The economic performance of European livestock farming: From the "cost competitiveness" to the "non-cost competitiveness"

Abstract

The European Union (EU) has, since a long time, an important role in the international livestock industry chains, both in terms of production and trade. In spite of a strong restructuring movement, mainly due to factor productivity gains, European livestock brings together farms that are still very heterogeneous in terms of productive combinations, size, social structuring, intensification and economic performance. To report on it, and based on data issued from the Farm Accountancy Data Network (FADN), an analysis of the diversity of structural and economic situations is conducted for farms specializing in the production of milk, beef and pigs/poultry, for the ten most productive EU Member States in animal production. This stage is a prerequisite for reflection, which begins after on the main levers of the economic performance of European animal productions. Two types of levers are then distinguished. The first concerns "cost competitiveness". It successively discusses the substitutions between factors of production, the economies of scale, the geographical concentration of production, the structuring of sectors and the influence of agricultural policies. The second concerns “non-cost competitiveness”. It deals with the sanitary quality of animal productions, the differentiation of products and production processes, and the conditions for the capturing of added value induced by producers.