Farm Economics brief
N°2 EU production costs overview
July 2011
Contents
Introduction
The effect of the
economic crisis on
costs and margins
This brief presents key findings on EU production costs for the following
agricultural sectors: cereals, dairy and beef. Cost levels and their breakdown are
compared between EU groups, and among Member States. The brief looks not
only at operating costs, but also at total economic costs including opportunity
costs for family factors. This allows the comparison of total costs for farms with
different structures in terms of land, labour and capital.
Operating costs in
the EU groups
Highly contrasted
costs among the
Member States
Total
economic
costs lower in EU10 but increasing
Cost and margin developments in recent years are analysed and the impacts of
the agricultural price boom and the economic crisis are assessed. Given the
contrasted trends in prices and costs, margins have been squeezed in 2008 for
beef and in 2009 for milk and cereals.
Looking at margins, data show that low costs do not necessarily mean high
margins, and the inverse also holds. In addition, margins do not only depend on
the level of prices, but also on coupled subsidies. In the EU-10 in particular, total
economic costs are in general lower thanks to lower opportunity costs for family
labour and capital.
Differences in production costs illustrate the variety of production systems, of
natural conditions, and of economic contexts in the EU. Some trends may be
explained by changes in exchange rates as not all Member States are in the
Eurozone.
Production costs and margins were estimated based on data from the Farm
Accountancy Data Network (FADN). The FADN is an annual sample survey
collecting structural and accountancy data on farms. This brief gives a glimpse of
the latest sector reports available on this website:
http://ec.europa.eu/agriculture/rica/publications_en.cfm
This publication does not necessarily reflect the official opinion of the European Union. Neither the European Union
institutions and bodies nor any person acting on their behalf may be held responsible for the use which may be made of the
information contained therein.
Contact: DG Agriculture & Rural Development, Microeconomic analyses of EU agricultural holdings
E-mail: [email protected]
Internet: http://ec.europa.eu/agriculture/rica/index.cfm
© European Communities, 2011. Reproduction is authorised, provided the source is acknowledged as "European Commission – EU FADN", save
where otherwise stated. Where prior permission must be obtained for the reproduction, such permission shall cancel the above mentioned general
permission and shall clearly indicate any restrictions on use. When data/information are adapted or modified by the user, this shall be explicitly
stated at a suitably prominent place in the work.
1. The effect of the economic crisis on operating costs and
gross margins
Box 1: Definition – operating costs
The main drivers of the increase depend on the
sector.
Operating costs cover all cash expenditures necessary
to operate, for example feed and veterinary costs,
energy, seeds, fertilisers, pesticides (wages, rent and
interest paid are not included here). Gross margins
correspond to the total receipts from the product
(including possible coupled payments) minus the
operating costs. The costs and margins are expressed
per unit of product.
For milk, the rise was mainly driven by energy and
labour costs. For cereals, it was mostly explained by
fertilisers, machinery, seeds and crop protection.
Milk costs have risen mainly since 2007.The average
annual growth was and 4.6 % for beef breeders and
fatteners (farms combining both breeding and
fattening).
In the EU-10, the rise in operating costs over the
period 2004-2007 was more significant: from 2.5 %
average annual growth for beef breeders and
fatteners to 25 % for cereals (Figure 1).
For the products analysed, EU-15 operating costs
(see Box 1) increased steadily in nominal terms
over the period 2000-2007.
Figure 1: Trend in EU operating costs (nominal terms)
Cereals and milk - €/t
Operating costs - EU-15
Milk
Beef - breeders
Beef - fatteners
Beef - b&f
300
1 400
250
1 200
1 000
200
800
150
600
100
400
50
200
0
0
2000
2001
2002
2003
2004
2005
2006
2007
Operating costs - EU-10
Milk
Beef - b&f
1 400
Cereals and
milk - €/t
1 200
1 000
200
800
150
600
100
400
50
200
0
0
2004
2005
2006
2007
€/t
Cereals
Milk
300
300
250
2009
estimate
Operating costs - EU-2
Beef - breeders
2008
2009
estimate estimate
beef - €/cow or €/male cattle
sold
Cereals
Beef - fatteners
2008
estimate
250
200
150
100
50
0
2007
2008
estimate
2009
estimate
Source: EU FADN — DG AGRI, Models for the allocation of costs.
Farm economics brief
Page 2 / 14
beef - €/cow or €/male cattle sold
Cereals
In the livestock sectors, operating costs rose
abruptly in 2008 (from +12 % to +26 %, depending
on the EU-group and on the product). This was
primarily due to the increase in feed costs (+38 %
between 2007 and 2008 for milk in the EU-15). In
2009, feed costs decreased significantly and so did
operating costs; yet they remained higher than
their 2007 level.
On the other hand, 2008 cereals operating costs
decreased by 10 % in comparison with 2007
(average for the EU-27) thanks to better yields.
But they increased significantly, by 17 %, between
2008 and 2009. The main items contributing to
this increase were fertilisers, machinery costs,
seeds and crop protection.
Figure 2: Trend in beef revenues and costs
breeders
and b&f€/cow
fatteners €/male
cattle sold
Beef
breeders revenues
breeders operating costs
fatteners revenues
fatteners operating costs
b&f revenues
b&f operating costs
1 800
For beef, prices did not change dramatically between
2007 and 2009, so gross margins diminished in 2008
(Figure 2). Given the developments in prices (peak in
2008 and dramatic drop in 2009), milk and cereals
gross margins were squeezed in 2009 (Figure 3).
Figure 4 below illustrates the disruption in the
pattern of output and input price developments in
recent years. A rather steady pattern of real price
declines in output and input prices, with the former
decreasing faster, was observed until 2005.
However, since 2006, the gap between input and
output prices has widened faster, driven mainly by
factors outside agriculture: energy prices, exchange
rates, and financial events.
Figure 3: Milk and cereals revenues and costs
Cereals and m ilk
€/t
Cereals revenues
Cereals operating costs
Milk revenues
Milk operating costs
400
350
1 600
300
1 400
250
200
1 200
150
1 000
100
800
600
2007
50
2008 estimate
2009 estimate
Source: EU FADN — DG AGRI, Models for the allocation of costs.
Revenues include coupled subsidies.
0
2007
2008 estimate
2009 estimate
Source: EU FADN — DG AGRI, Models for the allocation of costs. Revenues
include coupled subsidies.
Figure 4: Development in agricultural output and input prices
Source: Eurostat — price statistics — Elaboration DG AGRI.
Farm economics brief
Page 3 / 14
2. Operating costs in the EU groups
Box 2: Terminology
The following terminology is used with regard to costs. Total economic costs comprise of:
- operating costs:
o
specific costs (seeds, fertilisers, crop protection, or feed, veterinary costs)
o
non-specific operating costs (machinery and buildings, power (fuel and electricity), contract work, taxes and
other dues, taxes on land and buildings, insurance for farm buildings and other direct costs);
- depreciation;
- external factors (wages, rent and interest paid);
- opportunity costs for unpaid family factors (family labour cost and own capital cost).
Operating costs for cereals in 2007 do not differ
much between EU groups (Figure 5): they remain
between -7 % and +10 % around the EU-27
average. The only exception is the EU-10 average
operating costs for grain maize, which are 20 %
higher than the EU average. The grain maize yield
was indeed exceptionally low in 2007 in the EU-10.
We look indeed at the development of costs per
tonne, so in the case of cereals, the fluctuations of
yield play a major role in the development of the
cereals costs per tonne.
For milk, beef fatteners and beef breeders and
fatteners, the contrast between EU groups is more
marked: the EU-10 and EU-2 have significantly
lower operating costs than the EU-27 average (18 % and -27 % respectively for milk). Beef
breeders’ operating costs are similar for all EU
groups.
Farm economics brief
The breakdown of operating costs depends
primarily on the sector considered. In cereals,
fertilisers, crop protection and energy represent
the bulk of the operating costs (around 50 - 60 %
on EU average). For milk, the most important
cost item is feed (around 50 %). Energy
represents between 9 % of the average milk
operating costs in the EU-15 and 14 % in the EU10 and EU-2.
Feed is also a major cost item for beef breeders
and fatteners in the EU-15 (40 %); however, in
the EU-10, it represents only 20 % of the
operating cost given the lower price for feed.
In the EU-10, the beef non-specific costs are
considerably higher because of the substantial
costs of building and machinery upkeep, and
energy costs.
Page 4 / 14
Figure 5: EU groups' operating costs by product - 2007
€/t
Cereals operating costs - 2007
Wheat operating costs - €/t
Grain maize operating costs - €/t
140
120
110
107
Fertilisers and crop protection
Other operating costs
Barley operating costs - €/t
Cereals operating costs - €/t
Fuel and energy
100%
125
119
Cereals €/t - operating costs - 2007
118
118
90%
107
106
80%
100
70%
80
60%
42
40%
40
52
22
50%
60
59
54
15
24
17
30%
20
20%
38
43
EU-15
EU-10
35
10%
0
EU-15
EU-10
€/t
EU-2
0%
EU-27
Milk operating costs - 2007
Feed
EU-27
Fuel and energy
Other operating costs
100%
196
200
EU-2
Milk €/t - operating costs - 2007
250
201
38
90%
80%
162
143
150
51
47
89
85
70%
22
60%
50%
100
20
18
18
40%
30%
50
20%
89
76
EU-10
EU-2
94
93
10%
0
0%
EU-15
EU-10
EU-2
EU-27
EU-15
Beef operating costs - 2007
Beef breeders & fatteners €/cow - operating costs 2007
Beef - breeders operating costs - €/cow
Beef - fatteners operating costs - €/male cattle sold
Beef - b&f operating costs - €/cow
Feed
Fuel and energy
1 400
1 188
1 106
1 105
90%
80%
944 941
1 000
800
Animal purchase
Other operating costs
100%
1 196
1 200
EU-27
401
400
401
70%
726
723
682
60%
50%
600
71
299
73
147
295
40%
400
195
30%
200
20%
0
10%
EU-15
EU-10
EU-2
EU-27
426
419
198
0%
EU-15
EU-10
EU-2
Source: EU FADN — DG AGRI, Models for the allocation of costs.
Farm economics brief
Page 5 / 14
EU-27
3. Highly contrasted operating costs among the Member
States
Box 3: Methodology
The production costs and margins analysed in this brief are estimated based on the Farm Accountancy Data Network
(FADN) database. The FADN is a European system of sample surveys that take place each year and collect structural
and accountancy data relating to farms; their aim is to monitor the income and business activities of agricultural
holdings and to evaluate the impacts of the Common Agricultural Policy (CAP).
Costs available in the database are for the whole farm. Models are used to allocate farm costs to a particular product.
They use different ratios: for example, product output to total output. They are calculated based on samples of
specialised farms (for example, farms for which more than 40 or 50 % of the output comes from the product
considered). For 2007 production cost estimates, the samples of specialised farms studied represent 28 % of the
cereals area, 71 % of dairy cows and 74 % of the suckler cow herd. It should be underlined that the presented EU or
Member States average figures are not weighted by volume or value of EU or Member State production, but by
number of farms represented in the population. In certain cases, there are not enough specialised farms in the EUgroup or in the Member State to allow calculating an estimate. This is why there are some blanks in certain tables or
graphs.
For 2008 and 2009, operating costs and gross margins have been estimated on the basis of agricultural price indices
and input price indices (source DG AGRI and ESTAT). Farm structures were assumed to remain unchanged.
Figure 6 on the following page shows the
difference between the national average
operating costs and the EU-27 average for each
analysed product. This difference ranges from 63 % (Portugal, for beef breeders and fatteners) to
+84 % (Belgium, for beef breeders and fatteners)
of the EU-27 average, reflecting the variety of
production systems in the EU and the cost aspect
of the national competitiveness for the product in
question.
For these products, Member States can be ranked
according to their level of operating costs:
- Spain, Estonia, Lithuania, Poland and Slovenia
have low operating costs in comparison with the
EU-27 average.
- Denmark, Greece, Finland, Sweden, the United
Kingdom, Cyprus, the Czech Republic, Hungary,
Malta and Slovakia have high operating costs in
comparison with the EU-27 average.
Farm economics brief
- France, Luxembourg, the Netherlands and Austria
are close to the EU-27 average operating costs for
the products studied.
- Belgium, Germany, Italy, Ireland, Portugal, Latvia,
Bulgaria and Romania provide a mixed picture based
on the product in question. For example, Belgium has
low operating costs for milk, but very high ones for
beef, especially for breeders and fatteners. Portugal
has very low operating costs for beef, but not for
cereals. Bulgaria has low operating costs for milk, but
not for grain maize.
It should be underlined that since not all Member
States are members of the Eurozone, changes in the
exchange rate may explain some differences
between Member States. The value of labour, land,
and buildings decreases in euro terms when the value
of a non-euro currency falls. On the other hand
tradable inputs (fertilisers, pesticides, energy) get
more expensive.
Page 6 / 14
Figure 6: Member States' operating costs in comparison with the EU-27 average - 2007
-80%
-60%
Wheat
Barley
Grain maize
Cereals
Milk
Beef - breeders
Beef - fatteners
Beef - b&f
-40%
-20%
0%
20%
40%
60%
80%
100%
BE
DK
DE
EL
ES
FR
IE
IT
LU
NL
AT
PT
FI
SE
UK
CY
CZ
EE
HU
LT
LV
MT
PL
SK
SI
BG
RO
Source: EU FADN — DG AGRI, Models for the allocation of costs. Data are not displayed when there are not enough specialised farms in the
Member State.
Farm economics brief
Page 7 / 14
Figures 7 and 8 illustrate the average operating
costs and the gross margin by Member State for
2007 and by analysed product. It should be
underlined that there is no systematic negative
correlation between operating costs and gross
margins, as these depend on the price level and on
the possible coupled subsidies applied in the
Member State.
For cereals, Cyprus and Finland have the highest
operating costs. However, high operating costs are
not driven by the same factors in the two countries.
In Cyprus the high operating costs are mainly driven
by very high fertiliser and crop protection costs. In
Finland they are explained mainly by machinery and
building upkeep and other direct costs (insurance,
taxes, etc.).
Therefore it should be kept in mind that low
operating costs do not necessarily mean high
profitability or vice versa. For example thanks to
high prices and coupled subsidies, Finland has a
good average milk gross margin despite its very
high operating costs (Figure 7). Similarly, thanks
to strong prices, Belgian beef breeders and
fatteners have one of the highest gross margins in
spite of their extraordinarily high operating costs
(Figure 8).
Poland, Estonia, Lithuania and especially Spain have
very low operating costs in most products. The main
drivers of these low costs likewise differ according to
the Member State and to the sector.
For milk, the lowest average operating costs are for
Lithuania, Romania and Poland. Malta and Finland
have the highest costs.
Figure 7: Operating costs and gross margin by Member State — 2007 (cereals and milk)
€/tonne
Cereals - 2007
operating costs - €/t
200
180
gross margin - €/t
the lowest operating costs
172
160
140
the highest operating costs
155
132
138
133
121
112
111
120
120
117
126
94
122
94
81
74
80
124
119
108
103
100
126
124
60
40
20
0
DK
DE
EL
ES
FR
IE
IT
AT
PT
FI
SE
UK
CY
CZ
EE
HU
LT
PL
SK
BG
RO
Milk - 2007
€/t
operating costs - €/t
gross margin - €/t
350
309
300
278
250
200
LV
234
223
187
170 202
161 197
166
201 194
173 189
229
223
219
196
190
166
150
163 157
146
112
139
100
50
0
BE
DK
DE
ES
FR
IE
IT
LU
NL
AT
PT
FI
SE
UK
CZ
EE
HU
LT
LV
MT
PL
SK
SI
BG
RO
S
ource: EU FADN — DG AGRI, Models for the allocation of costs. Gross margins include coupled subsidies (but not decoupled payments, included in
income). Data are not displayed when there are not enough specialised farms in the region.
Farm economics brief
Page 8 / 14
The lowest costs are observed in Portugal, Spain and
the Czech Republic.
When considering costs and margins for the beef
sector, the reader should keep in mind that results
are expressed per cow or male cattle sold. The
final product is not always homogeneous (i.e.
quantity of meat produced per cow), particularly
between Member States, thus comparisons
should be interpreted with caution.
It is also interesting to note that some Member
States have a very different level of operating costs
depending on the system (breeder/breeder and
fattener/fattener).
For example Italy appears to have on average low
operating costs for breeders and for breeders and
fatteners but it has the highest operating costs for
fatteners. However, this does not prevent Italy from
having a good gross margin for all production
systems thanks to good prices. On the other hand,
Spain and Portugal have very low operating costs for
all production systems.
In beef, national average operating costs reflect
natural conditions and/or the existence or nonexistence of quality-oriented systems for cattle
breeding and fattening. The highest total
operating costs were found in Belgium (specific
high quality production), Finland and Sweden
(extreme climatic conditions) (Figure 8).
Figure 8: Operating costs and gross margin by Member State — 2007 (beef)
Beef breeders - 2007
€/cow
operating costs - €/cow
gross margin - €/cow
1 400
1 000
1 232
1 130
1 200
990
890
835
800
650
600
788
785
784
793
644
552
529
492
353
400
200
0
-200
-400
BE
DK
DE
ES
FR
IE
IT
LU
AT
PT
FI
SE
UK
CZ
SI
Beef fatteners - 2007
€/male cattle sold
operating costs - €/male cattle sold
1 200
gross margin - €/male cattle sold
1 307
1 400
1 118
1 107
1 096
1 075
913
1 000
800
800
600
400
200
0
BE
DK
DE
EL
ES
FR
IE
Beef breeders and fatteners - 2007
€/cow
2 500
operating costs - €/cow
gross margin - €/cow
2 185
1 923
2 000
1 721
1 500
1 269
1 147
1 000
1 539
1 346
1 016
935
656
437
500
0
BE
DE
ES
FR
IE
IT
LU
PT
FI
SE
UK
-500
Source: EU FADN — DG AGRI, Models for the allocation of costs. Gross margins include coupled subsidies (but not decoupled payments, included
in income). Data are not displayed when there are not enough specialised farms in the Member State.
Farm economics brief
Page 9 / 14
The structure of operating costs can be very
different from one Member State to the other
(Figure 9). Fertilisers and crop protection
represent almost 45 % of cereals operating costs in
Cyprus, Lithuania, Latvia and Poland, and only
21 % in Austria. Energy accounts for a large share
of cereals operating costs in Portugal, Hungary
and Latvia, and a relatively limited one in Ireland,
France and Denmark.
Feed is a major component of operating costs for
milk and beef production in Italy, Spain, Portugal
and Malta: Southern countries have greater
recourse to purchased feed, which is more
expensive.
In Finland and Austria other operating costs
represent a large share of total operating costs
for all the products presented, mainly because of
the weight of the machinery and building upkeep
cost in these countries.
For milk production feed can represent a widely
varying share of the operating costs, ranging from
36 % in Luxembourg to 80 % in Malta.
Figure 9: Breakdown of operating costs by Member State and product — 2007
Cereals €/t - operating costs - 2007
Cereals - €/t Fertilisers and crop protection
Cereals - €/t Fuel and energy
Cereals - €/t Other operating costs
100%
90%
80%
70%
62
57
55
38
50
62
57
87
73
85
59
78
66
56
27
36
60%
17
50%
19
40%
13
20
35
22
22
14
42
57
65
19
25
18
18
7
11
22
31
42
59
30
20
28
22
27
30%
11
18
57
20%
10%
35
42
46
46
22
33
26
36
40
AT
PT
FI
76
41
46
SE
UK
46
40
CZ
EE
37
43
52
47
36
34
SK
BG
RO
40
0%
DK
DE
EL
ES
FR
IE
IT
CY
HU
LT
LV
PL
Milk €/t - operating costs - 2007
Feed
Fuel and energy
Other operating costs
100%
90%
26
80%
17
70%
19
11
17
25
60%
50%
13
11
11
27
23
14
18
40%
20%
77
90
94
DK
DE
19
85
78
FR
IE
20
74
80
LU
NL
AT
41
34
108
107
98
SE
UK
21
22
247
117
64
27
36
26
124
110
30%
14
13
18
91
128
EE
HU
110
85
93
52
89
LT
LV
109
74
SK
SI
66
10%
0%
BE
ES
IT
PT
FI
CZ
MT
PL
BG
RO
Beef breeders & fatteners €/cow - operating costs - 2007
Feed
Animal purchase
Fuel and energy
Other operating costs
100%
90%
65
155
134
525
80%
526
39
484
376
444
141
703
50%
66
245
76
57
183
82
153
287
40%
435
272
342
892
441
432
313
FR
IE
269
10%
495
163
427
98
474
306
200
30%
20%
55
584
931
70%
60%
112
95
186
390
523
527
473
FI
SE
UK
0%
BE
DE
ES
IT
LU
PT
Source: EU FADN — DG AGRI, Models for the allocation of costs. Data are not displayed when there are not enough specialised farms in the
Member State.
Farm economics brief
Page 10 / 14
4. Total economic costs lower in EU-10 but increasing
In this chapter, we look at total economic costs,
which take into account operating costs and all
other costs (see Box 2). They allow comparing
total costs for farms with different structures in
terms of land, labour and capital and to explain
some differences of competitiveness among
Member States.
For the sectors analysed, EU-15 and EU-2 total
economic costs are in general very close to the
EU-27 average (Figure 11). The exception is with
the EU-2 grain maize total economic costs, which
are 25 % higher than the EU-27 average as a result
of the exceptionally bad yield in 2007.
Expressed in EUR/ha, EU-2 cereals costs are
significantly lower than EU-15 ones.
In contrast, for all products studied, EU-10 total
economic costs are more or less lower (from -9 %
to -20 % in comparison with the EU-27 average).
This is in particular due to lower imputed family
factors (Figure 11). However, it should be noted
that both external and imputed family factors
have been steadily rising since 2004 in the EU-10
(Figure 10), driving the increase in total economic
costs.
Such increases (in wages, family labour costs,
rent, etc.) probably reflect a mix of increasing
living standards and the strengthening of
currencies of those Member States.
In the milk sector, EU-10 external wages
increased faster than the net margin (amount
available to remunerate own factors). This
explains the increase in the total economic costs
of the EU-10 for cereals and milk (Figure 10). In
the EU-15 the trend in total economic costs is
quite flat over the period 2000-2007 or very
slightly increasing depending on the product.
The breakdown of total economic costs shows
that operating costs represent between 40 % and
55 % of total economic costs (Figure 11). On
average, the share of operating costs is a little
higher for livestock sectors. In the EU-10, they
represent the highest share (55 %) for all the
products studied given the lower costs for
external and family factors explained above.
Depreciation is generally lower in the EU-10 and
EU-2 groups due to older buildings or equipment
and/or the longer average life of assets and/or
lower prices of assets.
In the EU-2 external and imputed family factors
represent a large share of the total costs. This is
mainly due to the high labour input in Bulgarian
and Romanian farms. In spite of very low wages
per hour the total labour cost is high.
The shares of external and family factors differ
greatly between cereals and milk. This is because
on average in the EU-2 farms specialised in
cereals rely heavily on paid labour whereas milk
specialised farms rely heavily on family labour.
Figure 10: Trend in EU total economic costs (nominal terms)
EU-15 total econom ic costs
Cereals EU-15
Cereals and milk - €/t
Milk EU-15
EU-10 total econom ic costs
Cereals
Cereals EU-10
and milk €/t
Milk EU-10
Beef - b&f EU-15
400
2 500
350
350
2 000
300
250
1 500
200
1 000
150
beef - €/cow
300
250
200
150
100
100
500
50
50
0
0
2000
2001
2002
2003
2004
2005
2006
2007
0
2004
2005
2006
Source: EU FADN — DG AGRI, Models for the allocation of costs.
Farm economics brief
Page 11 / 14
2007
Figure 11: EU groups’ total economic costs by product — 2007
€/t
Cereals total econom ic costs - 2007
Wheat total economic costs - €/t
Grain maize total economic costs - €/t
300
252
Cereals total economic costs - €/t
193
200
Operating costs
Depreciation
External factors
Imputed family factors
100%
248
244
250
Cereals €/t - total econom ic costs - 2007
Barley total economic costs - €/t
241
242
235
90%
80%
191
69
19
70%
150
39
37
78
60%
28
50%
31
56
29
29
28
31
118
107
EU-2
EU-27
40%
100
30%
50
20%
106
107
10%
0
EU-15
EU-10
€/t
EU-2
EU-27
0%
EU-15
Milk total econom ic costs - 2007
400
373
EU-10
Milk €/t - total econom ic costs - 2007
366
361
350
Operating costs
Depreciation
External factors
Imputed family factors
100%
294
300
90%
84
69
85
80%
250
200
70%
42
26
60%
46
37
170
44
22
26
50%
150
40%
30%
100
162
201
196
20%
50
40
143
10%
0%
0
EU-15
EU-10
EU-2
EU-15
EU-27
Beef total econom ic costs - 2007
Beef - breeders total economic costs - €/cow
Beef - fatteners total economic costs - €/male cattle sold
Beef - b&f total economic costs - €/cow
2 320
2 304
2 500
2 000
1 500
1 458
1 519
1 512
1 258
EU-27
Operating costs
Depreciation
External factors
Imputed family factors
100%
80%
70%
1 314
EU-2
Beef breeders & fatteners €/cow - total econom ic
costs - 2007
90%
1 874
1 460
EU-10
60%
719
150
254
577
110
245
714
149
254
50%
1 000
40%
30%
500
1 196
1 196
1 188
EU-15
EU-10
EU-27
20%
10%
0
EU-15
EU-10
EU-2
EU-27
0%
Source: EU FADN — DG AGRI, Models for the allocation of costs. Data are not displayed when there are not enough specialised farms in the
Member State.
Farm economics brief
Page 12 / 14
The difference between the national average total
economic costs and the EU-27 average is
presented in Figure 12. It can range from -56 %
(Portugal, for beef breeders and fatteners) to
+98 % (Cyprus, for cereals) compared to the EU-27
average. It allows Member States to be classified
according to their level of total economic costs:
- Belgium, Germany, Ireland, Italy, Portugal, the
United Kingdom and Slovakia have a contrasted
situation according to the product studied. For
example, Belgium has low total economic costs
for wheat and milk, but high ones for beef.
Portugal has low operating costs for milk and
beef, but not for cereals.
- Spain, Estonia, Lithuania, Latvia, Poland and
Bulgaria have low total economic costs for the
products studied.
The main drivers of high or low total costs may
differ considerably among Member States. For
example, Denmark’s high total economic costs
are mostly driven by very high amounts of
interest paid, whereas in the case of Romania it is
due to a low yield for cereals and to high family
labour input for milk.
- Denmark, Greece, Austria, Finland, Sweden,
Cyprus, Malta and Romania have very high total
economic costs.
- France, Luxembourg, the Netherlands, the Czech
Republic (except barley) and Hungary are close to
the EU-27 average total economic costs for the
products studied.
Finally, it should be underlined that the national
average may conceal wide disparities across
farms within the country.
You can find more details in the sector farm reports, available at:
http://ec.europa.eu/agriculture/rica/publications_en.cfm
Cereal farms report 2010
http://ec.europa.eu/agriculture/rica/pdf/cereals_report_2010.pdf
Dairy farms report 2010
http://ec.europa.eu/agriculture/rica/pdf/dairy_report_2010.pdf
Beef farms report 2010
http://ec.europa.eu/agriculture/rica/pdf/sa502_beefreport.pdf
Farm economics brief
Page 13 / 14
Figure 12: Member States’ total economic costs in comparison with the EU-27 — 2007
-80%
-60%
Wheat
Barley
Grain maize
Cereals
Milk
Beef - breeders
Beef - fatteners
Beef - b&f
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
BE
DK
DE
EL
ES
FR
IE
IT
LU
NL
AT
PT
FI
SE
UK
CY
CZ
EE
HU
LT
LV
MT
PL
SK
SI
BG
RO
Source: EU FADN — DG AGRI, Models for the allocation of costs. Data are not displayed when there are not enough specialised farms in the
Member State.
Farm economics brief
Page 14 / 14