Weighing Up the Risk Versus Economic Benefits of Using Farm Saved Seed
By Sensako
Given that quality high performing seed is fundamental to any successful farming operation we believe that it is important to weight up the risk against the economic benefits of using farm saved seed.
Logic dictates that a grain producer will incur input costs in producing his Farm Saved Seed as well as an opportunity cost by not selling it as grain. This means that the economic benefit of using Farm Saved Seed is limited to the profit margin on the grain used as seed. Said differently, if seed represents say 5% of input costs and the gross margin on a farmer’s grain production is 25%, then economic benefit is limited to 25% of 5% = 1.25%.
It is clear that the use of Farm Saved Seed is inherently riskier than using Commercial Certified Seed. Using the above example, the question is therefore, “Does a 1.25% economic benefit justify the riskier use Farm Saved Seed?”
To assist in calculating the economic benefit of Farm Saved Seed, the spreadsheets below identify and unpack the Farm Saved Seed variables and costs. Once done, we advise that the risk associated with using Farm Saved Seed should be weighed against the calculated economic benefit.
Click on links below to download the spreadsheet for your area
The spreadsheet will be downloaded to your computer and not open in a separate window.
Please note that the yellow shaded cells in the spreadsheets represent variable costs and only these can be changed.
Farm Saved Seed Cost Benefit Analysis Free State
Farm Saved Seed Cost Benefit Analysis W.Cape
Farm Saved Seed Cost Benefit Analysis N.Cape
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