Income of EU cereal farms increased in 2017 - Main contents
Driven by higher cereal prices and stabilised lower costs, the income of cereal farms in the EU i increased by 14% in 2017, compared to 2016. This is among the key findings of the “EU cereal farms report”, published by the European Commission today. Covering the latest available data from 2008 to 2017 from the farm accountancy data network (FADN), the report gives a general overview of the production costs, profitability (i.e. the profit margins) and incomes of EU cereal farms, including common wheat, durum wheat, grain maize and barley.
The 2009 food crisis had a clear impact on the four type of cereals in the EU. For instance, profitability dropped significantly, with a decline ranging from 27% for maize to 92% for barley. Nonetheless, EU cereal production and profitability recovered swiftly after the crisis, sometimes reaching higher levels than before 2009.
However, due to further drops between 2013 and 2016, overall profitability of cereals in the EU broadly stabilised since 2009. Over the years, the report shows that the most profitable cereal is maize, followed by durum and wheat.
Main costs (categories of expenditure) for cereal production are seeds, fertilisers, crop protection products and machinery/infrastructure. According to the report, the EU average total operating cost for cereals is €635 per hectare. In terms of crops, maize production has higher costs at all levels except for crop protection, which is higher for common wheat production.
Within the EU, costs can be grouped in two big clusters of countries. On one hand, countries such as Hungary, Croatia or the Baltic region have ‘medium average costs’ - around or slightly above €500 per hectare. On the other, the second group has ‘higher average costs’ that are around €800 per hectare, with countries such as Denmark, Germany or France. These costs will depend largely on what type of cereals are grown in the country.
Concerning income, based on the farm net value added (FNVA)’s main income indicator, the impact of the 2009 crisis was also strong, dropping from €20,221 to €12,873 per annual working unit. It recovered slightly in 2011 and 2012 before declining again in 2013, similarly to profit margins. Since then, it has mostly stabilised until a slight improvement in 2017, when it reached €18,400 per annual working unit on average for the EU.
According to the report, the countries and regions that achieved higher added-value for producers (above €40,000 per annual working unit) are east and north Germany, England, Ireland and southern Sweden and Denmark.
Nonetheless, there can be significant differences within the same country. For example in Portugal, Spain or France, income ranges from €10,000 to €40,000 - among the highest and lowest incomes for cereal producers.
All the relevant data on cereal production at EU and member state level is available in the EU cereal farms report.
More information
EU cereal farms report (based on 2017 FADN data)
December 2019
English (5.6 MB - PDF)
Related link
EU crops sector policy information