Understanding your cost of production is the cornerstone of good businesses, and fundamentally, the reason many farming businesses are so heavily impacted by changes in the market.
Farm businesses have little influence on price. But have more influence on costs. Low cost systems can produce exceptional products and maintain a high standard of production while being resilient to market forces.
To understand your cost of production, use an enterprise costings exercise to help with the questions you want to answer.
SIMPLE SUMS:
Below is an example of cost of production in action.
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