Bloomberg News

French Farm Income Rises 3.8% as Wine and Dairy Profits Climb

July 05, 2012

French farm income rose 3.8 percent in 2011 as wine and dairy producers got higher prices and increased output, even as earnings for grain growers fell after a spring drought, the Agriculture Ministry said.

Average pretax operating income per farmer climbed to 32,500 euros ($40,729) from 31,300 euros in 2010, the ministry’s statistical department Agreste said in a report on its website yesterday. The ministry in December had predicted lower income.

France is the European Union’s largest farm producer, with agricultural output last year of 68.1 billion euros at basic prices, or 18 percent of the 27-nation bloc’s production, according to the EU’s statistics agency.

“The average revenue of agricultural business improves in half of the regions, essentially those dominated by wine and dairy farming,” Agreste said.

Farm income exceeded the 30,200 euros forecast by the ministry in December, as vineyard earnings rose more than expected and income from commodity crops and raising beef cattle and pigs fell less than predicted.

Earnings for producers of commodity crops including grains, oilseeds and sugar beets slid to an average 41,700 euros per farmer from 48,200 euros, Agreste said.

“The spring drought of 2011 punished the cereal yields,” the department said. “Increased expenses for fertilizer combined with the decline of production volumes leads to the fall in income for commodity-crop regions.”

Wine Prices

Vineyard income rose to 58,000 euros from 39,100 euros in 2010, helped by a bigger grape harvest and higher wine prices, according to the ministry’s statistics service.

“With more abundant harvest volumes and prices up, income of wine growers continues to improve in 2011,” Agreste said.

The average holder of dairy cows saw pretax earnings climb to 29,900 euros from 26,000 euros, while earnings for beef- cattle producers slipped to 15,400 euros from 15,900 euros, the report showed.

“The dairy farms benefit from the increase in milk prices and milk collection,” the ministry said. “The increase in the production value compensates for the rise in costs.”

Pig-farmer income fell to an average 32,600 euros last year from 36,500 euros as poultry breeders’ earnings rose to an average 33,900 euros from 29,900 euros, according to the report.

Vegetable and mushroom growers’ income dropped to an average 8,100 euros per farmer from 32,700 euros in 2010, hurt by weather conditions that started in the spring, according to the report.

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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