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The 2019 Farm Gross Margin Guide was produced and issued in February 2019, in both static (hardcopy/pdf) and editable (Excel) forms for cropping and livestock. The Gross Margin Guide incorporates the latest information on input and output pricing to give estimates of the relative profitability of different farm enterprises to assist growers in decision-making.

BACKGROUND

Gross margin analysis is an important planning tool when deciding on an appropriate enterprise mix. The Rural Solutions SA Farm Gross Margin Guide has been an important reference source for this process for many years.

A 2014 survey of South Australian growers by the GRDC showed 100 per cent used the previous Gross Margin guide in some way. The preferred format for the future was spreadsheets.

The guide was extended in 2016 to include an editable Excel version.

Start:

July 2014

Finish:

June 2020

Project participants

Rural Solutions SA: Brett Bartel and Simone Lawson.
Barry Mudge Consulting: Barry Mudge.
CKM Management Solutions: David Marriot.

The problem

Growers require up-to-date information on gross margins for decision-making.

The research

The Farm Gross Margin Guide was developed and distributed to growers in 2015, 2016, 2017, 2018 and 2019 and will be issued again in 2020.

More information

Erica Hancock
Rural Solutions SA
08 8568 6416
[email protected]

Research aims

The core objectives of the project were to:

  • Provide growers with a template to calculate their own gross margins using data relevant to their situation.
  • Provide the RD&E community with reference material to analyse their work for practical relevance to primary producers
  • In 2016, create an editable excel version, and in 2017, extend and upgrade the capability of the editable Excel version of the guide based on feedback from the 2016 version.
  • Distribute the guide in hardcopy and electronic form in a timely manner to assist growers with decisions around enterprise selection.

In the field

The project used the services of Barry Mudge (Barry Mudge Consulting) to update the technical content of the guide. Simone Lawson (Rural Solutions SA) was responsible for overall production coordination. David Marriot (CKM Management Solutions) provided the necessary expertise to develop the Excel editable version.

Independent agronomy advice is also sought each year to ensure the technical content of the guide remains accurate and representative of current best practice.

The initial work completed in 2016 on the Excel version of the cropping GM tool was extended and upgraded in 2017 based on feedback received from the industry. In addition, and using some supplementary project funding from the Grain & Graze 3 project, a livestock Excel version was produced.

Results

The guide was available by early February each year, prior to the new cropping season, with 1000 hard copies distributed at the GRDC Adelaide advisor updates, PIRSA offices, regional businesses and farming systems events.

Feedback on the spreadsheet version of the guide has been positive

Value for growers

Growers can access the guide, including the editable version, on the SAGIT website: 2019 Gross Margin Guide.