A Case Study on LJ Rivas Farm

Date

4-2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Normito R. Zapata, Jr.

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Abstract

In the livestock industry, cattle and goat serves as the least developed but it has a lot of potential for growth. There is a high demand for beef and the country could not supply it thus it imports from other country but still it is not enough. On the other hand the country do not import goat’s meat but there is a growing demand in the market not just locally but internationally also.

LJ Rivas owned by Mr. Leo Rivas is into goat and cattle operations. The farm’s been operating for seven years and started out in Bulacan and later on they decided to move into Brgy. Culubasa, Mexico, Pampanga three years ago. The farm started with cattle operations and later on with goat farming. Their markets for their products are other breeders and raisers, butcher/retailers and Mother Earth Company.

Generally, the objective of this study is to analyze the overall performance of the farm. Specifically it attempts to present the company profile, present and discuss a noteworthy business issue(s), evaluate the business environment prevailing at particular time of the case, valuate the four business functions, define the problem areas, generate and evaluate alternative solutions to the identified problem in the firm, identify the best solution using appropriate criteria procedures and design an implementation plan for the chosen solution.

Primary data were gathered through personal interview with the owner and financial records of the farm. Questionnaire was used in interview. These data were used to assess the farm’s performance. Supplementary information which will contribute to the study is gathered through published and unpublished materials from BAS, PCARRD and libraries and internet. Descriptive research through interviews and observation of the area was used in this study to assess the current status of the business with its four functional areas. Financial statements were analyzed using financial ratios and through horizontal and vertical analysis. SWOT matrix and Michael Porters were also used.

The main problem for the farm is it has long conversion cycle. Profit for the farm is decreasing due to it since their money is tied up with their inventories at the same time inventory is also decreasing. Decreasing inventory is caused by long period of breeding cycle for the animals in which the farm would still wait for these breeders to produce their needed raw materials that will serve as feeder stocks.

SWOT Matrix helped was used for strategy formulation. The strengths of LJ Rivas Farm are high average current ratio, close supplier relationship and member of FCRAP and Goat Raisers Association. While its weaknesses are lack of proper facilities and equipments, lack of capital, long cash conversion cycle and they only lease the land. The opportunities for the farm that were identified are, financial help from government and non government institutions, increasing demand for beef, availability of technology, goat is promising industry, low level of competition. But the following threats for the farm were also identified increasing cost of inputs and seasonality of feeds, high cost of adoption of technology and climate change.

Three alternative strategies that were formulated were the following: to focus on cattle fattening operations and continue with grazing system for goats (breeding is removed), Use available technology for breeding of cattle while natural means for goats, liquidate their goat inventories and focus on cattle operations. The alternatives were evaluated based on decision matrix. The criteria used were ease of implementation, degree of risk, availability of resources and the most important of all is its value created. The value created was based on the net income, NPV and IRR that were computed with each strategy formulated. Given these criteria, the farm should remove breeding operations and focus on cattle feedlot fattening operations and goat fattening. This strategy would efficiently utilize their resources and help the farm to grow.

The strategy will be carried out based on the estimated dates on the Gantt chart provided in the study. Given the proper implementation of the strategy will be seen on financial ratios and other financial measures. At the same time aside from its finance part, they could also increase their production thus having more inventories for their market.

Language

English

LC Subject

Animal industry, Farm management

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 P365

Notes

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Document Type

Thesis

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