Effects of differentiation on risks and returns of coffee production in Minas Gerais / Efeitos da diferenciação sobre riscos e retornos da produção de café em Minas Gerais

AUTOR(ES)
DATA DE PUBLICAÇÃO

2008

RESUMO

Coffee market deregulation and growing demand for quality drink has increased market competition and the pressure on producers. Differentiated coffee production has emerged as an option to ensure product competition in search for better prices and advantages in a market that defines remuneration according to coffee quality. The number of differentiated coffee producers is increasing, although conventional market performance still predominates. Thus, this research aimed to analyze the effects of the differentiation strategy adopted by the Minas Gerais cerrado producers compared to the Southeastern conventional coffee producers. The study was based on the theories of economics and financial administration on risk and on the theories of economics and strategic administration on differentiation, as well as the theories of market administration on brand use. The returns were estimated by an index that relates costs and prices operational margin and risk analysis was conducted based on dispersion measures and Value at Risk estimates. The Sharpe index was used to concomitantly evaluate the returns and risks related to the differentiation strategy. As for the returns, the results indicated that the Minas Gerais cerrado producers obtained better prices and margins than those in the southeast. Besides the price differential, a gap was observed between the costs of producing a bag of coffee in the two regions due to productivity difference, which was favorable to the Minas Gerais cerrado producer. As for the risks taken by the producers in the two regions, it was verified that coffee price variability in the Minas Gerais cerrado is higher. However, margin variability, which considers prices and productive costs, was higher for the southeastern region production. The potential losses were also higher for the coffee production from this region. The favorable results obtained by the Minas Gerais cerrado coffee producers were related to the differences in productive costs and coffee quality. Thus, improved product quality aimed at higher remuneration and productive management aimed at reducing costs per bag were the most relevant aspects found to enhance the performance of the southeastern coffee producer. On the other hand, coffee business management was found to be a decisive factor for the positive results obtained by the Minas Gerais cerrado producer.

ASSUNTO(S)

diferenciação coffee riscos e retornos differentiation economia agraria café risks and returns

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