Farm Economics brief

N°2 EU production costs overview

July 2011

Contents
The effect of the
economic crisis on
costs and margins
Operating costs in
the EU groups
Highly contrasted
costs among the
Member States
Total economic
costs lower in EU-
10 but increasing
Introduction
This brief presents key findings on EU production costs for the following
agricultural sectors: cereals, dairy and beef. Cost levels and their breakdown are
compared between EU groups, and among Member States. The brief looks not
only at operating costs, but also at total economic costs including opportunity
costs for family factors. This allows the comparison of total costs for farms with
different structures in terms of land, labour and capital.
Cost and margin developments in recent years are analysed and the impacts of
the agricultural price boom and the economic crisis are assessed. Given the
contrasted trends in prices and costs, margins have been squeezed in 2008 for
beef and in 2009 for milk and cereals.
Looking at margins, data show that low costs do not necessarily mean high
margins, and the inverse also holds. In addition, margins do not only depend on
the level of prices, but also on coupled subsidies. In the EU-10 in particular, total
economic costs are in general lower thanks to lower opportunity costs for family
labour and capital.
Differences in production costs illustrate the variety of production systems, of
natural conditions, and of economic contexts in the EU. Some trends may be
explained by changes in exchange rates as not all Member States are in the
Eurozone.
Production costs and margins were estimated based on data from the Farm
Accountancy Data Network (FADN). The FADN is an annual sample survey
collecting structural and accountancy data on farms. This brief gives a glimpse of
the latest sector reports available on this website:
http://ec.europa.eu/agriculture/rica/publications_en.cfm

This publication does not necessarily reflect the official opinion of the European Union. Neither the European Union
institutions and bodies nor any person acting on their behalf may be held responsible for the use which may be made of the
information contained therein.
Contact: DG Agriculture & Rural Development, Microeconomic analyses of EU agricultural holdings
E-mail: agri-rica-helpdesk@ec.europa.eu Internet: http://ec.europa.eu/agriculture/rica/index.cfm

© European Communities, 2011. Reproduction is authorised, provided the source is acknowledged as "European Commission – EU FADN", save
where otherwise stated. Where prior permission must be obtained for the reproduction, such permission shall cancel the above mentioned general
permission and shall clearly indicate any restrictions on use. When data/information are adapted or modified by the user, this shall be explicitly
stated at a suitably prominent place in the work.
 1. The effect of the economic crisis on operating costs and
gross margins
Box 1: Definition – operating costs
Operating costs cover all cash expenditures necessary
to operate, for example feed and veterinary costs,
energy, seeds, fertilisers, pesticides (wages, rent and
interest paid are not included here). Gross margins
correspond to the total receipts from the product
(including possible coupled payments) minus the
operating costs. The costs and margins are expressed
per unit of product.
For the products analysed, EU-15 operating costs
(see Box 1) increased steadily in nominal terms
over the period 2000-2007.
Figure 1: Trend in EU operating costs (nominal terms)
Cereals and milk - €/t
Cereals Milk Beef - breeders
300
The main drivers of the increase depend on the
sector.
For milk, the rise was mainly driven by energy and
labour costs. For cereals, it was mostly explained by
fertilisers, machinery, seeds and crop protection.
Milk costs have risen mainly since 2007.The average
annual growth was and 4.6 % for beef breeders and
fatteners (farms combining both breeding and
fattening).
In the EU-10, the rise in operating costs over the
period 2004-2007 was more significant: from 2.5 %
average annual growth for beef breeders and
fatteners to 25 % for cereals (Figure 1).
Operating costs - EU-15
Beef - fatteners Beef - b&f
1 400

1 200

beef - €/cow or €/male cattle sold

250

1 000
200
800
150
600
100
400

50 200

0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
estimate estimate

Operating costs - EU-10 Operating costs - EU-2

Cereals Milk Beef - breeders €/t
Cereals Milk
Beef - fatteners Beef - b&f 300
300 1 400
beef - €/cow or €/male cattle

Cereals and 250

250 1 200
milk - €/t
1 000 200
200
800
sold

150
150
600
100 100
400
50 200 50

0 0 0
2004 2005 2006 2007 2008 2009 2007 2008 2009
estimate estimate estimate estimate

Source: EU FADN — DG AGRI, Models for the allocation of costs.

Farm economics brief Page 2 / 14

In the livestock sectors, operating costs rose For beef, prices did not change dramatically between
abruptly in 2008 (from +12 % to +26 %, depending 2007 and 2009, so gross margins diminished in 2008
on the EU-group and on the product). This was (Figure 2). Given the developments in prices (peak in
primarily due to the increase in feed costs (+38 % 2008 and dramatic drop in 2009), milk and cereals
between 2007 and 2008 for milk in the EU-15). In gross margins were squeezed in 2009 (Figure 3).
2009, feed costs decreased significantly and so did
Figure 4 below illustrates the disruption in the
operating costs; yet they remained higher than
pattern of output and input price developments in
their 2007 level.
recent years. A rather steady pattern of real price
On the other hand, 2008 cereals operating costs declines in output and input prices, with the former
decreased by 10 % in comparison with 2007 decreasing faster, was observed until 2005.
(average for the EU-27) thanks to better yields.
However, since 2006, the gap between input and
But they increased significantly, by 17 %, between
output prices has widened faster, driven mainly by
2008 and 2009. The main items contributing to
factors outside agriculture: energy prices, exchange
this increase were fertilisers, machinery costs,
rates, and financial events.
seeds and crop protection.
Figure 2: Trend in beef revenues and costs Figure 3: Milk and cereals revenues and costs
breeders Beef Cereals and m ilk
and b&f- breeders revenues
Cereals revenues
€/cow breeders operating costs
Cereals operating costs
fatteners - fatteners revenues
€/t Milk revenues
€/male fatteners operating costs Milk operating costs
cattle sold b&f revenues
b&f operating costs 400
1 800
350

1 600 300

1 400 250

200
1 200
150
1 000
100
800
50

600 0
2007 2008 estimate 2009 estimate 2007 2008 estimate 2009 estimate

Source: EU FADN — DG AGRI, Models for the allocation of costs. Source: EU FADN — DG AGRI, Models for the allocation of costs. Revenues
Revenues include coupled subsidies. include coupled subsidies.

Figure 4: Development in agricultural output and input prices

Source: Eurostat — price statistics — Elaboration DG AGRI.

Farm economics brief Page 3 / 14

 2. Operating costs in the EU groups

Box 2: Terminology
The following terminology is used with regard to costs. Total economic costs comprise of:
- operating costs:
o specific costs (seeds, fertilisers, crop protection, or feed, veterinary costs)
o non-specific operating costs (machinery and buildings, power (fuel and electricity), contract work, taxes and
other dues, taxes on land and buildings, insurance for farm buildings and other direct costs);
- depreciation;
- external factors (wages, rent and interest paid);
- opportunity costs for unpaid family factors (family labour cost and own capital cost).

Operating costs for cereals in 2007 do not differ
much between EU groups (Figure 5): they remain
between -7 % and +10 % around the EU-27
average. The only exception is the EU-10 average
operating costs for grain maize, which are 20 %
higher than the EU average. The grain maize yield
was indeed exceptionally low in 2007 in the EU-10.
We look indeed at the development of costs per
tonne, so in the case of cereals, the fluctuations of
yield play a major role in the development of the
cereals costs per tonne.
For milk, beef fatteners and beef breeders and
fatteners, the contrast between EU groups is more
marked: the EU-10 and EU-2 have significantly
lower operating costs than the EU-27 average (-
18 % and -27 % respectively for milk). Beef
breeders’ operating costs are similar for all EU
groups.
The breakdown of operating costs depends
primarily on the sector considered. In cereals,
fertilisers, crop protection and energy represent
the bulk of the operating costs (around 50 - 60 %
on EU average). For milk, the most important
cost item is feed (around 50 %). Energy
represents between 9 % of the average milk
operating costs in the EU-15 and 14 % in the EU-
10 and EU-2.
Feed is also a major cost item for beef breeders
and fatteners in the EU-15 (40 %); however, in
the EU-10, it represents only 20 % of the
operating cost given the lower price for feed.
In the EU-10, the beef non-specific costs are
considerably higher because of the substantial
costs of building and machinery upkeep, and
energy costs.

Farm economics brief Page 4 / 14

Figure 5: EU groups' operating costs by product - 2007
€/t Cereals operating costs - 2007 Cereals €/t - operating costs - 2007

Wheat operating costs - €/t Barley operating costs - €/t Fertilisers and crop protection Fuel and energy
Grain maize operating costs - €/t Cereals operating costs - €/t Other operating costs
140 100%
125
119 118 118 90%
120 107 110 106 107
80% 42
54 59 52
100 70%
80 60%
50% 22
60
15 17
40% 24
40
30%
20 20% 38 43 38
35
10%
0
EU-15 EU-10 EU-2 EU-27 0%
EU-15 EU-10 EU-2 EU-27

€/t Milk operating costs - 2007 Milk €/t - operating costs - 2007

250
Feed Fuel and energy Other operating costs
201 100%
196
200 90%
51 47
162 80% 89 85
143 70%
150
60% 22 20
50% 18 18
100
40%
30% 89 76
50 94 93
20%
10%
0 0%
EU-15 EU-10 EU-2 EU-27 EU-15 EU-10 EU-2 EU-27

Beef operating costs - 2007 Beef breeders & fatteners €/cow - operating costs -
Beef - breeders operating costs - €/cow 2007
Beef - fatteners operating costs - €/male cattle sold Feed Animal purchase
Beef - b&f operating costs - €/cow Fuel and energy Other operating costs
1 400 100%
1 196 1 188
1 200 1 106 1 105
90%
401 400
80% 401
1 000 944 941
70%
726 723 71 73
800 682 60%

600 50% 299 147

295
40%
400 195
30%
200 20% 426 419
10% 198
0
EU-15 EU-10 EU-2 EU-27 0%
EU-15 EU-10 EU-2 EU-27

Source: EU FADN — DG AGRI, Models for the allocation of costs.

Farm economics brief Page 5 / 14

 3. Highly contrasted operating costs among the Member
States

Box 3: Methodology
The production costs and margins analysed in this brief are estimated based on the Farm Accountancy Data Network
(FADN) database. The FADN is a European system of sample surveys that take place each year and collect structural
and accountancy data relating to farms; their aim is to monitor the income and business activities of agricultural
holdings and to evaluate the impacts of the Common Agricultural Policy (CAP).
Costs available in the database are for the whole farm. Models are used to allocate farm costs to a particular product.
They use different ratios: for example, product output to total output. They are calculated based on samples of
specialised farms (for example, farms for which more than 40 or 50 % of the output comes from the product
considered). For 2007 production cost estimates, the samples of specialised farms studied represent 28 % of the
cereals area, 71 % of dairy cows and 74 % of the suckler cow herd. It should be underlined that the presented EU or
Member States average figures are not weighted by volume or value of EU or Member State production, but by
number of farms represented in the population. In certain cases, there are not enough specialised farms in the EU-
group or in the Member State to allow calculating an estimate. This is why there are some blanks in certain tables or
graphs.
For 2008 and 2009, operating costs and gross margins have been estimated on the basis of agricultural price indices
and input price indices (source DG AGRI and ESTAT). Farm structures were assumed to remain unchanged.

Figure 6 on the following page shows the
difference between the national average
operating costs and the EU-27 average for each
analysed product. This difference ranges from -
63 % (Portugal, for beef breeders and fatteners) to
+84 % (Belgium, for beef breeders and fatteners)
of the EU-27 average, reflecting the variety of
production systems in the EU and the cost aspect
of the national competitiveness for the product in
question.
For these products, Member States can be ranked
according to their level of operating costs:
- Spain, Estonia, Lithuania, Poland and Slovenia
have low operating costs in comparison with the
EU-27 average.
- Denmark, Greece, Finland, Sweden, the United
Kingdom, Cyprus, the Czech Republic, Hungary,
Malta and Slovakia have high operating costs in
comparison with the EU-27 average.
- France, Luxembourg, the Netherlands and Austria
are close to the EU-27 average operating costs for
the products studied.
- Belgium, Germany, Italy, Ireland, Portugal, Latvia,
Bulgaria and Romania provide a mixed picture based
on the product in question. For example, Belgium has
low operating costs for milk, but very high ones for
beef, especially for breeders and fatteners. Portugal
has very low operating costs for beef, but not for
cereals. Bulgaria has low operating costs for milk, but
not for grain maize.
It should be underlined that since not all Member
States are members of the Eurozone, changes in the
exchange rate may explain some differences
between Member States. The value of labour, land,
and buildings decreases in euro terms when the value
of a non-euro currency falls. On the other hand
tradable inputs (fertilisers, pesticides, energy) get
more expensive.

Farm economics brief Page 6 / 14

Figure 6: Member States' operating costs in comparison with the EU-27 average - 2007
Wheat Barley Grain maize Cereals
Milk Beef - breeders Beef - fatteners Beef - b&f

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100%

BE

DK

DE

EL

ES

FR

IE

IT

LU

NL

AT

PT

FI

SE

UK

CY

CZ

EE

HU

LT

LV

MT

PL

SK

SI

BG

RO

Source: EU FADN — DG AGRI, Models for the allocation of costs. Data are not displayed when there are not enough specialised farms in the
Member State.

Farm economics brief Page 7 / 14

Figures 7 and 8 illustrate the average operating For cereals, Cyprus and Finland have the highest
costs and the gross margin by Member State for operating costs. However, high operating costs are
2007 and by analysed product. It should be not driven by the same factors in the two countries.
underlined that there is no systematic negative In Cyprus the high operating costs are mainly driven
correlation between operating costs and gross by very high fertiliser and crop protection costs. In
margins, as these depend on the price level and on Finland they are explained mainly by machinery and
the possible coupled subsidies applied in the building upkeep and other direct costs (insurance,
Member State. taxes, etc.).
Therefore it should be kept in mind that low Poland, Estonia, Lithuania and especially Spain have
operating costs do not necessarily mean high very low operating costs in most products. The main
profitability or vice versa. For example thanks to drivers of these low costs likewise differ according to
high prices and coupled subsidies, Finland has a the Member State and to the sector.
good average milk gross margin despite its very
For milk, the lowest average operating costs are for
high operating costs (Figure 7). Similarly, thanks
Lithuania, Romania and Poland. Malta and Finland
to strong prices, Belgian beef breeders and
have the highest costs.
fatteners have one of the highest gross margins in
spite of their extraordinarily high operating costs
(Figure 8).

Figure 7: Operating costs and gross margin by Member State — 2007 (cereals and milk)
€/tonne Cereals - 2007
operating costs - €/t gross margin - €/t
200
180
the lowest operating costs 172 the highest operating costs
155
160
138 133
140 132
126 124 126 124 122
121 117 120 119
120 111 112 108
103 94 94
100
74 81
80

60

40

20
0
DK DE EL ES FR IE IT AT PT FI SE UK CY CZ EE HU LT LV PL SK BG RO

Milk - 2007
€/t
operating costs - €/t gross margin - €/t
350
309
300 278

250 234 229

223 223 219
170 202 187
161 197 201 194 196
173 189 190
200
166 166 163 157
112 146 139
150

100

50

0
BE DK DE ES FR IE IT LU NL AT PT FI SE UK CZ EE HU LT LV MT PL SK SI BG RO

S
ource: EU FADN — DG AGRI, Models for the allocation of costs. Gross margins include coupled subsidies (but not decoupled payments, included in
income). Data are not displayed when there are not enough specialised farms in the region.

Farm economics brief Page 8 / 14

When considering costs and margins for the beef The lowest costs are observed in Portugal, Spain and
sector, the reader should keep in mind that results the Czech Republic.
are expressed per cow or male cattle sold. The
It is also interesting to note that some Member
final product is not always homogeneous (i.e.
States have a very different level of operating costs
quantity of meat produced per cow), particularly
depending on the system (breeder/breeder and
between Member States, thus comparisons
fattener/fattener).
should be interpreted with caution.
For example Italy appears to have on average low
In beef, national average operating costs reflect
operating costs for breeders and for breeders and
natural conditions and/or the existence or non-
fatteners but it has the highest operating costs for
existence of quality-oriented systems for cattle
fatteners. However, this does not prevent Italy from
breeding and fattening. The highest total
having a good gross margin for all production
operating costs were found in Belgium (specific
systems thanks to good prices. On the other hand,
high quality production), Finland and Sweden
Spain and Portugal have very low operating costs for
(extreme climatic conditions) (Figure 8).
all production systems.
Figure 8: Operating costs and gross margin by Member State — 2007 (beef)
Beef breeders - 2007
€/cow operating costs - €/cow gross margin - €/cow
1 400 1 232
1 130
1 200
990
1 000 890 835 788 785 784 793
800 650 644
552 492 529
600
353
400
200
0
-200
-400
BE DK DE ES FR IE IT LU AT PT FI SE UK CZ SI

Beef fatteners - 2007

€/male cattle sold
operating costs - €/male cattle sold gross margin - €/male cattle sold
1 400 1 307

1 200 1 096 1 107 1 118 1 075

1 000 913
800
800

600

400

200

0
BE DK DE EL ES FR IE

Beef breeders and fatteners - 2007

€/cow
operating costs - €/cow gross margin - €/cow
2 500 2 185
1 923
2 000 1 721
1 539
1 500 1 269 1 346
1 147
1 016 935
1 000
656
437
500

0
BE DE ES FR IE IT LU PT FI SE UK
-500

Source: EU FADN — DG AGRI, Models for the allocation of costs. Gross margins include coupled subsidies (but not decoupled payments, included
in income). Data are not displayed when there are not enough specialised farms in the Member State.

Farm economics brief Page 9 / 14

The structure of operating costs can be very Feed is a major component of operating costs for
different from one Member State to the other milk and beef production in Italy, Spain, Portugal
(Figure 9). Fertilisers and crop protection and Malta: Southern countries have greater
represent almost 45 % of cereals operating costs in recourse to purchased feed, which is more
Cyprus, Lithuania, Latvia and Poland, and only expensive.
21 % in Austria. Energy accounts for a large share
In Finland and Austria other operating costs
of cereals operating costs in Portugal, Hungary
represent a large share of total operating costs
and Latvia, and a relatively limited one in Ireland,
for all the products presented, mainly because of
France and Denmark.
the weight of the machinery and building upkeep
For milk production feed can represent a widely cost in these countries.
varying share of the operating costs, ranging from
36 % in Luxembourg to 80 % in Malta.
Figure 9: Breakdown of operating costs by Member State and product — 2007
Cereals €/t - operating costs - 2007
Cereals - €/t Fertilisers and crop protection Cereals - €/t Fuel and energy Cereals - €/t Other operating costs
100%
90%
36 27 42 31 42
80% 62 78 56 57
57 38 55 50 57 62 59 66 59
87 65
70% 85 73
60% 17 19
25
50% 18
19 7 18
11 22 20 30
22 20 14 28
40% 13 22 35
22
27
30% 11 18

57 46 46 76 40 37 52 43
20% 42 46 46 47
22 33 41 40 36 34
35 26 36 40
10%
0%
DK DE EL ES FR IE IT AT PT FI SE UK CY CZ EE HU LT LV PL SK BG RO

Milk €/t - operating costs - 2007

Feed Fuel and energy Other operating costs
100%
90%
26
80%
17
70% 19
11
17 18
25 27
60% 41
20 34 21
13 13 22
50% 11 11 23 36
27
14 19 26
18 14
40% 247
110 124 110
30% 117 128 85
98 91 109
77 90 78 107 52 89 74 66
20% 94 85 64 74 80 108 93

10%
0%
BE DK DE ES FR IE IT LU NL AT PT FI SE UK CZ EE HU LT LV MT PL SK SI BG RO

Beef breeders & fatteners €/cow - operating costs - 2007

Feed Animal purchase Fuel and energy Other operating costs

100%
90% 134 155
525 112
376 444 584 495
80% 484 95
65
526 39 931
70% 57
76 98
141 55 245 183
60% 66
703
50% 82
153 163 474
287 272 435 427
40%
306
30% 200
342 441
20% 892 186
432 313 390 527 473
269 523
10%
0%
BE DE ES FR IE IT LU PT FI SE UK

Source: EU FADN — DG AGRI, Models for the allocation of costs. Data are not displayed when there are not enough specialised farms in the
Member State.

Farm economics brief Page 10 / 14

 4. Total economic costs lower in EU-10 but increasing
In this chapter, we look at total economic costs,
which take into account operating costs and all
other costs (see Box 2). They allow comparing
total costs for farms with different structures in
terms of land, labour and capital and to explain
some differences of competitiveness among
Member States.
For the sectors analysed, EU-15 and EU-2 total
economic costs are in general very close to the
EU-27 average (Figure 11). The exception is with
the EU-2 grain maize total economic costs, which
are 25 % higher than the EU-27 average as a result
of the exceptionally bad yield in 2007.
Expressed in EUR/ha, EU-2 cereals costs are
significantly lower than EU-15 ones.
In contrast, for all products studied, EU-10 total
economic costs are more or less lower (from -9 %
to -20 % in comparison with the EU-27 average).
This is in particular due to lower imputed family
factors (Figure 11). However, it should be noted
that both external and imputed family factors
have been steadily rising since 2004 in the EU-10
(Figure 10), driving the increase in total economic
costs.
Such increases (in wages, family labour costs,
rent, etc.) probably reflect a mix of increasing
living standards and the strengthening of
currencies of those Member States.
In the milk sector, EU-10 external wages
increased faster than the net margin (amount
available to remunerate own factors). This
explains the increase in the total economic costs
of the EU-10 for cereals and milk (Figure 10). In
the EU-15 the trend in total economic costs is
quite flat over the period 2000-2007 or very
slightly increasing depending on the product.
The breakdown of total economic costs shows
that operating costs represent between 40 % and
55 % of total economic costs (Figure 11). On
average, the share of operating costs is a little
higher for livestock sectors. In the EU-10, they
represent the highest share (55 %) for all the
products studied given the lower costs for
external and family factors explained above.
Depreciation is generally lower in the EU-10 and
EU-2 groups due to older buildings or equipment
and/or the longer average life of assets and/or
lower prices of assets.
In the EU-2 external and imputed family factors
represent a large share of the total costs. This is
mainly due to the high labour input in Bulgarian
and Romanian farms. In spite of very low wages
per hour the total labour cost is high.
The shares of external and family factors differ
greatly between cereals and milk. This is because
on average in the EU-2 farms specialised in
cereals rely heavily on paid labour whereas milk
specialised farms rely heavily on family labour.

Figure 10: Trend in EU total economic costs (nominal terms)

EU-15 total econom ic costs
EU-10 total econom ic costs
Cereals
Cereals and milk - €/t Cereals EU-15 Milk EU-15 Beef - b&f EU-15 Cereals EU-10
and milk -
400 2 500 €/t Milk EU-10

350 350
2 000
300 300

250
beef - €/cow

250 1 500
200 200

150 1 000 150

100 100
500
50 50

0 0 0
2000 2001 2002 2003 2004 2005 2006 2007 2004 2005 2006 2007

Source: EU FADN — DG AGRI, Models for the allocation of costs.

Farm economics brief Page 11 / 14

Figure 11: EU groups’ total economic costs by product — 2007
€/t Cereals total econom ic costs - 2007 Cereals €/t - total econom ic costs - 2007
Wheat total economic costs - €/t Barley total economic costs - €/t Operating costs Depreciation
Grain maize total economic costs - €/t Cereals total economic costs - €/t
External factors Imputed family factors
300
252 100%
244 248 241 242
250 235 90% 37 39
78 69
193 80%
191 19
200 70% 56
28 29 29
60%
150 28
50% 31 31

100 40%
30% 106
50 107 118 107
20%
10%
0
0%
EU-15 EU-10 EU-2 EU-27
EU-15 EU-10 EU-2 EU-27

€/t Milk total econom ic costs - 2007 Milk €/t - total econom ic costs - 2007

400 Operating costs Depreciation

373 366
361 External factors Imputed family factors
350 100%
294 90% 84
300 69 85
80%
170
250 70% 42 26 40
60% 46 37 44
200
50% 22
150 26
40%
30% 201 162 196
100
20% 143
50 10%
0%
0
EU-15 EU-10 EU-2 EU-27
EU-15 EU-10 EU-2 EU-27

Beef total econom ic costs - 2007 Beef breeders & fatteners €/cow - total econom ic
Beef - breeders total economic costs - €/cow costs - 2007
Beef - fatteners total economic costs - €/male cattle sold Operating costs Depreciation
Beef - b&f total economic costs - €/cow
External factors Imputed family factors
2 500 2 320 2 304
100%

1 874 90%
2 000 719 577 714
1 460 1 458 80%
1 519 1 512 70% 110
1 258
1 500 150 149
1 314 60% 245
254 254
50%
1 000
40%
30% 1 196
500 1 196 1 188
20%
10%
0
EU-15 EU-10 EU-2 EU-27
0%
EU-15 EU-10 EU-27

Source: EU FADN — DG AGRI, Models for the allocation of costs. Data are not displayed when there are not enough specialised farms in the
Member State.

Farm economics brief Page 12 / 14

The difference between the national average total
economic costs and the EU-27 average is
presented in Figure 12. It can range from -56 %
(Portugal, for beef breeders and fatteners) to
+98 % (Cyprus, for cereals) compared to the EU-27
average. It allows Member States to be classified
according to their level of total economic costs:
- Spain, Estonia, Lithuania, Latvia, Poland and
Bulgaria have low total economic costs for the
products studied.
- Denmark, Greece, Austria, Finland, Sweden,
Cyprus, Malta and Romania have very high total
economic costs.
- France, Luxembourg, the Netherlands, the Czech
Republic (except barley) and Hungary are close to
the EU-27 average total economic costs for the
products studied.
- Belgium, Germany, Ireland, Italy, Portugal, the
United Kingdom and Slovakia have a contrasted
situation according to the product studied. For
example, Belgium has low total economic costs
for wheat and milk, but high ones for beef.
Portugal has low operating costs for milk and
beef, but not for cereals.
The main drivers of high or low total costs may
differ considerably among Member States. For
example, Denmark’s high total economic costs
are mostly driven by very high amounts of
interest paid, whereas in the case of Romania it is
due to a low yield for cereals and to high family
labour input for milk.
Finally, it should be underlined that the national
average may conceal wide disparities across
farms within the country.

You can find more details in the sector farm reports, available at:
http://ec.europa.eu/agriculture/rica/publications_en.cfm
Cereal farms report 2010
http://ec.europa.eu/agriculture/rica/pdf/cereals_report_2010.pdf
Dairy farms report 2010
http://ec.europa.eu/agriculture/rica/pdf/dairy_report_2010.pdf
Beef farms report 2010
http://ec.europa.eu/agriculture/rica/pdf/sa502_beefreport.pdf

Farm economics brief Page 13 / 14

Figure 12: Member States’ total economic costs in comparison with the EU-27 — 2007

Wheat Barley Grain maize Cereals

Milk Beef - breeders Beef - fatteners Beef - b&f

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120%

BE

DK

DE

EL

ES

FR

IE

IT

LU

NL

AT

PT

FI

SE

UK

CY

CZ

EE

HU

LT

LV

MT

PL

SK

SI

BG

RO

Source: EU FADN — DG AGRI, Models for the allocation of costs. Data are not displayed when there are not enough specialised farms in the
Member State.

Farm economics brief Page 14 / 14