Most of the agri benchmark farm-level calculations are done on a per unit basis, for example per kg beef produced, per ton of wheat produced. However, with the tools it is possible to select any other reference unit for the results, for example per ha, per animal, per enterprise and other.
The reasons for a per-unit analysis are:
As farm data are collected on whole-farm level, a major task for enterprise and per-unit output analysis is to allocate/assign
a) overhead costs and whole-farm returns to the enterprises (for example cash crop, beef finishing, and cow-calf), and
b) overhead costs and whole-farm returns allocated/assigned to the enterprise to single crops (for example, wheat, rapeseed) or to groups of animals (finishing groups, calving periods) which usually have different resource and input requirements within the enterprises.
Before making a choice for a certain method to allocate costs and returns the following questions should be answered:
The discussion about these questions is ongoing. However, a lot of experience has been gained about the pros and cons of different methods over time. Based on this experience and the fact that we are talking about a world-wide scope of analysis, conclusions were drawn on the procedures which are outlined below.
1. As many cost positions as possible are treated as variable and output related. This means that their values change automatically with the changes in the size of the operation. Examples: Contractor costs for harvesting cereals or forage crops should not be specified as fixed costs on whole farm level but as variable costs per ha.
2. As many production factors (land use, labour and capital requirements) as possible are allocated to the enterprises during data input instead of being allocated from whole farm level later with one of the allocation factors described below.
3. All remaining overhead and whole-farm cost are allocated according to:
The model and the cost analysis tools allow various options to handle the cost allocation – from manual to semi-automatic (based on enterprise codes for production factors) and a mixture of both. The semi-automatic cost allocation based on return shares is the most common method presently used.
For details on tools used see the tools section and the training file on cost allocation for beef (Download pdf-Document, 318 kb).
