Calculating the profitability of an Astréia mill in 2022 5 September 2024

If you only have 3 minutes to read this article, we’ll give you a pictorial summary. 3 things to remember for 10-15 tonnes of wheat

1. You are a cereal grower: make the most of your investment in around 12 months
2. You are a miller: make your investment pay off in around 12 months
3. If you are a farmer-baker: your investment will pay for itself in less than 8 months

Here are a few indications of flour prices in 2021:

Organic T80 flour in 1 kilo (sold in Biocoop), made on Moulins à Cylindres

Markal-type flour

2.10€ to 2.30€ per kilo

Flour Millstones

3€ per kilo or more if it’s an old wheat

Sale Mill Astrié type T80

2 per kilo or more direct to the consumer

Between €1.40 and €1.60 per kilo to retailers, who therefore make a margin.

Rye, buckwheat and rice flour :

Less demand means less production, less competition

2.50€ to 3€ per kilo depending on packaging and seed quality

Small spelt flour

Small pack sizes generally

4.50 to 6€ per kilo from retailers for sale to private individuals

Generally, retailers will take a margin of around 30% on the resale of your product.

The price of organic wheat :

0.40 to €0.60 per kilo.

So by reselling, we achieve a coefficient of 3 or even 4.

Profitability for cereal farmers: how do you calculate it?

Growing wheat, the costs

If we assume that a hectare costs us a total of €800 per hectare

The first variable will be the harvest yield:

• if you harvest 2 tonnes, the cost is €400 per tonne, or 40 cents per kilo.
• if you harvest 4 tonnes, the cost is €200 per tonne, or 20 cents per kilo.

So we have to forecast the cost per hectare and the possible harvest.

Selling wheat:

we can hope to sell 600 euros a tonne, or 60 centimes a kilo, so we can break even or earn 400 euros gross margin per hectare.

In this example, the sale of wheat yields a gross margin of €400 per hectare.

Compared with the investment in time and energy, this is not ‘profitable’.

Sale of flour:

If we harvest 2 tonnes of wheat, that’s 1.600 tonnes of flour.

Let’s imagine, at the lowest price, that we resell at €1.40 via a reseller.

That’s €2,240 per hectare in sales.

In the end: €2,240 (figure) – €800 (costs) = €1,440 margin per hectare.

In the same example, the sale of flour generates a gross margin of €1,400 per hectare.

Between the selling price of the wheat and the selling price of the flour, we’re looking at a coefficient of 3 or more.

Improving yields will increase margins.

To be taken into account:

• This creates a new profession: that of selling and marketing.
• You spend less time at work and you can grow.

Profitability for a baker: how do you calculate it?

The cost of wheat

This costs you 800 euros per hectare of wheat.

Let’s take the example of a harvest on poor land: you harvest 2 tonnes of wheat

With 2 tonnes of wheat + water + loss during cooking: you will make around 2 tonnes of bread.

Reselling bread

If we make a basic brown bread sold at €4 per kilo

We make €8,000 in sales

8,000€ in sales – 800€ in costs = 7200€ gross margin

The sale of brown bread with flour from his own mill generates a gross margin of €7,200 per hectare for the farmer-baker.

To be taken into account:

• Bread-making
• Time spent selling in the shop

In a nutshell: from cereal grower to baker

How long will it take to make the mill profitable?

From 5 tonnes of wheat per year, the Astreia mill pays for itself in less than 2 years.

• Cereal growers: you produce 10 to 15 tonnes a year, so your mill pays for itself within a year.
• Peasant bakers: you can make your mill profitable within 6 to 8 months