2120 final report.pdf - Agra CEAS Consulting

APPENDIX 1: MEMBER STATE REPORTSlow bird depreciation cost for the enrichable system is a function of scale rather than system in thatpullets can be bought more cheaply.Table A1.128: Variable (running) costs of production (per kg eggs) (prices in € at £ =€1.48358) 2003TraditionalcagesEnriched cages Barn Free range OrganicFeed cost 42.37 42.16 48.70 55.07 107.85Medication/vet 0.47 0.47 1.27 1.11 0.456372MiscellaneousBird depreciation 18.79 18.57 20.86 21.29 23.19Total variable costs 61.62 61.20 70.84 77.47 131.50Notes:Whilst medication and veterinary bills are considered to be insignificant per dozen eggs and are therefore omitted,they are nonetheless considerably higher in some alternative systems compared to caged systems. No miscellaneous costs are recorded.Source: Industry estimates.Table A1.129 presents fixed costs. As mentioned above, data have been contributed from a range ofsources. Whilst variable costs are little different given the fact that they are essentially made up offeed and bird depreciation, fixed costs are heavily influenced by scale and degree of automation. Itwould therefore be misleading to take into account the performance of a very large, modern andfully automated (in-line packing) system when this is not representative of the majority of theindustry. However, the fixed costs from such an enrichable system are presented on the groundsthat any enriched systems installed will be modern and are likely to be highly automated. Althoughthe total fixed cost for the enriched system is considerably lower than that of the representativetraditional caged system, where the traditional caged system is equally automated and modern, fixedcosts in the enrichable variant are approximately 50% higher. The reason for this is the higherequipment cost 145 .The fixed cost of the enriched system is lower than the alternative systems as a result of scale.Although not apparent at two decimal places, there are insurance and utility costs associated withthis system. The main point of difference is the labour cost, although it is interesting to note thelower cost for buildings (which includes equipment) and for utilities.145 The same building, with the same construction cost, could be used for either system.322