Do you know the con­tri­bu­tion mar­gins of your field crops?

The veg­e­ta­tion cycle is slow­ly but sure­ly com­ing to an end and that means oper­a­tions now have time to stop and take a deep breath again. It also means farm­ers will start reflect­ing on the year past and ask them­selves what they can do even bet­ter next year. They often like to pick up and read through their account­ing state­ments when doing so. Yet, is that real­ly enough when try­ing to make the right decisions?
Field with coin illustration

· “Which crop is more prof­itable for me? Win­ter wheat or grain maize?”
· “Was the late fer­til­i­sa­tion of the win­ter wheat worthwhile?”
· “How high are my pro­duc­tion costs for one hectare of potatoes?”

To answer these ques­tions, there is no way around the con­tri­bu­tion mar­gin. How­ev­er, doing cal­cu­la­tions by hand with a pen and paper or even in Excel is very time-consuming.

Diagram of contribution margin accounting for farming
In very sim­ple terms, the con­tri­bu­tion mar­gin is cal­cu­lat­ed based on the mar­ket per­for­mance of a pro­duc­tion process (e.g., win­ter wheat) less the asso­ci­at­ed vari­able costs. The mar­ket per­for­mance con­sists of the sales pro­ceeds. The vari­able costs pri­mar­i­ly con­sist of the oper­at­ing resources used for the pro­duc­tion. Thus, when doing cal­cu­la­tions by hand, all of the work pro­ce­dures have to be copied from the field map­ping ser­vice in order to deter­mine the costs. That is a lengthy process and is often the rea­son why account­ing state­ments tend to be used for busi­ness analy­ses instead.

Auto­mat­i­cal­ly cal­cu­late con­tri­bu­tion mar­gins with 365FarmNet.

As a 365FarmNet user, time-con­sum­ing con­tri­bu­tion mar­gin account­ing is now a thing of the past. By eas­i­ly doc­u­ment­ing your work using the 365Crop app on your smart­phone or our por­tal on your PC, almost all of your data and num­bers are already avail­able. All you have to do is enter the cost of your oper­at­ing resources and machin­ery. You can now view the con­tri­bu­tion mar­gins of all of your crops per field and per hectare.
Calculate contribution margin in the field map

What are you wait­ing for?
Main­tain a clear overview of your costs and rev­enues and start doc­u­ment­ing dig­i­tal­ly today!

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Make the right deci­sions in the future.

The con­tri­bu­tion mar­gin not only helps you review the com­plet­ed har­vest, but more impor­tant­ly, helps you plan your farm­ing operation.

“Bet­ter to plant win­ter wheat or grain maize?” – Nat­u­ral­ly, bal­anced crop rota­tion is essen­tial for main­tain­ing soil fer­til­i­ty. Nev­er­the­less, there is still a cer­tain amount of lee­way when it comes to opti­mis­ing crop rota­tion not just for the soil, but for your wal­let as well.

“Are the last 20 kg N of rape­seed worth it?” – As you know, max­i­mum yields do not nec­es­sar­i­ly mean max­i­mum prof­its. Use your resources effi­cient­ly with regard to the new Fer­tilis­er Ordi­nance. How about a com­par­i­son of the pro­duc­tion inten­si­ty? With the con­tri­bu­tion mar­gin account­ing in our por­tal, you can find out straight away which is more worthwhile!

“Are all of the areas I lease prof­itable?” – In recent years, lease prices have risen non-stop. Can you say with cer­tain­ty that you are achiev­ing a prof­it from all areas?

Stop rely­ing on gut feel­ing alone and start mak­ing the right deci­sions based on num­bers and facts. Reg­is­ter for free right now at 365FarmNet.

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Klaus-Her­bert Rolf
rolf@365farmnet.com