{"id":25255,"date":"2023-10-25T15:59:47","date_gmt":"2023-10-25T15:59:47","guid":{"rendered":"https:\/\/prograin.ca\/ca\/?p=25255"},"modified":"2025-03-27T16:16:20","modified_gmt":"2025-03-27T16:16:20","slug":"calculate-your-cost-of-production-to-improve-your-profitability","status":"publish","type":"post","link":"https:\/\/prograin.ca\/ca\/en\/2023\/10\/25\/calculate-your-cost-of-production-to-improve-your-profitability\/","title":{"rendered":"Calculate your Cost of Production to Improve your Profitability"},"content":{"rendered":"\n<p>Calculate your Cost of Production (COP) makes it easier to understand and manage your business and can help with decision-making.<\/p>\n\n\n\n<p>According to a survey of Canadian producers, only <strong>65&nbsp;%<\/strong> of farms are likely to analyze their profitability; yet there is a noticeable trend towards indebtedness, higher interest rates, and overspending.<\/p>\n\n\n\n<h2>The benefits of calculating your COP<\/h2>\n\n\n\n<ul><li>Know your spending limits in order to maintain your break-even point;<\/li><li>Identify your fixed costs and determine whether they can be reduced;<\/li><li>Decide whether it is best to purchase or repair equipment;<\/li><li>Choose the right crop option for maximum profitability;<\/li><li>Evaluate your enterprise\u2019s potential for advancement;<\/li><li>Compare your profitability to that of other farming operations; <\/li><li>Make it easier to develop a grain marketing plan. <\/li><\/ul>\n\n\n\n<h2>The key elements<\/h2>\n\n\n\n<p><strong>Direct variable costs<\/strong><\/p>\n\n\n\n<p>In the case of soybean crops, direct variable costs can change from one plot to the next, depending on the variety and the soil needs; for instance, seed price, fertilizer and other crop protection costs (herbicide, insecticide\/fungicide).<\/p>\n\n\n\n<p><strong>Indirect variable costs<\/strong><\/p>\n\n\n\n<p>Indirect variable costs change according to the level of production (fuel, labour, and utility costs). A cost per acre must be determined and apportioned fairly among the different cultures.<\/p>\n\n\n\n<p><strong>Fixed costs<\/strong><\/p>\n\n\n\n<p>Fixed costs are constant costs that do not change. For example, the loan interest payments on a land purchase, insurance, property taxes, or recurrent payments on machinery.<\/p>\n\n\n\n<p>In mixed farming operations, such as soybeans and livestock, the fixed costs must be apportioned &nbsp;according to the activity sector. For example, the machinery-related expenditures must be calculated for both sectors, that is soybeans and livestock.<\/p>\n\n\n\n<p><strong>Net profit<\/strong><\/p>\n\n\n\n<p>To calculate the net profit, subtract the total revenue from all variable and fixed costs<\/p>\n\n\n\n<p><strong>Budget forecasting<\/strong><\/p>\n\n\n\n<p>To make predictions for the future, you should make budget projections. The trick is to draw on last year\u2019s figures for inspiration.<\/p>\n\n\n\n<h2>Comparative profitability of GMO vs non-GMO soybeans<\/h2>\n\n\n\n<p>Here is a sample comparison of the expenses associated with the phytosanitary treatment of GMO vs non-GMO soybeans:<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/prograin.ca\/ca\/en\/seeds\/gmo\/\">GMO<\/a><\/strong> : glyphosate used with a residual product; the cost of this treatment can run between $30 and $50 depending on the product that is used.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/prograin.ca\/ca\/en\/seeds\/conventional\/\">Non-GMO<\/a><\/strong> : A product is applied pre-emergence, followed by a 2<sup>nd<\/sup> pass post-emergence; the treatment cost can range between $70 and $100 depending on the products used.<\/p>\n\n\n\n<p>Notice that there is a difference of $40-$50 in the cost of weed control treatments for these two crop types.<\/p>\n\n\n\n<p>Use your own farm\u2019s figures to calculate your additional net margin with non-GMO soybeans.<\/p>\n\n\n\n<ul><li>Weed control costs are higher for non-GMO soybeans than for GMO soybeans, but the difference is offset by a premium that amounts to dollars-per-ton.<\/li><\/ul>\n\n\n\n<p>Finally, we recommend that you analyze the COP for your last 3 to 5 harvests. These calculations will help you determine what is profitable and what is not on your farm.<\/p>\n\n\n\n<p>We hope you enjoyed reading this article and that the advice it contains proves useful.<\/p>\n\n\n\n<p>Calculate your cost of production using the document available at&nbsp;: <a href=\"http:\/\/myprograinbenefits.ca\">DO THE MATH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Calculate your Cost of Production (COP) makes it easier to understand and manage your business and can help with decision-making. According to a survey of Canadian producers, only 65&nbsp;% of farms are likely to analyze their profitability; yet there is a noticeable trend towards indebtedness, higher interest rates, and overspending. The benefits of calculating your [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":25254,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":""},"categories":[15],"tags":[],"author_meta":{"display_name":"anouk","author_link":"https:\/\/prograin.ca\/ca\/author\/anouk\/"},"featured_img":"https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401-300x200.jpg","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.11 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Calculate your Cost of Production to Improve your Profitability - Prograin - Canada<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/prograin.ca\/ca\/en\/2023\/10\/25\/calculate-your-cost-of-production-to-improve-your-profitability\/\" \/>\n<meta property=\"og:locale\" content=\"fr_CA\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Calculate your Cost of Production to Improve your Profitability - Prograin - Canada\" \/>\n<meta property=\"og:description\" content=\"Calculate your Cost of Production (COP) makes it easier to understand and manage your business and can help with decision-making. According to a survey of Canadian producers, only 65&nbsp;% of farms are likely to analyze their profitability; yet there is a noticeable trend towards indebtedness, higher interest rates, and overspending. 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According to a survey of Canadian producers, only 65&nbsp;% of farms are likely to analyze their profitability; yet there is a noticeable trend towards indebtedness, higher interest rates, and overspending. The benefits of calculating your COP Know your spending limits in order to maintain your break-even point;Identify your fixed costs and determine whether they can be reduced;Decide whether it is best to purchase or repair equipment;Choose the right crop option for maximum profitability;Evaluate your enterprise\u2019s potential for advancement;Compare your profitability&hellip;<\/p>\n","category_list":"<a href=\"https:\/\/prograin.ca\/ca\/en\/category\/non-classe-en\/\" rel=\"category tag\">Non class\u00e9<\/a>","author_info":{"name":"anouk","url":"https:\/\/prograin.ca\/ca\/author\/anouk\/"},"comments_num":"0 comments","featured_image_urls_v2":{"full":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401.jpg",1253,835,false],"thumbnail":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401-150x150.jpg",150,150,true],"medium":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401-300x200.jpg",300,200,true],"medium_large":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401-768x512.jpg",768,512,true],"large":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401.jpg",1253,835,false],"1536x1536":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401.jpg",1253,835,false],"2048x2048":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401.jpg",1253,835,false],"menu-24x24":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401-24x16.jpg",24,16,true],"menu-36x36":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401-36x24.jpg",36,24,true],"menu-48x48":["https:\/\/prograin.ca\/app\/uploads\/sites\/3\/2022\/12\/Image1-e1670960067401-48x32.jpg",48,32,true]},"post_excerpt_stackable_v2":"<p>Calculate your Cost of Production (COP) makes it easier to understand and manage your business and can help with decision-making. According to a survey of Canadian producers, only 65&nbsp;% of farms are likely to analyze their profitability; yet there is a noticeable trend towards indebtedness, higher interest rates, and overspending. The benefits of calculating your COP Know your spending limits in order to maintain your break-even point;Identify your fixed costs and determine whether they can be reduced;Decide whether it is best to purchase or repair equipment;Choose the right crop option for maximum profitability;Evaluate your enterprise\u2019s potential for advancement;Compare your profitability&hellip;<\/p>\n","category_list_v2":"<a href=\"https:\/\/prograin.ca\/ca\/en\/category\/non-classe-en\/\" rel=\"category tag\">Non class\u00e9<\/a>","author_info_v2":{"name":"anouk","url":"https:\/\/prograin.ca\/ca\/author\/anouk\/"},"comments_num_v2":"0 comments","coauthors":[],"tax_additional":{"categories":{"linked":["<a href=\"https:\/\/prograin.ca\/ca\/en\/category\/non-classe-en\/\" class=\"advgb-post-tax-term\">Non class\u00e9<\/a>"],"unlinked":["<span class=\"advgb-post-tax-term\">Non class\u00e9<\/span>"]}},"comment_count":"0","relative_dates":{"created":"Posted 2 ann\u00e9es ago","modified":"Updated 1 ann\u00e9e ago"},"absolute_dates":{"created":"Posted on 25 octobre 2023","modified":"Updated on 27 mars 2025"},"absolute_dates_time":{"created":"Posted on 25 octobre 2023 15 h 59 min","modified":"Updated on 27 mars 2025 16 h 16 min"},"featured_img_caption":"","series_order":"","_links":{"self":[{"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/posts\/25255"}],"collection":[{"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/comments?post=25255"}],"version-history":[{"count":15,"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/posts\/25255\/revisions"}],"predecessor-version":[{"id":27421,"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/posts\/25255\/revisions\/27421"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/media\/25254"}],"wp:attachment":[{"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/media?parent=25255"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/categories?post=25255"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prograin.ca\/ca\/wp-json\/wp\/v2\/tags?post=25255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}