This paper is an attempt to analyze competitiveness and efficiency in dairy agribusiness in five states of Brazil. These states are the largest producers of dairy products in the county. Primary data were collected in 150 farms operating in association with the most representative industrial firms of the milk chain: Nestlé, Parmalat, Elegê, Cantrolanda, Batavo, Centro-Leste and Coommai. For a simulation purpose, it was used an industrial plant with the full capacity of processing one million liters of milk per day. Then, costs were estimated and analyzed in four segments of the milk chain: i) production at the farm level; ii) transportation up to the dairy mill; iii) industrial processing; and iv) transportation costs up to the distribution center in the city of São Paulo. The costs estimation was done according to the results of different chain sectors. And for the competitiveness and efficiency analysis it was used the Policy Analysis Matrix - PAM. The results lead to the general conclusion that the dairy agribusiness sector is competitive and efficient, in spite of distortions resulting from public policies and from the prevailing market failures.
competitiveness; efficiency; dairy agribusiness system; Policy Analysis Matrix - PAM