Ivana Čurila, dipl.oec Luneta d.o.o.
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1 Egg production comparison due to welfare of laying hens in Croatia Ivana Čurila, dipl.oec Luneta d.o.o.
2 - Luneta d.o.o. = family company - Hen farm built in first aviary system in Croatia hens in 2 hen houses, 15-16mil. cage free eggs/year - automated egg packing centre eggs/hour
3
4 Regulations for hen farms in Croatia -laying hens whose production cycle started before Croatia became EU member can be kept in conventional cages latest 12 months after Croatia joined EU
5 Registry of laying hen farms, January => total number of laying hens => hens in conventional cages (85 farms) => hens in enriched cages (22 farms) => hens in aviary systems (16 farms) => hens in free range (19 farms) 150 => organic eggs (1 farm)
6 Structure of keeping laying hens 8% 1% 32% 59% Conventional cages Enriched cages Aviary system Free range
7 Cages? Aviary system?
8 Investing in aviary system AVIARY Description Quantity Unit price (EUR) Total (EUR ) 1. Land m , ,00 2. Building m , ,00 3. Equipment EUR/pullet , ,00 4. Pullets pcs , ,00 5. General costs 5% of investment ,00 6. TOTAL INVESTMENT ,00
9 Investing in cages CAGES Description Quantity Unit price (EUR) Total (EUR ) 1. Land m , ,00 2. Building m , ,00 3. Equipment EUR/pullet , ,00 4. Pullets pcs , ,00 5. General costs 5% of investment ,00 6. TOTAL INVESTMENT ,00
10 Investment difference aviary vs. cages AVIARY ( ) CAGES ( ) DIFFERENCE ( ) Land 2.000, , ,00 Building , , ,00 Equipment , , ,00 Pullets , , ,00 General costs , , ,00 Total investment , , ,00 INVESTMENT IN AVIARY SYSTEM IS 55,79 % HIGHER
11 Profit and loss account AVIARY Description Quantity Unit price Total (EUR) Egg sales egg/hen 307-2% ,00 0, ,00 Hen sales pcs % 9.200,00 0, ,00 Total income ,00 CAGES Description Quantity Unit price Total (EUR) Egg sales egg/hen 315-1% ,00 0, ,00 Hen sales pcs % 9.400,00 0, ,00 Total income ,00
12 Profit and loss account PRODUCTION COSTS STRUCTURE - AVIARY Description Quantity Unit price ( ) Total ( ) Hen feed kg/egg sold 0, ,00 0, ,00 Pullets pcs ,00 4, ,00 Placement of pullets costs ,00 - litter amortization maintenance interest Labour cost 1 worker 12,00 700, ,00 Other variable costs ,00 - electricity cleaning material packaging ,00 0,13 - protective clothes General costs ,00 TOTAL COSTS ,00
13 Production costs structure-aviary Other variable costs 18% General costs 5% Labour cost 3% Hen feed 45% Placement of pullets 14% Pullets 15%
14 Profit and loss account PRODUCTION COSTS STRUCTURE - CAGES Description Quantity Unit price ( ) Total ( ) Hen feed kg/egg sold 0, ,00 0, ,00 Pullets pcs ,00 4, ,00 Placement of pullets costs ,00 - litter 0,00 - amortization maintenance interest Labour cost 1 worker 12,00 350, ,00 Other variable costs ,00 - electricity cleaning material packaging ,00 0,13 - protective clothes General costs ,00 TOTAL COSTS ,00
15 Production costs structure -cages Other variable costs 20% General costs 6% Labour cost 1% Hen feed 48% Placement of pullets 10% Pullets 15%
16 Cost difference aviary vs. cages AVIARY CAGES DIFFERENCE TOTAL COSTS ( ) , , ,00 2, /hen higher production costs in aviary
17 Profit and loss account AVIARY CAGES TOTAL INCOME , ,00 TOTAL COSTS , ,00 GROSS PROFIT , ,00 TAX 20% 2.677, ,00 NET PROFIT , ,00 ACCUMULATION , ,00 47,83 % >
18 Investment profitability (10 years of business, 6% discount rate) AVIARY PRESENT VALUE OF NET INFLOWS RETURN ON INVESTMENT 0,02 1,00 PAYBACK PERIOD 10 years 6 years INTERNAL RATE OF RETURN 6,29 % 22,55 % BREAK EVEN POINT 80% 40% What aviary egg salespriceis acceptablefor investors? CAGES
19 Increasing aviary egg sales price for 20% (0,12 ) AVIARY PRESENT VALUE OF NET INFLOWS RETURN ON INVESTMENT 0,91 PAYBACK PERIOD 6 years INTERNAL RATE OF RETURN 21,19 % Difference in profitability between aviary and cages needs to be recovered from the higher egg prices for eggs from aviary compared with cage eggs. In general, eggs from non-cage systems are sold at higher prices than eggs from cage systems. And in Croatia?
20 Informing consumers For egg producers in Croatia it is hard to achieve higher egg sales price for eggs that come from aviary compared to cage eggs Consumers are not well informed on different ways of keeping laying hens. By buying cage free eggs they can contribute to hen welfare.
21 Informing consumers Educational brochures have to reach final consumers.
22 Proposals to encourage investing in cage free systems To encourage producers to invest in cage free systems on consumer price sensitive Croatian market all parties involved in hen welfare have to work together with government authorities If higher egg price for cage free eggs can not be achieved on the market, state authorities should consider to support this kind of production (tax relief, subsidies -> Rural development program?)
23 Cage-free farming is better for everyone. We have a responsibility to treat the animals that produce our food in a humane and decent way. (WSPA) Buy cage-free eggs, every time and encourage others to do so(wspa)
24
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