Bloomberg News

French Farm Income to Fall 2.3% in 2011 as Fertilizer Costs Rise

December 20, 2011

Dec. 20 (Bloomberg) -- French farm income is expected to fall 2.3 percent this year, weighed down by higher costs for fertilizer and animal feed, the Agriculture Ministry reported.

Average pretax operating income per farmer this year is estimated at 30,200 euros ($39,526) from 30,900 euros in 2010, the ministry’s statistical department Agreste said in an e- mailed report today.

France is the European Union’s largest agricultural producer, with farm output of 66.7 billion euros at basic prices, or 19 percent of the 27-nation bloc’s production, according to the EU’s statistical agency Eurostat.

“Despite prices holding up well and business being vigorous, the rise of production costs penalizes the revenue of plant producers as well as animal producers,” Agreste wrote in the report.

Earnings for producers of commodity crops including grains, oilseeds and sugar beets are forecast to slump 22 percent to an average 37,300 euros per farmer from 47,700 euros, the statistics department said.

“Other than the cost of fertilizer and energy, the drop in revenue is a result of the yield decline for most of the cereals following the drought in the spring of 2011,” Agreste wrote. “However, corn production progresses, helped by the summer rains.”

Vineyard income is estimated to climb to 55,100 euros this year from 36,400 euros in 2010, helped by a bigger grape harvest and rising wine prices on the back of increased exports, according to the ministry’s statistics service.

Dairy Cows

The average holder of dairy cows will see pretax earnings climb to 30,300 euros from 25,800 euros, while earnings for beef-cattle producers are estimated at 13,700 euros from 15,600 euros, the report showed.

“The cost of animal feed, even if stabilized at the end of the year, hurts the revenue,” Agreste said. “It’s compensated by a favorable price evolution in dairy-cattle and poultry breeding.”

Pig-farmer income will fall to an average 26,500 euros from 35,600 euros, while earnings for poultry breeders are estimated to have climbed to an average 32,100 euros in 2011 from 30,500 euros, according to the report.

Vegetable and mushroom growers will see their income slide to an average 10,400 euros per farmer from 31,000 euros in 2010, according to the data. The industry suffered from the effects of the E. coli outbreak in Germany, which prompted an 11 percent slump in vegetable prices, Agreste said.

--Editors: John Deane, Alastair Reed

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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