Why does the climate and distance matter?
Because of the climate, particular crops can’t grow in certain regions. Even where a crop can grow, differing climatic conditions cause its potential yield to differ too. By multiplying the yield and the price of the crop at the farm gate it equals the “on farm revenues”.
The key cost impacting these revenues is the transport cost to the market. It’s not necessarily the total distance that entirely matters, but more the mode of transport that does – trucking is very expensive.
Taking in the impact of both the climate and transport costs, the following video outlines the profitability of farming around the world. We hope you enjoy it!