There is a huge and growing market in the world for certified organic food. The Australian Organic Market Report 2014 estimated the total value of the Australian certified organic industry to be $1.72 billion.
Despite the rapid growth in demand, the major challenge for the industry remains to be the consistent supply of product. With the recent fluctuations in many commodity based agricultural industries, organic certification is becoming an attractive advantage in business.
Many of the early growers that converted to organic did so for non-financial reasons, however, more recently conversion decisions are also based on financial gains and sustainable business models.
Organic farming is expanding in all sectors and Government and Industry are working together to support all level of operations in this unique sector.
Gross margin is defined as the difference between revenue and cost of goods sold, divided by revenue, and expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold. Gross Margin is a % value that indicates a profit margin for a specific product.
The following tools which are found on the Farm Business Planning Tools
web page under (Gross Margin Analysis spreadsheets) may assist you to make better informed decisions around the potential profit of your business when considering conversion to organic farming.
Organic Feed Grains and Dairy Gross Margin report;
Gross Margin spreadsheets for Organic Dairy - both Conversion and Green Field Site Development; and
Gross Margin spreadsheet for Organic Grain (wheat and barley).
Please note: Before using the Gross Margin Analysis Tools users are advised to read the disclaimer.