Farm management notes no. 7

Abstract

Gross Margin per acre equals the gross revenue less direct costs. It is therefore the amount contributed by the enterprise to the meeting of costs which are fixed in the short term and to profit. In the following Gross Margin calculations, yield and price have been varied to show the effect, of variation of these two parameters on the relative profitability of any particular enterprise. Gross Margins can be thought of as mechanical guides to short term planning and budgeting. They do not take into account such basic considerations as the husbandries, labour and machinery availability, personal preferences, risk and uncertainty etc.