KENYA · GUIDE 0002 · EDITION 4.2
Spinach Farming Profit: Calculate Cost per Accepted Kilogram
Price the product the buyer accepts
A kilogram of harvested leaves with stems is not the same unit as a kilogram of trimmed leaves accepted by a kitchen. Put the crop identity, trimming standard, delivery point and accepted unit on the quotation. Before pricing, record gross harvest, stems removed, damaged leaves, packed weight, accepted weight and any returns.
Example: the effect of trimming and rejection
All quantities and amounts below are invented for arithmetic practice. They are not market prices, production forecasts or evidence of earnings from a real Kenyan farm.
| Fictional delivery | Quantity or amount |
|---|---|
| Gross harvested weight | 100 kg |
| Stems and unsuitable leaves removed | 20 kg |
| Additional rejection at buyer | 5 kg |
| Accepted and paid quantity | 75 kg |
| Assumed selling price | KSh 50 per accepted kg |
| Revenue | KSh 3,750 |
| Attributable crop, trimming and route costs | KSh 2,625 |
| Contribution before separately allocated overhead | KSh 1,125 |
The attributable cost per accepted kilogram is KSh 2,625 ÷ 75 = KSh 35. Dividing by the 100 kg harvested gives KSh 26.25 and hides the effect of trimming and rejection. The KSh 1,125 contribution is not final profit: fixed overhead, taxes and other applicable items require separate, consistent treatment.
Include a repeat journey and unpaid stock
If the kitchen delays receiving stock and a second trip is needed, record that cost against the affected delivery. Determine whether a return was due to a quality failure, an agreed unsold-stock arrangement or an order change. These have different commercial consequences and should not be silently combined.
Cash available is based on collections and payments, not merely invoice value. If KSh 2,250 of the example revenue has actually been collected, KSh 1,500 remains outstanding. It cannot fund today's irrigation or transport until received. Confirm invoicing treatment with KRA for your circumstances.
Test a lower accepted quantity
Recalculate when the buyer changes the trimming requirement or rejects more leaves. Break-even requires fixed overhead divided by positive contribution per consistently defined unit, rounded up. If contribution is zero or negative, that model has no meaningful positive break-even quantity. Replace every illustrative assumption with trial records and written quotes before deciding to invest.