This week we will focus on farm gate returns and how they look for the 2016/17 crop compared to previous seasons. Obviously this year we are seeing much weaker pricing than recent years and for most growers much stronger yields. So the question is, are we any better off than last season for farm gate returns?? Below’s numbers are based off a $40/t farm gate adjustment which is roughly a grower 200km from port. Cost of production is $300/ha which is roughly what a grower in a medium rainfall zone would be looking at this year.
Chemical and fertiliser applications are up but fortunately prices and diesel are down. So based off these basic assumptions, if you were to grow last year 2t/ha with an average sales price at $290 FIS, you would be making $200/ha. This year to make the same $200/ha margins you would need to grow an additional 0.5t/ha with the prices $50 less ($240).