Production Costs in the Netherlands
potatoes, onions, carrots and cauliflower
What are the production costs of potatoes, onions, carrots and cauliflower in the Netherlands?
At the Institue of Applied Plant Research in Wageningen en Lelystad we were explained why it is impossible to calculate the production costs of potatoes, onions, carrots and cauliflower. The reason is that very farmer in the Netherlands works with various crops at the same time. Working various crops at the same time gives the producer a lot of flexibility to choose every year a coherent package of different crops. The crops rotate according very strict rules laid down by the Ministry of Agriculture. Not only the rules are very strict but are enforced in a very strict and well organized way. This enforcement is not only done by governmental institutions but also by private organizations owned by the producers. And this is the reason that every farm functions totally different and there for the production costs per crop cannot be calculated.
Through this strict implementation of Crop Rotation rules the Dutch farmer dedicates nearly as much knowledge and care to every crop as to the maintenance and quality of his soil. And probably this is the defining reason why the Netherlands is the biggest exporter in the world of onions, potatoes and many other agricultural products, without mentioning its Dairy Products. To be the biggest exporter in the World of a product you have to have: 1) A Globally appreciated Quality. 2) A Globally competitive price and 3) A Global availability of the product.
Despite the fact they don't calculate their production costs every producer knows very well what they are.
How do they calculate the costs and what do they calculate?
One figure is very well known. And that is the price the farmer or producer receives per kg of a product sold. The reason is that this is, very efficiently, checked by the Dutch tax authorities. (The Dutch Tax Authority is probably even more efficient than the Dutch Ministry of Agriculture).
In the table below the average price of potatoes, onions, carrots and cauliflower that the Dutch farmers have received over the last 5 years. Also included in these prices is the storage costs for 5 months and the delivery of the product.
|Average price de|
over the last 5 years.
Exchange rate: € 1 = $ 1,2 which is the average exchange rate over the last 5 years.
These prices are the basis to calculate the balance (the amount left over) after deducting all directly to the crop applicable costs.
From this balance the farmer has to pay his equipment and his own income.
For an example of these calculations have a look the case for: onions.