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2120 final report.pdf - Agra CEAS Consulting

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THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENSIt was not felt meaningful to provide a net margin figure (although this can be calculated simply byremoving total fixed costs from gross margin) mainly because of the difference between the periodover which buildings and equipment are depreciated and the useful life of these investments.Total output showing the proportion covering variable costs and that providing gross margin for thevarious systems for all Member States are presented in Figure 2.33 to Figure 2.37 below. All figuresare <strong>Agra</strong> <strong>CEAS</strong> <strong>Consulting</strong> calculations based on industry estimates. Note that data on barnproduction in Sweden was not made available to the consultants, the absence of data for all otherMember States signifies that the system is not in operation. Figure 2.38 to Figure 2.42 present thegross margin data separately to facilitate comparison between Member States.Key points include the following in relation to each system.Traditional cage system:the highest gross margins are obtained in Portugal, Spain, Germany and the UK, while the lowestare obtained in France, Finland and Italy;there is little apparent relationship between total variable cost and gross margin in that Portugal,with the second lowest variable costs has the highest gross margin and Belgium has the lowestvariable cost, yet one of the smallest gross margins.Enriched cage system:as mentioned above, enriched cage costs and hence gross margin should be treated with caution;the highest margin is obtained in Sweden as a result of the higher relative output, variable costsbeing broadly equivalent.Alternative systems:the highest gross margins are available in Denmark and Greece for barn systems and in Irelandand the UK for free range systems. This is likely to result from the consumer willingness to payfor eggs from alternative systems as, if anything, variable costs in these countries are generallyhigher than the EU-15 weighted average;similarly, Denmark and the UK show high gross margins for the organic system, most likely forthe same reason, although in this case variable costs in the UK are also marginally below the EU-15 weighted average.47

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