Sell production

[Perlimpimpin]

Hello,

Here in Europe, many farmer complain about their low profit.
I would like to understand why they are not making correct profit.

Is it because a middle-men takes a big part of the profit ?


Thank u

 

[br jones]

Hello,

Here in Europe, many farmer complain about their low profit.
I would like to understand why they are not making correct profit.

Is it because a middle-men takes a big part of the profit ?


Thank u

Now there is a question ,

 

[Nearly]

Basically.....Yes.
Old rule of thirds.
1/3 for producer,
1/3 for processor,
1/3 for retailer.
But that's 1/3 of the revenue each not 1/3 of the profit, risk or time each.

 

[farmerm]

Supply and costs of production too high, demand for the product too low.

 

[Perlimpimpin]

Supply and costs of production too high, demand for the product too low.

Thanks for the return.

What is the main costs of production please ?

 

[Derrick Hughes]

Farmers profit has come from subsidies for as long as I can remember so the have been happy to produce food at a loss that is slowly ending that's why some may be in trouble

 

[farmerm]

depends what you are producing.... crops, milk, meat, fruit, veg...
rent, fertiliser, feed, labour, fuel, machinery, crop protection chemicals....

 

[farmerm]

Farmers profit has come from subsidies for as long as I can remember so the have been happy to produce food at a loss that is slowly ending that's why some may be in trouble

I don't imagine anyone has been happy to produce food at a loss.. If producers are not going to be able to continue to make some kind of living without subsidies there will not be much forage trading in a few years time....

 

[Lowland1]

Basically.....Yes.
Old rule of thirds.
1/3 for producer,
1/3 for processor,
1/3 for retailer.
But that's 1/3 of the revenue each not 1/3 of the profit, risk or time each.

I'd take 33% any day we get about 12% of the retail for our veg. The supermarkets are thieves but we can't do without them

 

[Derrick Hughes]

Farming for sub , profit goes out the window .but sub farming is coming to an end . Some may be in trouble

 

[farmerm]

I'd take 33% any day we get about 12% of the retail for our veg. The supermarkets are thieves but we can't do without them

I think if you look at the numbers supermarkets operate on a margin below 5% of turnover, not many farmers would remain in business if they had to turn over £400,000 in order to be able to draw £20,000

 

[Beowulf]

I think if you look at the numbers supermarkets operate on a margin below 5% of turnover, not many farmers would remain in business if they had to turn over £400,000 in order to be able to draw £20,000

Anyone who thinks the supermarkets are making a killing is kidding themselves. It's a cut-throat business, and the rates bill on a typical supermarket site is probably many times the profit of an average well-performing farmer. That's before you get to the salaries, cost of powering all those chillers and freezers, the head-office costs etc.

 

[Lowland1]

I think if you look at the numbers supermarkets operate on a margin below 5% of turnover, not many farmers would remain in business if they had to turn over £400,000 in order to be able to draw £20,000

Yep it's all about economies of scale. Whenever I deal with a supermarket they tell me I should be more efficient unfortunately they don't listen to their own advice

 

[farmerm]

Farming for sub , profit goes out the window .but sub farming is coming to an end . Some may be in trouble

I would guess at least 2/3 of your customers have an income that is less than their BPS. As a rough idea I reckon I need to find £45 a lamb and £40 a Tonne on cereals in extra revenue or reduced costs in order to replace the value of BPS.

 

[farmerm]

Yep it's all about economies of scale. Whenever I deal with a supermarket they tell me I should be more efficient unfortunately they don't listen to their own advice

There are economies of scale and there are negative economies of scale... Scale can bring about buying power and cost savings but it can also bring about massive inefficiencies and waste.

 

[Derrick Hughes]

I don't imagine anyone has been happy to produce food at a loss.. If producers are not going to be able to continue to make some kind of living without subsidies there will not be much forage trading in a few years time....

Farmers are in business to make a profit .in the past that profit came from sub . That's how it was .nothing we could do about it

 

[farmerm]

Farmers are in business to make a profit .in the past that profit came from sub . That's how it was .nothing we could do about it

What will your customers do to replace the profit that will no longer come from the sub? Cut costs and not buy in forage?

 

[Derrick Hughes]

What will your customers do to replace the profit that will no longer come from the sub? Cut costs and not buy in forage?

Sheep farmers dont buy much fodder do they

 

[steveR]

Sheep farmers dont buy much fodder do they

If it goes tits up, they wont be buying anything I suspect!!

 

[steveR]

Yep it's all about economies of scale. Whenever I deal with a supermarket they tell me I should be more efficient unfortunately they don't listen to their own advice

Well, I think it is generally accepted in the farming community, that subs/support payments are made to allow below cost of production on foodstuffs, thereby subsidising Supermarkets to sell "cheap" food to the masses...