Model saleable grades
Split volume by grade, channel, season, and realized farm-gate price. Include samples, rejects, returns, commissions, and payment delay.
Guide 21 / Farm economicsYield is not
Yield is not
the same as profit.
Model the business by saleable grades and market windows. High biological yield can still lose money when labor, rejects, freight, finance, or postharvest losses are underestimated.
Use local numbersReplace every generic assumption with current quotations, observed labor, buyer terms, and realistic pack-out.
01 / Cost and margin
Manage the marginCount the system.
Count the system.
Not just inputs.
Separate establishment investment from annual operation. Model cash timing as well as annual totals because the orchard incurs costs before mature revenue.
Build your own cost stack
Bar lengths indicate categories to investigate, not cost shares.
Before you plant, answer:
- 01Who buys each grade and at what seasonal price?
- 02How many harvest passes and pollination nights can labor cover?
- 03What proportion is realistically pack-out, not total yield?
- 04How will fruit be cooled, stored, packed, and transported?
- 05What happens under lower price, lower yield, or delayed bearing?
Business rule
Run a base case, a downside case, and a break-even case. Validate every assumption with local suppliers, growers, buyers, lenders, and regulators.
Stress-test peak labor
Night pollination and frequent harvest can overlap. Test whether trained labor, transport, cooling, and pack space handle peak weeks.
Price the bad year
Model lower set, delayed bearing, storm damage, trellis repair, buyer loss, input inflation, and debt service before committing capital.
Financial scenario calculator
Make assumptions visible.
Enter one consistent area unit and one consistent local currency. The model applies the same annual operating cost in every year and a transparent yield ramp of 0%, 20%, 55%, 80%, then 100% of mature field output from year five onward.
Establishment investment45,000
Mature annual revenue40,500
Mature operating margin25,500
Break-even realized price1.11
Cumulative cash at model end—
| Year | Yield ramp | Revenue | Annual cash change | Cumulative cash |
|---|
Interpretation: operating margin is revenue minus entered operating cost and overhead, not net profit. The estimate excludes financing, tax, depreciation, owner opportunity cost, working-capital timing, salvage value, and inflation unless represented in your entries. Estimates are scenarios, not promises.
This material is educational and is not a farm budget, investment recommendation, tax opinion, or lending assessment. Costs, prices, yields, regulations, and financing vary by place and time.