Freight TradingBulk commodity supply chains
Learning tool 03 · Form transformation

Wheat-to-Bread Transformation Margin

This tool answers one practical question: after buying wheat and paying to mill, bake and deliver it, how much money is left from each tonne of bread sold?

Read the transformation margin framework
Start with one tonne of bread

Does turning wheat into bread make money?

Compare the money received from selling one tonne of bread with the wheat, milling, baking and delivery costs needed to make it. The amount left is the transformation margin.

Start with four main drivers

Change one number and watch the answer.

The remaining freight, milling and ingredient assumptions are already included and can be opened below.

The short answer

Yes — $98.27 remains after the included costs.

Bread sale$720.00money in
Total included cost$621.73money out
Money left+$98.27/ttransformation margin

Transformation margin means the money left from one tonne of bread after the costs included in this model. It is not full company profit: taxes and unlisted fixed overheads remain outside the calculation.

Equivalent per 800 g loaf
+$0.079
Share of bread revenue
13.6%
Highest FOB wheat price before margin reaches zero
$361.20
First follow the tonnes

What is needed for one tonne of bread?

One consistent finished-bread basis
Wheat required0.811 t wheat

This is the wheat needed to supply 0.600 t flour.

Mill the wheat0.600 t flour

Milling also produces 0.211 t mill feed, which can be sold.

Bake and sell1.000 t bread

The flour is combined with 0.400 t water and other ingredients in the simplified finished product.

More assumptionsOpen the detailed freight, milling and bakery inputsThese eight values are already included in the answer above.
Getting wheat to the mill
Milling and saleable leftovers
Other costs and programme size
Follow the money

Where the bread's sale value goes

Every amount is for one tonne of bread
  1. Bread selling price+$720.00
  2. Wheat delivered to the mill−$228.65
  3. Cost of milling that wheat−$28.38
  4. Money recovered from mill feed+$25.30
  5. Other bread ingredients−$80.00
  6. Bake, package and deliver−$290.00
  7. Risk buffer−$20.00
  8. Money left after included costs+$98.27
Cause and effect

What changes the answer?

These cards isolate one change while holding every other input constant.

If flour extraction rises by 1 percentage point+$2.13/t breadBetter yield needs less wheat, although it also produces less mill feed to sell.
If FOB wheat rises by USD 10/t−$8.11/t breadEach tonne of bread needs 0.811 t wheat, so not all of the USD 10 passes through.
Money recovered from mill feed+$25.30/t breadSelling the milling leftovers reduces the cost carried by the flour.
Answer explainedWhy does the result move?Open or close the model FAQ
In plain English

Flour extraction means how much flour comes from the wheat entering the mill. The editable 74% default is the top of FAO's general 72–74% commercial range. This teaching model assumes 0.60 tonnes of flour in one tonne of bread. The remaining milling output is treated as saleable mill feed, so that income reduces the cost of the flour.

The rule behind itMoney left/t bread = bread selling price − all included wheat, milling, baking, delivery and risk costs