Partners' F2F Volunteer Collaborates on a Financial Analysis of Nicaraguan Livestock Production

By F2F Volunteer Eric Rama

Nicaragua’s economy is heavily dependent on agricultural exports. Of these exports, beef and dairy generate the most income. Despite this, Nicaraguan beef and dairy productivity levels are significantly lower than their Latin American counterparts. There are many reasons for this, but one worth highlighting is the dual-purpose nature of livestock raising in Nicaragua. Dual-purpose production systems are characterized by selling a portion of the milk a cow produces and leaving the remaining milk for their offspring. This creates a situation in which a cow produces very little milk compared to a normal dairy cow, and underdeveloped & under-performing calves which do not grow and thrive in the same way as calves from specialized systems. It goes back to the saying that you can do two things at the same time, but not well. However, producers in Nicaragua are willing to produce less in exchange for the daily income provided by the marketing of their milk.

Given the economic importance of beef and dairy exports, Nicaraguan producers could significantly benefit from increases in productivity. This is why the Nicaraguan Cattlemen’s Association (CONAGAN), with the support of the USAID-funded Farmer-to-Farmer program, is conducting a financial analysis of Nicaragua’s current dual-purpose system, and utilizing financial models to estimate the impact of specializing in beef or dairy production on the industry. Because of my experience in the modeling of beef production systems, I was asked to assist CONAGAN with this study.
I traveled all over the country with Roberto Blandino, an Animal Scientist who has recently retired from an upper level administrative role in Nicaragua’s College of Agriculture, and interviewed producers about the productivity and profitability of their enterprises. We saw a range of cattle operations in various parts of the country, from the grasslands of El Rama to the green hills of Wiwili. Visiting these producers on-site allowed us to document their current financial reality and estimate the impact of specializing in beef production on their personal economy. This also allowed us to document valuable information about the international competitiveness of Nicaraguan producers in terms of their cost of production. Our findings will provide helpful information to industry stakeholders and aid their efforts to gain entry into new, quality driven markets. This information will also be useful to policy makers who aim to create a policy environment that stimulates Nicaragua’s international competitiveness.

This trip was a great experience for me! I enjoyed seeing and learning more about tropical production systems, and was humbled by the hospitality, drive, and work ethic of my Nicaraguan counterparts. Despite the obstacles that Nicaragua faces, I have no doubt that, if the CONAGAN and Farmer-to-Farmer staff are examples of the nation’s drive for positive change, they will be successful in their efforts to improve the competitiveness and productivity of their livestock sector. I would like to thank all of the CONAGAN and Farmer-to-Farmer staff (in Nicaragua and in Washington) for this opportunity and look forward to assisting with the program in the future!