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Gross Margin Per Acre Calculator

Work out gross margin per acre instantly with clear inputs, formula shown and shareable results.

About Gross Margin Per Acre Calculator

Gross margin is revenue minus variable cost and is the right measure for comparing crops on the same land, because fixed costs are unchanged by the choice. Straw, stover and other by-product income belongs in revenue. A benefit-cost ratio below about 1.5 leaves little buffer for a bad season.

Formulas

Gross margin

Gross margin = yield x price + by-product income - variable cost

Benefit-cost ratio

BCR = gross revenue / variable cost

Worked example

With the default values below, Gross Margin Per Acre Calculator returns Gross Margin Per Acre of $30,500.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Yieldminimum 0 t/acre
2 t/acre
Priceminimum 0 per tonne
25,000 per tonne
Variable Costminimum 0 per acre
22,000 per acre
By-Product Incomeminimum 0 per acre
2,500 per acre

Results

Gross Margin Per Acre
$30,500.00
Gross Revenue Per Acre
$52,500.00
Benefit-Cost Ratio
2.386
Margin On Revenue
58.10%

Step by step

  1. 1Values used
  2. 2Gross margin
  3. 3Benefit-cost ratio
  4. 4Gross Margin Per Acre= 30,500.00
  5. 5Gross Revenue Per Acre= 52,500.00
  6. 6Benefit-Cost Ratio= 2.386
  7. 7Margin On Revenue= 58.10

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why not use net profit to compare crops?

Allocating fixed costs such as land, buildings and machinery ownership between crops is arbitrary. Gross margin isolates the decision that is actually being made.

What counts as a variable cost?

Anything that changes with the crop or area grown: seed, fertiliser, chemicals, casual labour, fuel, contract operations, irrigation power and marketing charges.

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