Farmgate Price
Also called: farm-gate price, farm price, producer price
The farmgate price is the price a farmer is paid for produce at the farm, before transport, processing, packing, or retail markup. It is the grower's actual net revenue per unit and the honest basis for comparing what a crop earns — the retail shelf price can be 2–5× higher after the supply chain takes its share.
How Farmgate Price Works
Farmgate price is measured at the point of sale on or leaving the farm, so it excludes every downstream cost: haulage to market, cleaning and grading, cold storage, packaging, wholesaler and retailer margins, and value-added processing. Because those costs and margins vary enormously by crop, country, and channel, the farmgate price — not the consumer price — is what determines a farm's profitability.
The gap between farmgate and retail price is the marketing margin. For perishable horticulture sold through several intermediaries it is often 60–80% of the retail price; for a grower selling direct (farm shop, farmers' market, box scheme) it can be near zero, which is why direct sales can lift grower revenue substantially even at a lower headline price. Farmgate prices also move with harvest timing: selling at the seasonal glut can mean a fraction of the shoulder-season price, so storage and staggered selling are core margin levers.
Because a mix of farmgate and retail prices would corrupt any comparison, price benchmarking should collect one consistent point — the farmgate — from every grower. WiseYield's Market Intelligence records grower-entered farmgate prices and grounds its crop-price forecasts in them, building an anonymized regional price band that keeps improving season after season rather than quoting a static figure.
Sources
- FAO. Producer prices methodology — FAOSTAT prices domain.
- OECD. Producer Single Commodity Transfers — price gap concepts.