Agricultural production costs in the Netherlands

Production costs in the Netherlands of: potatoes, onions, carrots and cauliflower

Agricultural University of Wageningen, in the Netherlands

Surprisingly these figures don't exist for the Dutch farmers, the professionals at the Dutch Ministry of Agriculture, or at the University of Agriculture in Wageningen.

Institute of Applied Plant Research in Lelystad.

At the Institute of Applied Plant Research in Wageningen and Lelystad we were explained why it is impossible to calculate the production costs of potatoes, onions, carrots and cauliflower. The reason is that every 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.

Various crops in the Netherlands from the air. Croprotation at its best.

Working a great variety of different crops also means that Dutch farmers don't invest in highly specialized planting and harvesting equipment. The planting and harvesting of their crops is outsourced to specialized companies. These companies do nothing else than planting and harvesting all over the Netherlands and often all over Europe, moving from North to South and visa versa according local climate conditions.

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:

• A globally appreciated quality.
• A globally competitive price and
• 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.

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, the costs of the outsourced planting and harvesting and.... his own income!

For an example of these calculations have a look the case for: onions.

Production figures, prices, costs and innovations of the Dutch potato Business, can be downloaded here.

Typical Dutch farmhouses from all over the Netherlands.

A Dutch farm

A Dutch farm

A Dutch farm

A Dutch farm

A Dutch farm

A Dutch farm

A Dutch farm

A Dutch farm

A Dutch farm

All this is possible tanks to a great part of the strict implementation of crop rotation.

From the air it looks like this. And again the intense discipline in crop rotation is noticeable.