Wheat growing business

* The calculations use average data for the World 500 000 ₽

Minimum starting capital

28%

Profitability

14 months

Payback

200 thousand

Land lease per year (1000 ha)

Wheat is the most important agricultural crop in many countries, including Russia. Not only the most demanded of breads are baked from it, but also pasta and confectionery are made. However, today agriculture in the country cannot be called a highly developed industry. To the capricious natural conditions, we can add the policy of the state, which is not very eager to develop the agricultural sector of the economy. All these external threats stop many entrepreneurs who may and would like to engage in agriculture.

But where there are difficulties, the level of competition is always lower. And agriculture, regarded as food production, must satisfy the needs of a huge number of people, so there can be a lot of players in such a market. At the same time, farmers rarely compete, preferring even well-coordinated work to it. You can make money growing wheat, especially if you have work experience and / or knowledge of agriculture, while the urban person will have to study a lot of literature in order to know only in theory how to sow, germinate and harvest wheat. If an entrepreneur has not previously encountered agriculture, then without the help of an experienced agronomist, he is very likely to not even receive a crop that pays for expenses.

Wheat is a very finicky culture (as, incidentally, all the others cultivated by man), and any even the slightest mistake can be very expensive. As many farmers note, it is very difficult and sometimes unprofitable to cultivate wheat, so you need to make sure several times that the wheat will grow and then be sold, otherwise such an initiative can only become a loss of time, effort and money. But even in the case when everything is calculated and the forecast is favorable, there remain risks associated with environmental conditions. But of the positive aspects, it is worth noting that in the light of recent events, the state is sluggishly beginning to change something in the agricultural sector and even, it seems, in the right direction.

How to open a grain growing business from scratch

To start a business, you need to register as a business entity. Of course, it is possible to register an individual entrepreneur or a form of a legal entity, but for farming it is better to arrange a peasant farm - a peasant farm. It will not work for private household plots - personal subsidiary plots, as the volumes of cultivation and harvesting of grain crops far exceed the volume that can be on a personal plot. The registration will take about 20 thousand rubles, taking into account the collection of all papers and obtaining permits in all instances. But even before the registration stage, it is better to find the land on which the work is planned. There will be no problems with it in the south of Russia, but in the middle lane you can find fields suitable for growing wheat.

Huge spaces are sown with wheat, otherwise there will be no benefit, and for this you need at least 100 hectares of land. Some farmers rent thousands of hectares, because the more land is cultivated, the greater the profitability of the whole undertaking, not to mention the absolute profit indicators. To get enough flour, you need to grow a lot of wheat, so tens of tons of grain are bought. And in this case, the farmer, who offers quite a bit of his products, is not interesting to large buyers, and will be able to sell the goods only on the collective farm market, and the revenue on it cannot be very large.

Perhaps it’s not worth buying land, it’s better to rent it for several years, at first - only for a year. The cost of renting a hectare of land is up to three and a half thousand rubles per year, but this is in the case of chernozem, other types of soils are rented out for much less money. If we take into account the chernozem areas, then we will have to allocate 350 thousand rubles for a year, and it can be considered good luck if we can agree on a monthly payment with the lessor, often money is needed for the year ahead.

It may make sense to rent a smaller area for sowing, but this is calculated separately by each entrepreneur in their region, but since wheat is always necessary, it can be hypothetically sold even in the case of the largest lots. Therefore, not in the predominantly agricultural regions of the country a large amount of wheat for sale can be provided with even more significant volumes of purchases, but it is also a little more difficult to grow it on black soil. Thus, approximately 200 thousand will be needed for the annual lease of 100 hectares of land in central Russia to 350 thousand in the south.

Characteristics of wheat varieties for sowing

When the land is found, you need to determine what kind of wheat will have to be grown. There are many varieties of this cereal, and you need to select the most popular and productive, which grows on the right soil and is resistant to specific climatic conditions. Wheat has the largest number of varieties (from an agricultural point of activity) in comparison with all other cereal crops, but here it is necessary to determine first of all which wheat will be grown - feed or food. Some sow the fields with different types of this cereal in order to reach a larger number of consumers in the end. According to statistics, much more feed wheat is consumed. But still, first of all, you need to consider which form of sowing is preferable.

Wheat can be called a good crop precisely because it can be both spring and winter. Therefore, depending on the region, its climate and agricultural features, varieties are selected that are sown either in spring, or in late summer or autumn. Sometimes the practice of sowing winter wheat is used, which is harvested in the spring, after which spring sown in the same field. This allows you to save space and get a crop twice a year. But then you may not have time to sow the field with a winter crop again, and even then the risk of plant diseases increases.

Proper farming does not at all involve planting one land with the same crop several times in a row, usually after harvesting, another crop is grown on the land, so that next year it will again be replaced by its original or even third one. This is all called crop rotation, and takes into account the plant allelopathy, that is, their mutual influence on each other. At the same time, you should not count on sowing the land with triticale or rye after wheat, closely related plants, and cereals in general, should not replace each other in a year.

Thus, a novice entrepreneur must choose several cultures that he will be engaged in, given their mutual influence on the soil and the germination of the follower, and either divide his plot into several parts to receive one crop annually (but from a different territory), or occupy different years by different plants. To understand all the intricacies, you need to study a lot of literature, and even better to find a person who is well versed in this.

In order to grow wheat, you need a considerable amount of seeds for sowing. So, the minimum can be called 100 kilograms of seeds per hectare, and sometimes this figure is several times higher. It all depends on how rich the soil is, what plants have grown on it before and on the general climatic conditions. If we take the average sowing rate of 150 kilograms per hectare, then 15 tons of seeds will be required per 100 hectares. The price of one ton of wheat seeds averages 6 thousand rubles, but may be higher or lower, depending on the variety.

Thus, the seed fund will cost 90 thousand rubles, but this is a very average figure for the above reasons. Seeds are purchased at first from a company specializing in this, there will be no such expenses in the future, since material grown independently will be used. The norms and conditions of sowing are very different, depending also on many conditions, and you need to be prepared for the fact that you have to learn from your own mistakes, choosing the most optimal cultivation methods.

What technique is needed for growing wheat

Of the capacities, the farmer will need specialized equipment and a barn for storing wheat. The barn can be installed on a site near the house or directly on the field itself, but it is better to store the equipment in a conspicuous place. Machines are divided into those that help care for the cereal and those that are designed for harvesting. But most farmers hire a harvester for the harvest time, as the machine is expensive, and buying it just for use at best several times a year is quite unprofitable. Therefore, it remains to purchase the following equipment:

  • Tractor.

  • Harrow and plow.

  • Seeder

  • Tiller

  • Cultivator.

All this equipment can either be purchased new, or purchased already in use, or borrowed on it or leased. Some farmers also rent these cars, not just harvesting equipment. It all depends on the amount of available funds, and sometimes you have to do with rental of used equipment. It is better, of course, to buy a new one and make depreciation deductions, and you can save especially well if you get borrowed funds for equipment.

If larger areas of wheat cultivation are planned, then it is worth thinking about buying some equipment in several copies, since otherwise there will be a chance that it will not be possible to harvest the crop on time. Modern equipment has reduced the need for manual physical labor to a minimum, but if all the need for it appears, you can find workers in the nearest settlement, where there are always workers to carry out periodic work.

The entrepreneur himself can cope with all other tasks with the help of his family, but here what is definitely necessary if the businessman is inexperienced in farming is the constant consultation of an experienced agronomist. Only such a person can tell exactly how, what and when it is better to sow and harvest. It’s not necessary to hire him as a permanent worker, but to find him in the nearest collective farm or even as a farmer who is independently engaged in growing crops is still very good. Specialist consultation, which takes place constantly and at all stages of housekeeping, can help to grow a really good crop.

Fertilizers and fertilizers for growing wheat

We must not forget about fertilizing and fertilizing wheat, as well as pest control. Wheat is especially vulnerable to weeds, as it has a weak root system. Significantly reduce the number of harmful plants and animals by constant orders to combat them, but if the precursor was chosen correctly, then pathogens and weeds will appear in small quantities.

Of the fertilizers, it is also better to choose organic or even biological origin. It is difficult to name the approximate cost of such work, because too many factors must be taken into account. But for 100 hectares of land you need to have at least 50 thousand rubles, and even for this money it’s unlikely that you can make a large amount of fertilizer and hold several orders for pesticide treatment. This amount is enough under all possible favorable conditions.

Wheat is an annual plant, that is, it grows in less than one year. Winter wheat (namely, it is planted almost everywhere except chernozem) is planted in mid-August in the northern regions or in early October in the south. It ripens in the spring, shortly before sowing spring crops, thus experiencing a significant drop in temperature. The whimsicality of this cereal can cause crop failure in the case of severe frosts in the absence of a snow cap, under which these plants are optimal for wintering. Unpredictable in recent decades, the weather in Russia significantly complicates the process of farming. Spring crops against this background may seem less susceptible to climatic conditions, but in this case the possibility of drought (which is a little easier, however, cannot be ruled out). Cereals love a mild climate, and sudden changes in temperature, fierce winters and hot summers only adversely affect the harvest. If successful, you can count on a good harvest of wheat.

Profitability of wheat growing business

As world practice shows, the relative yield indicator in this country is on average two times lower than the European average. So, in European countries they collect 5.5 tons per hectare, while in Russia, the collection was 2.4 tons per hectare. But these are average indicators for the country, in some regions it is better, in others, respectively, worse, and even if we accept this favorable outcome, we get 240 tons from a hundred hectares of land.

Wheat prices are higher in the winter months, especially in January (this gives an advantage in the cultivation of spring cereals), the lowest in late summer. The price will be completely different if you sell grain in kilograms on the market or sell the harvested material to the appropriate companies specializing in grain grinding or resale. On the farm, wheat is bought for about 7 thousand per ton, in agricultural regions this price is slightly lower, but in the middle lane and northern regions it can reach up to 8 thousand rubles per ton.

Thus, 240 tons can be sold for 1 million 680 thousand rubles, which can only return funds for the purchase of equipment in the first year, and the rest will be spent on rental space and other fixed costs. In subsequent years, it will no longer be necessary to purchase equipment, and it will be possible to make a profit, if the equipment was bought from hand, then after the first year of operation, profit from the sale may remain. Accordingly, we can talk about increasing profitability with each new hectare of land leased, but this also means additional expenses per year for each hectare. That is, profitability can be calculated exactly only in each particular case, its positive dynamics coincides with the area of ​​the sowed territory. Therefore, large farms sometimes grow wheat in square kilometers, because grains that make up a small percentage of the mass of a plant are valuable in it directly to humans.

Summing up, we can say that the payback of such an agricultural business only in the most favorable scenario will be the season - from sowing to selling after harvesting. Wheat alone is not worth it; you need to know the allelopathy of several plants and alternate them from year to year or change their location on the territory. In the case of renting 100 hectares, the lowest costs will be about half a million rubles, but only in regions with cheap land and with the purchase of very inexpensive equipment. But with such initial data, the yield will not be too large. It is better to arrange the cultivation of wheat in such a way that there remains a significant part of the crop for the winter, when it is most profitable to sell. And, of course, the farmer’s so important and necessary work, although very difficult, is exactly what feeds people in cities and rural areas.

Matthias Laudanum

(c) www.clogicsecure.com - a portal to business plans and guidelines for starting a small business 08/18/2019


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