A cost of production computed once a year, in February, explains what happened. A cost of production computed continuously helps you decide. This page sets out the method AgriPower applies, item by item, with a worked example.
Agricultural cost of production is the sum of every charge incurred to produce, divided by a useful unit. Two units matter: the hectare, which lets you compare plots and judge a technical itinerary, and the kilo harvested, which alone can be compared against a selling price. Both come from the same data but tell different stories: a plot can be expensive per hectare and still be the most profitable per kilo because it yields heavily.
The difficulty is never the arithmetic. Any spreadsheet can divide. The difficulty is having, against each expense, the plot that consumed it. That attribution — and only that — separates a usable cost of production from a farm-wide average that says nothing in particular.
A farm that tracks its charges globally knows that it spent. A farm that tracks them per plot knows where it spent, and can act on the item that is drifting while the season is still running.
AgriPower never asks you to enter a cost. It consumes five flows of real events, already recorded for other reasons, and derives the charges from them. That is what keeps the number accurate without extra administrative work.
Direct charges raise no question: an hour spent on plot P07 belongs to P07. Indirect charges do, and that is where most calculations go wrong. The production manager's salary, the farm insurance, the amortisation of the irrigation reservoir: nothing says up front which share belongs to which plot.
Three keys cover most situations. Area spreads pro rata to hectares: simple, suited to land and insurance charges. Direct labour spreads pro rata to the hours already assigned: suited to supervision, which follows the teams. Output spreads pro rata to kilos harvested: suited to packing and logistics.
AgriPower makes you choose the key per family of charges, once, and then applies it consistently. The point is not to find the perfect key — there is none — but to keep a single one from season to season, so that comparisons stay valid.
Cost per hectare can be read from planting onwards and followed all season: it is the right indicator for judging a technical itinerary and arbitrating between two approaches. It does not depend on yield, so it does not move when the harvest disappoints.
Cost per kilo only exists once you harvest, and it moves with every weighing. It is the only figure comparable to a selling price, and therefore the only one that says whether a plot makes money. A plot at MAD 165,000/ha yielding 18 tonnes is cheaper per kilo than a plot at MAD 120,000/ha yielding 11.
In practice you follow both. Cost per hectare during establishment and upkeep, when there is nothing to weigh yet. Cost per kilo from the opening of the harvest, week after week, to see whether picking cost stays bearable as yield falls late in the season.
The cost engine runs continuously on data that is already there. There is no period close to trigger and no report to request: the cost shown corresponds to what was entered up to the previous evening.
Concretely, when a team leader clocks thirty pickers on plot P07 on a Monday morning, the cost of P07 is current by Monday afternoon. When the storekeeper issues four drums of fertiliser for a fertigation, the value of those drums is on the plot before the end of the day. That short latency is what makes the number useful: it lets you spot a drift after two weeks rather than after two seasons.
Four mistakes come up again and again, and they all have the same effect: a cost of production that is too low, and therefore a margin that is overstated.
The first is leaving out family labour or unpaid supervision. A farm that does not value its manager's time understates its cost by several points. The second is confusing cash outflow with charge: fertiliser paid for in January but used in April belongs to the April season, not the January one.
The third is ignoring the amortisation of plantings. A raspberry planting is expensive to establish and produces for several years: charging the whole establishment cost to the first season makes it artificially loss-making and the following ones artificially profitable. The fourth is working from gross rather than net planted area: alleys and headlands inflate the denominator and lower the cost per hectare for no good reason.
The example below is entirely invented. It exists only to show the shape of the calculation and the relative weight of each item; do not use it as a market reference.
| Item | Amount (MAD) | Share | Per hectare |
|---|---|---|---|
| Upkeep labour | 34,800 | 24% | 14,500 |
| Harvest labour | 26,600 | 18% | 11,083 |
| Inputs and fertigation | 28,400 | 20% | 11,833 |
| Water and energy | 10,500 | 7% | 4,375 |
| Machinery and upkeep | 9,200 | 6% | 3,833 |
| Packaging and transport | 12,300 | 9% | 5,125 |
| Planting amortisation | 14,700 | 10% | 6,125 |
| Allocated overheads | 8,100 | 6% | 3,375 |
| Total | 144,600 | 100% | 60,250 |
Continuously. The engine takes in every clock-in, every stock issue and every weighing as they are entered. There is no monthly close to trigger: the figure shown reflects the data entered up to the previous day.
No. AgriPower builds its own allocation from field operations. You can then export the data to reconcile it with your financial accounting, but the calculation does not depend on it.
The establishment cost of a planting is amortised over its expected productive life, which you set per variety. Each season receives the corresponding share, which avoids making the first year artificially loss-making.
Yes, but carefully. The most useful comparison is between plots of the same variety and the same planting age. AgriPower shows age and variety next to each cost to prevent misleading comparisons.
Clock-ins and weighings carry the date of the event, not the date of entry. A late upload retroactively corrects the cost of the period concerned, and the change stays visible in the history.
Yes, if you record the quantities rejected at the packhouse. The cost is then divided by marketable kilos, which is the only figure comparable to a selling price.
Tell us about your farm: we will show you how AgriPower builds your cost of production, from the plot to the kilo.
