milk (kg) 0.12 0.15 0.14
Land use 6563.00 14,477.21 70,455.76 Hectare 1960.67 3203.31 588.84
Total 60,471.18 123,713.43 177,957.39 Total (area) 33,331.37 96,099.17 128,956.23
 C.F. Ruviaro et al. / Science of the Total Environment 741 (2020) 140273 5

marketed in 2017 was US$ 0.34 in the State of Paraná and US$ 0.33 in CO2 eq
the State of Santa Catarina. However, the highest percentage of fat and
milk protein produced in the system with use of pasture provided a pre-
mium of approximately US$ 0.010 per kilogram of milk sold, compared
to US$ 0.001 in the semi-confined feedlot system and US$ 0.006 in the
confined feedlot system.
Emissions
The confined feedlot system presented the best price per kilo- NPV
cost
gram of milk marketed, yet the semi-confined feedlot system pre-
sented a higher revenue when analyzed per hectare. Another issue
that can be observed, the greater area of the system with use of pas-
ture property allowed a greater number of animals, resulting in
higher production and total income. Comparing the production
costs per kilogram of milk, there was a difference of 15% in the
semi-confined feedlot system with a lower cost for the confined
feedlot system with a higher cost. However, when performing the
analysis by FU, the pasture system showed the lowest production Production
Profitability
costs, which can be justified by the better conversion rate of the pro- costs
duction of kg of milk to FU (ECM). The semi-confined feedlot system Feedlot Semi-confined Pasture
obtained the best results on the net income, particularly concerning
the variation per hectare, superior by approximately 64% for the con- Fig. 3. Functional unit analyzes (ECM).
fined feedlot system and 506% for the system with use of pasture. The
differences identified in relation to the system with use of pasture
occurred as a function of the productivity variation per hectare be-
tween the systems. But when the production of the properties was CO2 eq
analyzed, the greater production of the system with use of pasture
resulted in higher net revenue. Thus, it stands out that the composi-
tion of the production costs can interfere with their profitability,
making the comparison via different forms of analysis necessary.
Data on the analyzes of net present value (NPV), internal rate of re- Emissions
NPV
turn (IRR) and annualized profitability indicator (API) are described cost
in Table 5.

3.5. Profitability by FU

The calculation of the NPV of the systems allows for comparison by

different units (Table 5). The semi-confined feedlot systems obtained
Production
the best results in this indicator, surpassing circa of 23% the other sys- Profitability
costs
tems when analyzing the profitability by FU. In relation to results on
Feedlot Semi-confined Pasture
the API, the semi-confined feedlot system obtained the best result, dif-
ferentiating about 9% of the system using pasture and 37% of the con-
Fig. 4. Hectare analysis.
fined feedlot system. Some observe that given the differences in
animal load and productivity per hectare of the evaluated systems, the
comparisons were made by FU (ECM) and per hectare. According to 3.6. Costs per emissions
Fig. 3, the confined feedlot system obtained the lowest CO2-eq emis-
sions per FU, with emissions 27% lower than the system with use of pas- The higher emissions of the semi-confined feedlot system may be
ture and 31% lower than the semi-confined feedlot system. However, in related, according to Doole and Kingwell (2015), by the environmen-
the analysis of the emissions per hectare, the lower stocking rate of the tal inefficiency of production systems with high stocking rates and
system with use of pasture resulted in lower emissions, which were 61% productivity per hectare, necessitating a greater quantity of inputs
lower than the confined feedlot and 79% to the semi-confined feedlot for food which generates larger emission rates from enteric fermen-
system (Fig. 4). tation and leaching. To identify possible trade-offs between eco-
nomic and environmental aspects in the feeding phase of the semi-
confined system, we compared the CO2-eq emissions per kilogram
Table 5
Profitability indicators (US$). of ECM of the feed materials and the cost per kilogram of ECM
Source: Prepared by the authors. (Fig. 5).
Regarding CO2-eq emissions per kilogram ECM, some observed
Profitability indicators Dairy production systems
that barley bagasse accounted for circa of 73% of the total emissions
Confined Semi-confined Pasture from the feeding phase. However, the cost of this input is unimpres-
feedlot feedlot
sive in total feed costs per kilogram of ECM, accounting for circa 10%
Net present value (NPV) of costs. Barley bagasse of a source of protein in the diet of the ani-
UF (ECM) 0.13 0.16 0.13
mals, being a residue of the brewing industry, which due to its low
Milk (kg) 0.12 0.14 0.13
Hectare 1877.11 3024.47 546,27 percentage of dry matter (26.4%) has a large volume of inclusion in
Total (area) 31,910.80 90,734.19 119,632.44 the animals' diet to obtain the required protein content. However,
Internal rate of return (IRR) 35.28% 64.87% 65.51% using this residue in the feed in the semi-confined feedlot system is
Annualized profitability index 4.51% 6.19% 5.66% conditioned by the proximity to a brewing industry, which allows a
(API)
lower cost than other sources of protein, such as a soybean meal.
6 C.F. Ruviaro et al. / Science of the Total Environment 741 (2020) 140273

% Feed emissions % Feed costs

0% Corn silage
3%
4%
Ration
3% 10%
18% Mineral salt
0% 33%
3% 7%
3% Pasture
1% Citrus pulp
1% 5%
Hay
73%
Barley
36% bagasse
Energy
supplement
Fig. 5. CO2-eq emissions per kg of ECM of feed inputs and cost per kg of ECM.
Source: Prepared by the authors of De Léis et al. (2015).

Thus, we simulated a scenario by replacing the inclusion of barley ba- stocking rate per hectare, may not be conditioned by the higher feed
gasse with soybean meal (Table 6). conversion efficiency. According to O'Brien et al. (2014), the increase
The average consumption per animal in this system was 2664.6 kg of in the stocking rate of the animals per hectare had no effect on the
barley bagasse per year, with 703.5 kg of dry matter (26.4%) and includ- feed conversion efficiency, with a weak association between the carbon
ing 244.02 kg of crude protein in animal feed (34.7%). This inclusion footprint and the stocking rate. However, intensification by a strategic
accounted for approximately 35% of total CO2 eq emissions, affecting ap- supplementation that allows for better utilization of the pastures allows
proximately 10% of total costs. When comparing the scenario that re- the filling of deficits in the feeding of the animals in some critical periods
places the barley bagasse with soybean meal, the highest percentage of the year, allowing for higher stocking rates and better system profit-
of dry matter (88.5%) and crude protein (48.5%) had a lower amount ability (Doole and Kingwell, 2015). Thus, the superior results of the
of crude product (566.4 kg) to include the same amount of crude pro- semi-confined feedlot system including soybean meal can be explained
tein in the animals' diet. Regarding emissions, this substitution affected by the higher stocking rate per hectare. Also, it makes for the better in-
circa of 0.6% of the emissions of the system, resulting in a reduction of teraction between pasture and supplement use, reducing the produc-
total emissions of approximately 34%, along with an increase in the tion costs and greater profitability.
cost of production per kg. The optimization of the semi-confined feedlot
system with the substitution of barley bagasse for soybean meal would 4. Discussion
have little impact on the profitability of the system, allowing for a higher
profitability than the other systems and with lower CO2 eq emissions in The objective of the research was to compare the economic and en-
all evaluated systems. vironmental performance of different milk production systems,
However, this inclusion could still result in higher productivity of assessing GHG emissions and including them as the cost of the produc-
milk per animal, being a source of protein with better digestibility and tion process. The need to reduce emissions during the livestock produc-
reduction in emissions from the enteric fermentation of animals. The tion phase has been the focus of proposals for mechanisms that penalize
optimization of using supplements can make possible positive situa- inefficient systems. However, there are questions about its forms of im-
tions between economic and environmental aspects. However, it is plementation and especially about future consequences (Sanders and
fraught with difficulties for implementation due to the lack of incentives Webber, 2014). Possible emission taxation should be calculated having
for application, planning of the agricultural phase and the need to as a criterion the emission level of each agricultural product, penalizing
change producer behavior (Doole and Kingwell, 2015). But it is impor- products with higher emissions which would influence a change in the
tant to highlight that the intensification of the system, with a higher average diet of the population, reflecting the greater mitigation of agri-
cultural GHG emissions (Wirsenius et al., 2011; Caillavet et al., 2019).
Identifying production systems that allow increased profitability for
Table 6
rural producers while reducing emissions can generate an intrinsic mo-
Scenario with soybean meal in the semi-confined feedlot system. tivation for the use of systems (Florindo et al., 2017). This economic and
Source: Prepared by the authors. environmental relationship of production can facilitate the use of the
practices that allow the mitigation of emissions by farmers because gen-
Description Barley bagasse Soybean meal
erally the profitability is seen as the main point for a decision-making
Annual consumption per animal (kg) 2664.59 566.38
process (Hessle et al., 2017; Hristov et al., 2013; Ruviaro et al., 2016;
Dry matter (%) 26.40 88.49
Crude protein (%) 34.69 48.69 Van Middelaar et al., 2014). Consequently, an environmental improve-
Cost of inclusion X ECM milk (US$) 0.016 0.023 ment in milk production would enable a reduction in total GHG emis-
CO2-eq x ECM milk (kg) of each product 0.270 0.003 sions in Brazil. Considering a population of approximately 207.7
Total emissions (kg CO2-eq x UF) 0.778 0.511 million people (IBGE, 2017), with an annual consumption of approxi-
Total cost per kg ECM (US$) 0.198 0.202
mately 170 l per person in 2017 (IBGE, 2018b).
 C.F. Ruviaro et al. / Science of the Total Environment 741 (2020) 140273
This study included the cost of land use during production, which is
necessary because most of the immobilized capital of the rural producer
is on land for production and there are variations of production per
hectare according to the evaluated systems. Thus, an analysis of profit-
ability without considering the cost of land could generate changes in
the results, since this factor is related to productivity. Different values
for the calculated costs were identified according to the systems were
identified, with the pasture system presenting the lowest costs per FU
and per hectare. Pasture production systems are characterized by low
production costs due to lower input requirements (O'Brien et al.,
2014). The lower intensity of pasture system results in lower productiv-
ity when observed other productive systems, either per animal or hect-
are, directly affecting the profitability of the system. The semi-confined
feedlot system, with a higher stocking rate per hectare, obtained supe-
rior results regarding financial profitability.
As in this investigation, others pointed out trade-offs between the
combination of measures to reduce emissions that cause the green-
house effect in milk production and increase profitability, in which
models are not reported that allow for improvements in profit along
with reductions in GHG emissions. Doole and Kingwell (2015), in a
study in New Zealand, concluded that improving the environmental ef-
ficiency of milk production requires the use of pasture as a source of
feed. An action that can contribute to the profitability of the system, it
requires the use of higher rates of concentrate, which allows for higher
stocking rates. The superior financial results of the semi-confined feed-
lot system can be explained by the greater efficiency of the system over
the other evaluated ones, with higher productivity per hectare and
higher feed efficiency of the animals. For Beukes et al. (2010), the ge-
netic improvement coupled with adequate pasture management in-
creased food efficiency, with a GHG emissions reduction of 6 to 28%.
Increasing the yield of milk per animal and reducing the annual rate of
herd replacement were determinants for the lower CH4 emission re-
lated to enteric fermentation in the European systems evaluated
(O'Brien et al. 2014; Rotz et al., 2010). We note that the increase in effi-
ciency makes possible a greater production for the same dry matter
(DM) consumption, decreasing the emissions of CH4 per FU produced
(de Léis et al., 2015; Henriksson et al., 2011; Kristensen et al., 2011).
On the intensification of production, it results in an increase in produc-
tivity per hectare, which reduces the potential need for an invasion of
new natural areas in Brazil for agricultural production (Latawiec et al.,
2014). However, intensification by more concentrated diets from grains
and cereals may lead to future conflicts with society due to competition
with the production of food for human consumption (Wall et al., 2010).
Latawiec et al. (2014) consider that the higher animal load per hectare
can increase soil density, adversely affecting pasture performance
while also damaging animal welfare. Many studies reported that per-
manent pasture systems are an important long-term carbon sink
(Soussana et al., 2010). Results obtained by O'Brien et al. (2014) suggest
there is potential to mitigate GHG emissions from dairy products pro-
duced in a system using pasture through the adoption of new technolo-
gies and changes in farm management. However, when perennial
pastures are converted into annual crops, this corresponds to losing or-
ganic carbon in the soil and, thus, CO2 emissions (Cederberg et al.,
2013). If carbon fixation were included in this study, lower emission
results could be obtained in the pasture and semi-confined feedlot sys-
tems. Even animal production on pasture occupies a large area com-
prised in Brazil, there is still no clear understanding of the changes in
organic carbon stock in the soil (Bustamante et al., 2012).
5. Conclusion
With the increase in demand for milk and dairy products for the next
few years, it is important to balance the environmental and economic
aspects involved in this production system. Investing in new technolo-
gies for better food efficiency and increased productivity is necessary
if we are to reduce emissions linked to climate change. This investment
7
is necessary to optimize the use of the same areas, avoiding deforesta-
tion. The confined feedlot system presented the lowest CO2-eq emis-
sions per FU. When the emissions per hectare were analyzed, the
system with use of pasture showed the lowest CO2-eq emissions. The fi-
nancial results showed that the semi-confined feedlot system was
higher than the others. But productivity and food efficiency were better
in this system when observed the others. The scenario of substitution of
barley bagasse by soybean meal in the semi-confined feedlot system
presented a low impact on the profitability related to the system,
allowing higher profitability than the other systems and with lower
CO2-eq emissions in all evaluated systems. Studies on the changes in
soil carbon stock are needed throughout the Brazilian territory to obtain
better precision in the different regions of the country. Future studies
are necessary and addressing animal welfare is very important and
relevant.
CRediT authorship contribution statement
Clandio Favarini Ruviaro: Conceptualization, Supervision. Cristiane
Maria de Leis: Investigation, Resources. Thiago José Florindo: Formal
analysis. Giovanna Isabelle Bom de Medeiros Florindo: Data curation.
Jaqueline Severino da Costa: Validation, Methodology. Walter
Zhongzhong Tang: Investigation, Resources. Andrea Troller Pinto:
Validation, Methodology. Sebastião Roberto Soares: Writing - review
& editing.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influ-
ence the work reported in this paper.
Acknowledgments
Cristiane M De Léis thank the Brazilian Science and Technology Na-
tional Council (CNPq) for financially supporting this research in an-
nouncement MCT/CNPq/CT-Agronegócio/MAPA-SDC N° 40/2008 and
scholarship (CNPq-Process 143311/2009-3) and the Coordination of
Improvement of High Education Personnel for a doctoral “sandwich”
scholarship (CAPES/Brazil-Process 2410-11-7).
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