1. CropsProfit Help Centre
  2. CropsProfit Methodology

How do I decide what the level of my Profit Goals should be?

  • Setting accurate levels for your Profit Goals by looking at your historic profits is important, then CropsProfit can meaningfully guide you to improve your profitability. This is especially true the first time you start using CropsProfit.
  • Profit Goals are the net profits you and your team want to achieve for each crop’s season. The Profit goals are expressed per area unit e.g. hectare, acre,...

► Get the help of your accountant or other expert if you are not sure how to get your historical net profits.

► Net profit is the money left over after paying the total break-even cost for a season.

► The net profit percentage is the net profit divided by the total break-even cost for a season multiplied by 100.

► The total break-even cost includes all of a crop's costs for a season which can be broadly categorised as direct production costs, indirect production costs and foreign factor costs such as management, rent, interest, etc.

  • Your farm’s own historic profits for each crop type is important. It is dangerous to just guess, copy your neighbour or use an industry standard.
  • By setting a crop’s Profit Goals according to your historic profits, CropsProfit can create real value by realistically guiding you to success.
  • Your Lowest Profit Goal is the minimum net profit (compared to your historic profits) you are prepared to make before you start selling some of a crop.  
  • Your Ideal Profit Goal is the profit you will be happy to sell your crop for (compared to your historic profits) over the long term.
  • It is very important that you understand and be comfortable with the levels of your Profit Goals. To gain more confidence you can also test the levels of your Profit Goals on CropsProfit by creating historical seasons with your own total break-even costs and other data.