Prepared by Cherie Dearle and Brad Riner
University of Sydney
Veggie-lovers is a 300ha property located in the Murrumbidgee region. It is a fully irrigated property with the ability to furrow, flood and sprinkler irrigate. The property has an annual water allocation of 1850ML, 1000ML being allocated to the autumn and winter months, while the remaining 850ML are allocated to the spring and summer months. The team of veggie-lovers include 2 full time employees, 2 part time employees and one casual employee, giving a total of 360 labour hours available each month.
Currently, Veggie-lovers runs a crop rotation of either processing sweet-corn or processing potatoes in the summer, …show more content…
The overdraft was set up as $45,000 with an interest rate of 3%. In this scenario, the optimal farm plan was 14.88ha of processing potatoes, 86.12ha of sweet-corn and 199ha of canola, giving a total gross margin of $223,125. This scenario used all available land and had an excess water allocation of 304ML in winter and 42ML in summer. Labour was again only limiting in the month of august, but in this case cash was only limiting in the month of August. This means that the farm would be able to cover all of their costs throughout the year with a $45,000 overdraft balance. The farm wouldn’t have to use any of the overdraft balance until July, but in August we would have to use all $45,000. If the farm were looking to expand in the years to come, it should try to generate more revenue in the month of July or August to limit the overdraft payment. This model shows that if the farm were to grow one hectare of faba beans, fresh potatoes, or barley it would decrease the total gross margin by $35.08, $530.76, or $533.09