Egypt has a competitive advantage in milk production rather than red meat production, particularly from buffalo, according to literature evaluations. Furthermore, water resources are becoming increasingly restricted, limiting fodder acreage horizontal expansion. Furthermore, there is strong competition for available agricultural land resources between food and feed needs. As a result, horizontal dairy buffalo stock expansion is difficult. As a result, vertical expansion through improved milk output is the sole option for buffalo development in Egypt to address the existing domestic milk production gap. The Egyptian customer loves buffalo milk because of its vibrant colour and high total solids content, notably fat. Buffalo milk is more expensive than cow milk, yet its production is growing at a quicker rate than cow milk’s. An artificial insemination (AI) network is being used to speed up the anticipated genetic improvement of buffalo milk output. A recent study [1] showed that the return on genetic investment in dairy buffalo might be achieved (IRR = 19.71%). Egypt, on the other hand, has only two AI-centers for selected buffalo sires, supplying four AI-units, according to official figures. As a result, the purpose of this research was to determine the feasibility of constructing an AI network in Egypt by evaluating (NPV, IRR, and payback period) as well as the sensitivity of the proposed programme to negative developments. An AI-unit of buffaloes’ semen and an AI-Center for raising buffalo sires in the Nile Delta were used in the study, as well as data from a field survey. While the Egyptian economy’s average discount rate was 17.5 percent, the predicted IRR for one AI-unit was roughly 35 percent under the most likely scenario, according to the data. IRRs of roughly 28 percent and 31 percent, respectively, would arise from a 10% fall in semen price and a 10% increase in insemination costs. The AI-projected center’s IRR under the most likely circumstances was around 31%. A 10% decrease in the price of sperm and a 10% increase in feed costs or the price of the sire would result in 26 percent, 30 percent, or 28 percent savings, respectively. As a result, the lowest semen dose sale price is the most effective variable on the IRR. Unfavorable adjustments, on the other hand, would keep high-return investments in building a viable AI-Network for significantly expanding dairy buffalo milk yield.

Author (s) Details

Ibrahim Soliman
Department of Agricultural Economics, Faculty of Agriculture, Zagazig University, Zagazig, Egypt.

Ahmed F. Mashhour
Department of Agricultural Economics, Faculty of Agriculture, Zagazig University, Zagazig, Egypt.

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