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Gross margins 1-Answers
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Variable costs Fixed costs fertiliser depreciation of farm vehicles & machinery baling twine permanent employee wages lucerne seed repairs to fences & farm roadways sprays for weed & pest control interest payments tractor & machinery maintenance council land rates water pumping costs taxation payments tractor & machinery fuel farm insurance & workers compensation cartage for permanent employees -
Income: Yield 3.5 tonnes/ha @ $125.50/tonne = $439.25 Variable Costs Tractor hours 2.2 hrs/ha @ $15.25/hr = $33.55 Implement repairs and maintenance 2.0hrs/ha @ $1.10/hr = $2.20 Water pumping cost 4.6ML/ha @ $8.00/ML = $36.80 Seed 68kg/ha @ $0.35/kg = 23.80 Fertilisers 70 kg super @ $395.00/tonne = 27.65 Sprays 1.75L/ha @ $19.20/L = 33.60 1.15L/ha @ $9.00/L = 10.35 Harvesting 0.5 hrs @ $140.00/hr = 70.00 Cartage Contract @ $9.00/tonne = 31.50 Total variable costs = 269.45
Income - Variable costs = 439.25 - 269.45 = $169.80
Gross margin = $169.80/ha -
Income: $ Wool sales 24,300 Lamb sales 90,000 Sale of cull ewes 900 Total income
115,000 Expenditure:
$ Shearing 10,000 Sheep husbandry costs 4,500 Causal labour - sheep 1,900 Crutching 2,400 Replacement ewes 18,000 Ram costs 750 Lamb sale commission 4,000 Wool cartage 180 Wool sale commission 2,800 Total variable costs 44,580
Gross margin = 115,000 - 44,580 = $70,620
Gross margin per ewe = $23.54 - To enable a valid comparison of the prime lamb production gross margin with the irrigated wheat gross margin, you would need to know what the stocking rate would be for the prime lamb production. This is generally given in dry sheep equivalent or DSE system.
- Any factors that affect the income and/or the variable costs would affect the final gross margin.
For irrigated wheat, the income would change if the yield or the price/tonne changed. If any of the variable costs changed, this would also affect the gross margin.
For prime lamb production, the income would change if the prices paid for wool and lambs changed, as well as poor season that reduced wool growth and/or lamb weaning percentages. Again, if any of the variable costs changed, this would also affect the gross margin. - The lowest yield and price has a gross margin of $3, while the highest yield and price has a gross margin of $975. There is a difference of $972 between these two gross margins.
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