Why do farmers destroy their crops when weather conditions are bad? Why bother going through the trouble? Why not just let them grow and get at least some harvest?
In: 8564
Here’s another element.
I’m an accountant for a primary producer.
In accounting there are things called fixed costs(always there. In this case the cost to put the crop in the ground) and there are variable costs. (Variable move with the cost of production. )
If the crop is bad, you only risk the fixed costs.
If you chase the loss you also risk the costs to produce that crop. The variable costs.
If you put these in a cost vs benefit analysis there will be a point where you pull out when the cost of production can’t be over come.
Latest Answers