KPIFinance

Farm Gate Price vs. Market Index

Ratio of the price received by the producer to the benchmark market price for the commodity

What is Farm Gate Price vs. Market Index?

Farm gate price versus market index compares the price a farmer actually receives with a benchmark market price. It shows how well producers are doing compared with the wider market.

Being below the benchmark can point to weak bargaining power, poor quality or timing, while being above it suggests good marketing.

How this KPI is measured

Function
Finance
Sub-function
Revenue Management
Industry
Agriculture & Food
Type
Lagging
Impact
Revenue
Unit
%
Measurement frequency
Monthly / Per season
Formula
(Actual farm gate price / Benchmark market price) × 100

How to calculate it

Divide the actual farm gate price by the benchmark market price, and multiply by 100.

For example, if a farmer received 210 per tonne and the benchmark price was 200, the result is 105%.

Choose a relevant benchmark for the product, grade and time, and compare over a season rather than a single sale.

Where it is used

  • Judging marketing performance

    Compare with the market.

  • Improving sales decisions

    Time and choose buyers.

  • Negotiating

    Use data with buyers.

How to improve it

Tips and common mistakes

  • Quality and specification affect the price you can compare.
  • Compare over a full season.
  • Consider storage cost when timing sales.

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