2120 final report.pdf - Agra CEAS Consulting

THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENS2.4. Production costs2.4.1. Calculating production costsProduction cost data were collected in the same way as technical data and the same method ofarriving at final figures where more than one source contributed information was used (see Section2.3.1). In some cases data were calculated from technical factors, for example, bird depreciation.Because data were made available in a variety of forms a number of different calculations had to beemployed in order to arrive at a cost per dozen eggs. At the request of DG SANCO all data werethen converted to kg egg terms at their specified egg weight of 62.5 grams (16 eggs per kg).The following calculations were necessary for variable costs:Feed cost per kg eggs: in some cases a feed price per tonne for 2003 was provided and thiscost was calculated by multiplying this by the feed conversion rate. However, in most cases afigure for actual feed cost per dozen eggs was submitted. This was corrected to kg terms.Medication/veterinary: many Member States did not provide this information on the groundsthat no cost is typically incurred and that even where such a cost is incurred this is too small tofeature in per kg egg terms. That said, it was accepted that there is a higher medication andveterinary cost in alternative systems, particularly free range systems where the birds haveaccess to parasites in soil and are exposed to wild bird populations, the vector for a range ofdiseases including avian influenza and Newcastle disease.Miscellaneous: this is a category for any other variable costs that respondents mentioned, themajority of respondents did not have any costs in this category. In some cases respondents didnot list medication/veterinary costs separately and included them here.Bird depreciation: this figure was calculated in per kg egg terms by dividing the pullet cost bythe number of eggs collected over the laying cycle and multiplying this by 16. This figure istherefore corrected for mortality (see Section 2.3.1).Calculations required to convert raw data into fixed costs per kg eggs are set out below.Labour: this was generally calculated from a requirement per bird per year multiplied by thetypical employment cost, divided by the annual eggs collected figure and multiplied by 16. Insome cases an annual cost for labour was given for a typical house (or calculated from a dailyhourly requirement). This was then divided by the number of laying hens in the house and thenby the number of eggs collected. This was then multiplied by 16 to present the data in per kgegg terms.Buildings: typically the cost of a new building to contain a certain number of hens was provided.This was then divided over a ten-year write off period 13 and then by the number of hens in the13 The choice of ten years is fairly arbitrary, although it was often mentioned as the book write-off period. In practice buildings last for atleast 20 years and the resulting fixed cost is therefore halved. To some extent this compensates for not including an interest charge.31