2120 final report.pdf - Agra CEAS Consulting

THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENSA1.2.2.4. Production costsTypical variable costs of production are presented in Table A1.9 and fixed costs in Table A1.10.Based on the technical factors presented in Section A1.2.2.3 there is an additional cost for feed in thebarn and enriched cage system. Other key points to note are that while variable costs were found tobe highest in the enriched cage system fixed costs were considerably lower (due to the different sizeof units). Given that the price obtained for barn eggs is higher than that for eggs from cagedproduction these numbers suggest the enriched cage provides the lowest gross margin of the threesystems studied 43 .Table A1.9: Variable costs of production 2003 (€ per kg)Traditional cages Enriched cage BarnFeed cost 40.57 41.19 38.93Medication/vet 0.20 0.30 0.20MiscellaneousBird depreciation/live pullets 16.26 15.97 15.72Total variable costs 57.03 57.46 54.84Source: Industry estimates.Table A1.10: Capital (fixed) costs 2003 (€ per kg)Traditional cages Enriched cages BarnLabour 3.73 3.58 12.75Buildings 2.98 3.47 6.49Equipment 5.44 6.97 9.38LandManure disposal 2.01 2.01 2.17Insurance 0.20 0.25 0.38Utilities 2.15 1.95 2.47Cleaning 1.71 1.71 5.47Miscellaneous 4.07 4.58 4.79Total fixed costs 22.30 24.52 43.89Source: Industry estimates.A1.2.2.5. Gross marginsBuilding on the cost data in Section A1.2.2.4, Table A1.11 presents revenue figures and from thiscalculates producer gross margin. It should be stressed that the prices obtained in 2003 were higherthan normal for caged eggs reflecting a tightening of supply.43 At the time of writing still awaiting confirmation of Belgian price on barn eggs.120