Soybean cultivation is a profitable business. Yes, but that is the smallest part of the whole story. How does soybean cultivation become profitable?
Today, we will give you the cost details of all the materials and activities for rain-fed soybean cultivation for one season. Then, we will provide you with the expected yield from cultivating one hectare per season.
Note: We provide financial estimates for cultivating a 1-hectare soybean farm below. 1 hectare = 2.5 acres
Read also: Good Soybean Production: A Comprehensive Farmer’s Guide
The cost of 1-hectare soybean cultivation
| No | Item | Quantity | Unit Cost | Total Cost |
|---|---|---|---|---|
| 1 | Materials | |||
| Land (rent/year) | 2.5 acres | 100.00 | 250.00 | |
| Seeds | 45 kg | 8.00 | 360.00 | |
| Fertilizer | 2.5 bag | 170.00 | 425.00 | |
| Pre-emergence herbicide | 15 litres | 25.00 | 375.00 | |
| Insecticide | 2.5 litres | 25.00 | 62.50 | |
| Sacks(Packaging) | 50 sacks | 2.50 | 125.00 | |
| Subtotal | 1,597.50 | |||
| 2 | Labour | |||
| Land clearing | 7.5 man-days | 20.00 | 150.00 | |
| Ploughing | 2.5 man-days | 100.00 | 250.00 | |
| Sowing | 2.5 man-days | 50.00 | 125.00 | |
| Fertilizer application | 2.5 man-days | 50.00 | 125.00 | |
| Weedicide application | 2.5 man-days | 60.00 | 150.00 | |
| Weeding (manual) | 2.5 man-days | 100.00 | 250.00 | |
| Harvesting | 2.5 man-days | 100.00 | 250.00 | |
| Threshing | 2.5 man-days | 50.00 | 125.00 | |
| Winnowing | 2.5 man-days | 30.00 | 75.00 | |
| Bagging | 2.5 man-days | 30.00 | 75.00 | |
| Subtotal | 1,575.00 | |||
| 3 | Transportation | 250.00 | ||
| Total | 3,422.50 |
GHS 1.00 = USD 0.16519 (oanda)
Read also: Soybean Harvesting, Storage, and Marketing – Best Practices
Benefits from 1-hectare soybean cultivation
| ASSUMPTIONS | PROFIT & LOSS ESTIMATES |
| Expected Average yield per hectare = 2500kg Less Post-harvest loss(expected) = 5% (2500 * 0.05) Yield for sales (expected) = 2450kg (49No. 50kg bags) Price per 50kg bag = GHS 120.00 Total number of 50kg bags = 49 | REVENUE 49 * 120 = GHS 5880.00 Less Cost = 5880 – 3422.50 P&L/hectare = GHS 2,457.50 |
All things being equal, the estimates indicate that soybean cultivation within a cultivation period of 4 months has the potential to yield a 72% return on investment (ROI). A key risk to this potential, however, is the unreliability of rain to provide ample irrigation. The most effective approach to guarantee profitability is with a fully irrigated process to improve yield.
On a larger scales costs like transportation, feeding, etc must be considered.
Note: The financials of a fully irrigated soybean farm will look much different. Irrigation is expected to add to the capital cost and improve yield significantly.
Read also: 8 Incredible Health Benefits of Soybean, Uses and Side Effects
Strategies to increase profit margin in soybean cultivation
- Adopt no-till technology where possible.
- Economics of scale: The cost of production reduces as the size of the farm increases.
- Adopt measures to reduce post-harvest losses.
- Understand the market and sell when prices are high.
