1. Gross Margin Analysis An essential tool for comparing returns from agricultural inputs Simon Leake BScAg(HonsI) Principal: Sydney Environmental and Soil Laboratory

2. Product (crop yield) vs Input Typically a polynomial curve- Return Input Rising rate with moderate input Diminishing return at higher inputs Flat response at low Inputs

3. “Ideal” compost yield curve

4. Gross Margin on Agrichar Using data from NSW DPI - zero char gave 1.2g/pot grass yield - 10t/ha gave 1.6g/pot grass yield - interpolate other points - set max yield at 11.7t/ha of grass - set cost of Agrichar at $70/t spread

5. Gross Margin Analysis for Grass fed beef using Agrichar Agrichar t/haGrass yield t/ha/annum Beef @ $2/kg 20%fce Gross Margin $/ha 07.5$ 2,986 27.9$ 3,160$ 3,020 58.7$ 3,464$3,114 1010.0$ 4,004$3,304 1511.1$ 4,456$ 3,406 2011.7$ 4,671$ 3,271

6. Gross Margin vs Input Rate

7. NPK Fertiliser Gross Margins at $1000/t spread NPK kg/haBeef at $2/kg lw (20% fce) Gross Margin @ $1000/tonne 0$ 2,986 60$ 3,160$ 3,100 150$ 3,464$ 3,313 300$ 4,004$ 3,704 450$ 4,456$ 4,006 600$ 4,674$ 4,071

8. Compare the two farm inputs

9. Analyse the price of Agrichar

10. Conclusions Using this yield increment curve the nil return cost for Agrichar is $100/tonne spread Using the same yield increment curve shape NPK fertiliser has a significantly higher gross margin return These yield curves are theoretical and the conclusions illustrative only

11. What is needed? Good incremental yield curve experiments Understand why Agrichar can increase yield (liming value, potassium content what?) Include a greater range of combinations eg compost, agrichar, fertiliser combinations looking for synergistic effects Use a range of soil types and combinations Gross margin analysis based on real data Compare alternative systems eg compost, green manure cropping

12. Remember Farmers run businesses, base your claims on things relevant to their business. Forget the warm glow stuff this has a narrow appeal only. The modern farmer will believe good trial data and buy products that give genuine positive returns. Public extension officers will only endorse genuine products giving positive returns.