Why is crop costing so important?

Farmers and agricultural businesses need to determine the financial feasibility of growing certain crops. Crop costing allows you to calculate the costs of production, such as seed, fertiliser, labour, and equipment. This information is then compared to the expected revenue from the sale of the crop. This information is crucial for making informed decisions about crop selection, budgeting, and pricing. Accurate crop costing can also help you identify areas where you can reduce costs and increase profits. 

Variable costs 

Prices of stock, fuel, and everything outside your control, is classed as a variable cost. Without using a crop costing model, you won’t have an idea of how much each plant is costing you, and how much you should be charging. If prices increase, how much more should you charge to maintain a consistent profit? Variable costs include, seeds, fertiliser, fuel, pesticides, and most consumables involved in crop growing.  

Part of precision agriculture 

A farm management concept that uses technology to optimize crop production and reduce costs, precision agriculture, or precision farming, needs crop costing in order to work. You need to know all your costs in order to be more precise, otherwise how will you know where to reduce costs? Precision farming is all about integrating different technologies and farming models, in order to become more profitable.  

Better negotiating power 

When you know exactly how much it costs you to grow a certain crop, you can use this to get better contracts from your clients. Supermarkets are known to negotiate farmers down severely, to the point where the profit margins are razor thin. When you are negotiating, they may want to see evidence of your cost per crop. If you can accurately demonstrate the cost to you, you are better positioned to make more profit. 

It doesn’t matter what your motivations are, crop costing is a key metric you should be introducing into your farm analysis. The difficult part is pulling the data from all the different spreadsheets and software you might use. Live Farmer is designed to be the all-in-one solution, that does all the crop costing for you, in an easy-to-understand report. 

LiveFarmer; automated crop costings 

LiveFarmer is a software platform that uses data and artificial intelligence to automate crop costing for farmers. The platform collects data on various factors that affect crop production, such as soil quality, and seed costs. It then uses this data to generate detailed cost estimates for each crop and field, taking into account things like labour costs, fertiliser, pesticide, and equipment usage. This allows farmers to more accurately budget for their crop production and make more informed decisions about which crops to grow and how to manage them. LiveFarmer can be integrated with other farming equipment and software such as tractors, yield monitors, and precision ag tools to provide more accurate and up-to-date data for cost estimation.