The Farm Metric Most People Ignore

Added: 2026-05-05

[00:00:00]Are you sure you're not a hobby farmer?

[00:00:02]If you don't know your gross margins, I'd argue you are. Let's fix that. As an agricultural advisor, I see this all the time, where farmers work incredibly hard, but they don't actually know which crops are costing them the most money to grow, and which ones are actually making them money. But using gross margins makes things clear and simple. And a gross margin is simply output minus variable cost equals gross margin. Here is an example I've put together for you.

[00:00:28]And if you don't know your gross margins, you don't know which enterprise is making you money, you don't know what inputs are draining your margins, and you don't know whether yield is going to increase your profitability. I've seen plenty of farms who increase their yields, but still make a loss, because their cost structure was the real problem. Farming isn't just about how much you can produce, it's about profit per hectare, not pride per hectare. If you don't measure your margins, you're guessing, and guessing is a very expensive game to play. If you want, I'll quickly break down how to calculate gross margins for every farm enterprise.

[00:01:05]If that interests you, follow me for more.