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Gross margins livestock farming substantially above long-term average

29/03/2023

The new year starts strong for most livestock farming sectors. As a result, the monthly gross margins for all sectors in January 2023 are significantly higher than in the same month last year. This is mainly due to revenue increases resulting from price increases for free-range eggs, broilers, fattening pigs, slaughter sows and milk compared to a year earlier. The sector still has to deal with significantly higher feed costs in January 2023.

The gross margins of the standardised dairy farm comes to 33,380 euros in January 2023. These margins are 41% higher than the same month of the previous year and 71% above the long-term average for this month. Compared to December 2022, however, the gross margins and the milk price have fallen. Throughout 2022, the milk price increased from 44 euros per 100 kg to 63 euros (54% above the ten-year average). Against this high milk price, the allocated costs in dairy farming have never been so high.

The gross margins for laying hens in January 2023 has increased substantially to nearly 115,000 euros per farm. That is thirteen times higher than in January of last year, mainly thanks to a very strong price increase of free-range eggs to 2.36 euros per kg in January 2023. The gross margins are therefore well over 91,000 euros higher than the long-term average of 2013-2022. The contract price of meat chickens in January 2023 is 28% higher than in the same period in the previous year. The gross margins for broilers rose, partly as a result of the higher contract price, to 42,400 euros per company. The gross margins are consequently twice as high as the long-term average.

The gross margins for fattening pigs in January 2023 are higher than the same month in 2022. Compared to a year earlier, the margins increased by 3,100 euros. This is thanks to the higher yields which increased slightly more than the costs of feed and piglets. However, the yields in January are still not sufficient to cover the fixed costs, resulting in a negative income. The cumulative annual gross margins for pigs in January are 95,000 euros below the long-term average. The cumulative annual gross margins therefore amount to 35 euros per pig per year, well below the long-term average of 75 euros.

In January 2023, the gross margins for sow farming are almost 80,000 euros higher than in January last year, mainly due to a sharp increase in yields. The monthly gross margins are three-quarters above the long-term average of 2013-2022. The other costs are also covered by the yields, resulting in a positive income. The price for piglets in January has more than doubled to 68 euros (including surcharges) and is 22 euros higher than the long-term average 2013-2022. The cumulative annual gross margins for sows in January 2023 are still below the long-term average. Thanks to the recovery in the past few months, the year-on-year gross margins in January came out at 280 euros per sow, compared to a long-term average of 490 euros per sow.

In November 2022, the gross margins for sow farming were 47,000 euros higher than during the same month of the previous year. This is because revenues have risen more than costs. The margins of 17,000 euros were still a quarter below the long-term average of 2012-2021, however. Following the higher fattening pig price, the price of slaughter sows in November is also considerably higher than last year and is 27% above the long-term average. In November, the rolling annual gross margins forsow farming amounted to 91 euros per sow, against a long-term average of 504 euros per sow.

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