January 3, 2012

France's farm income to decrease by 2.3%

French farm income is expected to decline by 2.3% in 2011 because of high cost of fertiliser and animal feed, according to the Agriculture Ministry.

Average pretax operating income per farmer this year is estimated at EUR30, 200 from EUR30, 900 (US$ 39192 from US$40100) in 2010, the ministry's statistical department Agreste said in its latest report.

France is the European Union's largest agricultural producer, with farm output of EUR66.7 billion (US$86.56 billion) at basic prices, or 19% 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 penalises 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% to an average EUR37,300 per farmer from €47,700 (US$48406 from US$61903), the statistics department said.

"Other than the cost of fertiliser 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."

The average holder of dairy cows will see pretax earnings climb to EUR30,300 from EUR25,800 (US$39321.9 from US$33482) , while earnings for beef-cattle producers are estimated at EUR13,700 from EUR15,600 (US$17779 from US$20245), the report showed.

"The cost of animal feed, even if stabilised at the end of the year, hurts the revenue," Agreste said. "It's compensated by a favourable price evolution in dairy-cattle and poultry breeding."

Pig-farmer income will fall to an average EUR26,500 from EUR35,600 (US$34390 from US$46200), while earnings for poultry breeders are estimated to have climbed to an average EUR32,100 in 2011 from EUR30,500 (US$41658 from US$39581).