Farm Break-Even Price Calculator
Calculate the minimum crop price you need to cover all fixed and variable production costs and determine your profit margin at current market prices.
Cost of Production Break-even price = Total cost per acre / Expected yield per acre. Knowing this number tells you the minimum market price needed to avoid a loss. If corn costs $600/acre to produce at 180 bu/acre, break-even is $3.33/bu.
Fixed vs Variable Costs Fixed costs (land rent/ownership, equipment depreciation, insurance) are incurred regardless of production. Variable costs (seed, fertilizer, chemicals, fuel, labor) scale with the crop. Both must be covered for long-run viability.
Breakeven at Different Yield Scenarios Yields vary by weather. Running break-even calculations at several yield levels (optimistic, average, pessimistic) reveals downside risk and how much crop insurance coverage is needed.
Using Break-Even for Hedging Once you know your break-even, you can use futures or forward contracts to lock in a price above it, removing price risk before the crop is even planted.