2120 final report.pdf - Agra CEAS Consulting

THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENS2.4.2.2. Fixed costsWhilst variable costs are reasonably uniform between Member States, fixed costs exhibit a fairamount of variation, largely because of differences in the range of costs reported. However, themain fixed costs in terms of individual importance are labour, equipment and buildings, usually in thatorder. For this reason, these are the only cost elements shown separately in Figure 2.20 to Figure2.24 below. All figures are Agra CEAS Consulting calculations based on industry estimates.Key points include the following in relation to each system.Traditional cage system:labour costs vary from 6% to 59% of total fixed costs (Spain and Finland respectively), butaverage 17% at the EU-15 level;the combined building and equipment costs range from 8% to 64% (Finland 15 to Austria) of totalfixed costs, with an average for the EU-15 of 33%. These are usually around one third forbuildings and two thirds for equipment;other fixed costs comprise: manure disposal, cleaning, utility provision and insurance;the Member States with the highest fixed costs broadly follow those with the highest variablecosts and include Italy, Greece and Ireland, although Austria has the highest fixed costs of allMember States as a result of high building and equipment costs;those Member States with the lowest fixed costs (Germany, Belgium, Denmark and Spain) do notmatch the pattern with variable costs so closely.Enriched cage system:as mentioned above, enriched cage costs should be treated with caution;the UK figure is so low relative to Sweden mainly as a result of economies of scale in relation tobuilding cost, labour and other costs; and,the variation between the UK enriched cage fixed costs and those for the traditional cage are theresult of differences in scale, fixed costs would be higher in the enriched cage system at anequivalent scale.Alternative systems:fixed costs for the alternative systems follow broadly the same pattern as for variable costs withDenmark being towards the lower end of the scale and Austria at the higher end;labour costs generally become more important as a proportion of total fixed costs as systemsrequire greater labour input, i.e. from barn to free range to organic.15 Building and equipment costs in Finland are dwarfed by labour costs.37