Profitability and Factors Affecting Milk Supply: An Empirical Study on Dairy Farms in Chittagong District of Bangladesh

It was an attempt to examine the profitability and factors affecting milk supply of dairy farms in selected areas in Chittagong District. Primary data were collected from both milk producers and traders during the months of August to September 2015. Simple descriptive method and stepwise multiple regression models were used to analyze the data. The return over investment indicates that dairy farming is a profitable business in Chittagong District. Stepwise multiple regression models were specified and estimated to identify the factors affecting of milk supply of dairy farmers. Regression analysis revealed that three variables i.e., number of milking cows, the age of household head and experience of dairy farming, as important factors affecting sale volume of milk. The survey result identified that the supply of milk trading was predominantly traditional, fragmented and only one cooling plant which has limited capacity but no other formal agreement either collectors or farmers. As a result, most of the surplus milk absorbed by the sweetmeat shops.