Production cost: the method in detail in sheep milk

Production cost: the method in detail in sheep milk
Production cost: the method in detail in sheep milk

Since 2010, the Livestock Institute has proposed a method for calculating production costs, harmonized between cattle, sheep and goat production, and which has been taken up by the national inter-professional associations (Interbev, Cniel, Anicap, FBL) for the development of Egalim indicators.

At the workshop scale, this method makes it possible to evaluate all the resources necessary for production: accounting costs, but also the remuneration of the equity capital employed by the breeder and the operating workforce. . For the dairy sectors, the production cost is expressed in euros for 1,000 liters of milk sold in a dairy or processed on the farm.

Three categories of charges

The cost of production is made up of three main categories of charges. Firstly, current charges, which include expenses which gave rise to monetary flows during the financial year, excluding operator social security contributions. Each item is adjusted for stock variations and self-consumed cereals are included on the basis of their production cost.

Next comes depreciation which corresponds to wear and tear and the aging of equipment, buildings, equipment and land improvements.

Finally, extra-accounting charges, called additional charges, are agreements aimed at remunerating owned land (at the average rental price of the farm or region), equity (at the Livret A rate) as well as the labor that the breeder devotes to the workshop and which is taken into account on the basis of 2.0 net minimum wage to which 30% social security contributions are added.

In mixed systems, certain loads are relatively easy to distribute between the different herbivorous plants and large crops. This is the case for operational expenses, particularly purchased power. For other costs, distribution keys were established based on data from Inosys Livestock Networks monitoring.

The product of the sheep milk workshop

The workshop product is made up of three main product categories. The milk product corresponds to the average milk recovery price, whether it is delivered to a dairy or processed on the farm. Added to this are the joint products made up of the proceeds from the sale of lambs, culls, adjusted for purchases of breeding stock and inventory variations, and other products, including sales of fodder.

Finally, the “aid” item includes all the aid that can be allocated to the sheep milk workshop: the coupled aid (the ewe premium) as well as a portion of the decoupled aid and the aid from the second pillar that they were allocated in proportion to the surface area used.

Cost price and remuneration of labor permitted by the products

The cost price is equal to the production cost of the sheep milk workshop from which the amount of aid and other products allocated to the workshop (sale of culls, lambs, etc.) are deducted. This indicator constitutes a point of comparison with the real price of milk received by the farmer.

The remuneration of labor allowed by the products makes it possible to measure the share of products allocated to the workshop which remain once all other expenses have been covered, including the remuneration of equity. The permitted remuneration can be expressed in euros per 1,000 liters or in number of minimum wage per UMO operator.

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