Volatility of Milk Prices and the Formation of the Surplus on the Self-Financing of Investments in Dairy Farms

The article is devoted to a research on the development of the surplus on the self-financing of investments on farms specialising in milk production. The study used model farms built on the basis of FADN information on average production and economic parameters of average dairy farms. In order to obtain the distribution of the expected value of the surplus on self-financing of investments, the milk price was given stochastic character and simulations using the Monte Carlo method were concluded. The results show that for all farms the average expected value of the surplus in 2016-2020 will be lower than in 2013. The level of surplus on the smallest farms can only allow for investments with a very low value. Economically stronger farms will be able to increase their production capacity by development investments