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Economic and financial viability of a pig farm in central semi-tropical Mexico: 2022–2026 prospective

Author

Listed:
  • Francisco Ernesto Martínez-Castañeda
  • Nicolás Callejas-Juárez
  • Oscar Cuevas-Reyes
  • Nathaniel Alec Rogers-Montoya
  • Germán Gómez-Tenorio
  • María Elena Trujillo-Ortega
  • Claudia Giovanna Peñuelas-Rivas
  • Elein Hernandez

Abstract

To estimate the economic and financial viability of a pig farm in central sub-tropical Mexico within a 5-year planning horizon, a Monte Carlo simulation model was utilized. Net returns were projected using simulated values for the distribution of input and product processes, establishing 2021 as base scenario. A stochastic modelling approach was employed to determine the economic and financial outlook. The findings reveal a panorama of economic and financial viability. Net income increased by 555%, return on assets rose from 3.36% in 2022 to 11.34% in 2026, and the probability of decapitalization dropped from 58% to 13%, respectively in the aforesaid periods. Similarly, the probability of obtaining negative net income decreased from 40% in 2022 to 18% in 2026. The technological, productive, and economic management of the production unit allowed for a favorable scenario within the planning horizon. There is a growing interest in predicting the economic sectors worth investing in and supporting, considering their economic and development performance. This research offers both methodological and scientific evidence to demonstrate the feasibility of establishing a planning schedule and validating the suitability of the pork sector for public investment and support.

Suggested Citation

  • Francisco Ernesto Martínez-Castañeda & Nicolás Callejas-Juárez & Oscar Cuevas-Reyes & Nathaniel Alec Rogers-Montoya & Germán Gómez-Tenorio & María Elena Trujillo-Ortega & Claudia Giovanna Peñuelas-Riv, 2024. "Economic and financial viability of a pig farm in central semi-tropical Mexico: 2022–2026 prospective," PLOS ONE, Public Library of Science, vol. 19(5), pages 1-11, May.
    • Handle: RePEc:plo:pone00:0298897
    DOI: 10.1371/journal.pone.0298897
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    References listed on IDEAS

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    2. Richardson, James W. & Klose, Steven L. & Gray, Allan W., 2000. "An Applied Procedure For Estimating And Simulating Multivariate Empirical (Mve) Probability Distributions In Farm-Level Risk Assessment And Policy Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(2), pages 1-17, August.
    3. Leen, Frederik & Van den Broeke, Alice & Aluwé, Marijke & Lauwers, Ludwig & Millet, Sam & Van Meensel, Jef, 2018. "Stakeholder-driven modelling the impact of animal profile and market conditions on optimal delivery weight in growing-finishing pig production," Agricultural Systems, Elsevier, vol. 162(C), pages 34-45.
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