The role of efficiency in the profitability of table egg production in Hungary

Szőllősi, László

Keywords: technological factors, physical efficiency, deterministic model, profitability, competitiveness

The Hungarian egg industry was the loser from Hungary’s accession to the EU. Over the past nine years the number of laying hens producing table eggs and consequently egg production fell by 30%. In the Hungarian market 25-30% of shell eggs come from imports. The producer prices compared with the high input prices are constantly low, except in 2012. The objective of this study is to determine the cost and income situation of egg production in relation to different production levels in Hungary for 2012 based on technological data.
According to statistics, Hungarian table egg production was on average loss-making in 2012. However, besides average technological parameters and physical efficiency in professional aspects, production can be profitable and competitive. As the results demonstrate, it is not worth sparing on neither the level of technology nor the quality of inputs (pullet and feed). Based on economic results, the more expensive and modern technology, the more expensive, but better feed and pullet in the quality of ingredients and other criteria can give multiple returns due to the better physical efficiency. In our opinion the key objective of future developments should be increasing efficiency, since this is needed for raising profitability and competitiveness. All the required constituents are available on the market (technology, expertise, etc.), thus it is not impossible to achieve. In order to reach these goals, a certain amount of capital and innovative farmer attitude are required. Moreover, plants operating with weaker efficiency are more susceptible to negative effects originating from the fluctuation of input-output prices. That is, weaker technical efficiency makes the business more sensitive to the fluctuation of input-output prices. So, I highlight the importance of physical efficiency regarding the profitability of table egg production.

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