Farm Break-Even Price Calculator
Farm Break-Even Price
Calculate the minimum commodity price needed to cover all production costs and return a profit on your farm operation.
Formula
Break-Even Price = (Variable Cost + Fixed Cost) / Expected Yield; Target Price = (Total Cost + Target Profit) / Yield; Total Cost = Cost Per Acre x Acres
Frequently Asked Questions
What costs go into break-even calculations?
Variable costs include seed, fertilizer, chemicals, fuel, crop insurance, and drying. Fixed costs include land rent or mortgage payments, depreciation, insurance, and taxes. Both must be covered to break even.
How does yield affect break-even price?
Higher yields lower the break-even price because fixed costs are spread over more bushels. A 10% yield increase can reduce break-even price by roughly 9%, making yield management critical.