The production cost approach suggested by the French Livestock Institute (Institut de l’Elevage) has been developed thanks to a close partnership with the Chambers of agriculture within the framework of the French INOSYS livestock networks of reference farms. First of all, this method enables to determine the calculation suited to the characteristics of the French farms very often branched out. It makes it possible to compare them with other global production areas, by building on the methods used by the two global research networks IFCN (International Farm Comparison Network) for dairy production and agri benchmark for beef production. The national production cost method for grazing animals is nowadays made available to the stakeholders of the livestock farming sector who wish to use it, as it has been standardized among the different production sectors. It is also carried out within an advice tool named COUPROD intended for breeders and their agricultural advisors.
THROUGH A UNIT POINT OF VIEW
The production cost is related to the whole unit taken into account, i.e. the breeding stock as a whole and the young animals designed for their replacement: cows and heifers, ewes and ewe lambs, goats and kid goats, including also bulls, rams or billy goats when appropriate. All the areas used for feeding the herd such as the main forage area and those related to intra-unit consumption cereals are considered.
Management of production costs appears as a solution to address the sensitive question of beef farmers’ profits.The French Livestock Institute (FLI), in the framework of the Livestock Farms Networks, developed a method to compute production costs including depreciation and opportunity costs. In a global and volatile market context, farmers need to assess their production costs per unit produced to identify levers. Competitiveness is, as a result, measured by the use of inputs, equipment and services in relation to the level of production. Finally costs are calculated at an enterprise level (livestock units and land), and not at a farm level so as to only focus on the beef sector. These are major benefits from this system.
Main challenges and bottlenecks in the implementation process can be identified. The difficulty was to take into account the diversity of beef cattle systems. Indeed, the beef system diversity in highlights one characteristic of the beef sector: there not one type of beef but different types of beef depending on the animals’ gender, age, fattening stage... The method is relevant for all beef farms no matter the kind of products sold. All costs are divided by the production of live weight (LW) and expressed in € / 100kg LW. Thus, production costs are comparable between beef cattle farms.
Worth mentioning the key success factors in the implementation process. The major interest of the « production cost » approach lies in enabling a basic representation of the unit economic results. Costs and incomes are there expressed in the same unit (€ per 1,000 litters of marketed milk or per 100 kg. of live weight). Being able to compare the value of the various indicators between farms, groups of farms or references is also interesting as long as the methods used for the calculation are properly the same. For sure Producers associations (and other consultants) can use the tool to improve their advice and this best practice van be monitored by looking at the farm economics results and practices.
Such practice can also impact on other thematic areas. Veterinary costs are part of the costs analyzed in the global approached. Furthermore the technical discussion around livestock building can lead to improvement of animal health and welfare. Furthermore improving the practices usually leads to improving environmental impacts (more production with same inputs for example).