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Farm Profit Tracker

Track income and variable costs per enterprise across a season, to see gross margin per hectare and which crops actually pay.

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Finance

Farm Profit Tracker

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Gross margin

Maize on 4.2 ha: income 1,260,000 less variable costs 742,000 gives a gross margin of 518,000, or 123,300 per hectare — ahead of the vegetable block per hectare, behind it per litre of water.

How the Farm Profit Tracker works

  1. Record income and variable costs separately per enterprise, not as a whole-farm total.
  2. Divide by area to get gross margin per hectare, which is what makes enterprises comparable.
  3. Compare against your limiting resource — per hectare where land is scarce, per unit of water or labour where those bind instead.

The method

Gross margin is income less variable costs, before fixed costs, which is what makes it comparable between enterprises on the same farm.

gross margin = output value − variable costs; then divide by the limiting resource

Per hectare is the usual denominator, but if irrigation water or seasonal labour is what constrains you, margin per unit of that resource is the number that should drive decisions.

FAQ

Why gross margin rather than net profit?

Because fixed costs — machinery, rent, permanent labour — are shared across the whole farm and allocating them between enterprises is arbitrary. Gross margin compares enterprises fairly; net profit answers a whole-farm question.

What counts as a variable cost?

Costs that change with the area or scale of that enterprise: seed, fertiliser, sprays, casual labour, contract operations. The tractor payment is fixed even though it feels variable at harvest.

Should I always maximise margin per hectare?

Only if land is your binding constraint. Where irrigation water, labour at a specific week, or capital is scarcer than land, margin per unit of that resource is the right measure.

How we compare

FeatureOnline Tool StoreA spreadsheetAn advisor consultation
Per-enterprise margins Whole farmYes
Limiting resource comparison Sometimes
No accounting subscription
Figures stay local

Farm Profit Tracker compares gross margin against your limiting resource, since margin per hectare is the wrong measure when water or labour is what binds.

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