Net profit: what remains after all farm costs
Net profit is the farm income left after you deduct all costs, including feed, labour, veterinary care, depreciation and interest. It shows whether the farm, or a particular enterprise, has covered its costs and made a profit over the season.
How does net profit differ from gross margin?
Net profit includes all costs; gross margin deducts variable costs only. For example, annual milk and animal sales bring in 150,000 in local currency. Feed, labour, care and fixed costs total 110,000, leaving 40,000 net profit. Compare this with the previous year to see how the farm has performed.
Questions from the farm
Can a farm have a positive gross margin but still make a net loss?
Yes. Gross margin subtracts variable costs only. After you also deduct fixed costs, including labour, depreciation and interest, the farm may show a net loss.
How HerdMobile helps
Bring your animals, feed stocks and farm accounts together on your Android phone. HerdMobile keeps your daily work moving offline: record events, compare feed quantities and follow sales and payments in one place. Use your own feeds and herd information to prepare a ration, then keep a backup file under your control.
HerdMobile helps you keep track of farm income and expenses in one place, making it easier to check a season’s earnings against its costs. Include every cost and use the same approach each season so you can make useful comparisons over time and between animal groups.
