Determinants of farmers’ loyalty to dairy processors in Minas Gerais, Brazil

• Published in: Ciência rural 2021, Vol.51 (5)
• Main Authors: Simões, Andre Rozemberg Peixoto, Nicholson, Charles Frederick, Reis, Janderson Damaceno dos, Protil, Roberto Max, Ferraz, André Luiz Julien, Oliveira, Dalton Mendes de
• Format: Article
• Language: English
• Subjects: AGRONOMY; Competition; dairy; Dairy farming; Dairy farms; Econometrics; Farmers; Farms; Logistics; Loyalty; Maximum likelihood method; Microprocessors; Milk; Municipalities; Payments; Processors; Purchasing; Questionnaires; Suppliers; Supply chains; Technology adoption; Variables; vertical coordination
• ISSN: 0103-8478; 1678-4596; 1678-4596
• DOI: 10.1590/0103-8478cr20200340

The current study explores variables associated with the loyalty of dairy farmers to dairy processors in the Brazilian context. A multivariate discrete choice (Logit) model and alternative formulations assess the associations between loyalty metrics and farm and processor characteristics for a sample of 32 dairy farmers in 16 municipalities at the Zona da Mata in Minas Gerais. Twenty-two dairy processors were identified as milk buyers in the area studied, but each farmer indicated that they could sell to an average of five alternative buyers of milk. Farmers’ attributes such as production scale or the technological level are not statistically significantly associated with loyalty in this sample. The current milk price paid to farmers in our sample is not associated with increased loyalty (sales to a single processor for 6 or more years) in all estimated models; although, further research on this impact is merited to inform buyer-pricing policy. Variables associated with increased loyalty include payment of premiums for quality, farmer years of experience and cooperation among farmers in the purchase of inputs. Delayed payment is associated with reduced loyalty. We could not determine the effect of participation in technical assistance programs offered by processors on loyalty, because in our sample all farmers received free university-provided technical assistance. The payment of a premium based on milk volume was also unassociated with loyalty determination. The small size of our sample limits the ability to generalize our results but provides exploratory results that facilitate future investigation. RESUMO: O objetivo deste estudo é explorar as variáveis importantes associadas à fidelidade dos produtores de leite aos laticínios no contexto brasileiro. Um modelo de escolha discreta multivariada (Logit) e formulações alternativas foram usadas para avaliar as associações entre métricas de fidelidade e características de fazendas e processadores em uma amostra de 32 produtores de leite de 16 municípios da Zona da Mata, em Minas Gerais. Vinte e dois laticínios foram identificados como compradores de leite na região estudada, entretanto, cada produtor indicou que tem, em média, a possibilidade de vender o leite para cinco empresas diferentes. Os atributos dos agricultores, como escala de produção ou nível tecnológico, não foram estatisticamente associados significativamente à fidelidade. O preço atual do leite pago aos agricultores nessa amostra não está assoc