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Quick Answer: How to Calculate Farm Breakeven
Breakeven Price = Total Cost of Production ($/acre) ÷ Expected Yield (bu/acre)
Breakeven Yield = Total Cost of Production (/acre) ÷ Current Market Price (/acre) ÷ Current Market Price ( /acre) ÷ Current Market Price (/bu)
Include all fixed costs (land, machinery, overhead) and variable costs (seed, fertilizer, crop protection)
Use your crop insurance APH as your baseline yield
Compare your breakeven price to current new-crop futures to assess margin
Understanding your operation’s financial details is key to ensuring success for your farm. Knowing your yields and the investments you made on inputs to achieve those yields will not only put you on the path for success, it will also help your farm’s marketing strategy. That’s why it’s important to conduct a breakeven analysis.
In this post, we’ll cover:
A farm breakeven analysis determines the minimum crop price or yield you need to cover your total cost of production — the point where revenue equals expenses, with zero profit or loss. It accounts for all production costs including land, inputs, machinery, labor, and management, giving you a clear picture of your financial floor before you make any marketing decisions.
Here’s an example of how a basic breakeven calculation could look:
Breakeven Price (/bu) = Total Cost of Production (/bu) = Total Cost of Production (/bu) = Total Cost of Production(/acre) ÷ Expected Yield (bu/acre)
Breakeven Yield (bu/acre) = Total Cost of Production (/acre) ÷ Expected Market Price(/acre) ÷ Expected Market Price ( /acre) ÷ Expected Market Price(/bu)
Example: If your total cost per acre for corn is $680 and your APH yield is 185 bu/acre, your breakeven price is $3.68/bu. If corn is trading at $4.20/bu, you have a $0.52/bu margin — or roughly $96/acre of profit at that yield.
Calculating your cost of production — and the breakeven price per bushel that comes from it — starts with answering a few foundational questions about your operation:
How many acres will you plant?
What crops will you plant?
What’s their average yield per acre?
Answering these questions will help you take into account both your projected income and expected expenses.
Knowing your average yield or production per acre will help you build a baseline. To do that, start by building a budget that accounts for expenses like fertilizer cost and seed cost on an annual basis.
Make sure to include all costs for your ag operation, including those that are easy to overlook. Here’s a list of costs people sometimes forget to include:
Payments and depreciations
Return to management and labor costs
Interest charges on loans
Machinery costs
Overhead costs
Looking at these overarching expenses will help you break down your costs to a per acre level.
Costs fall into two categories — and knowing which is which changes how you make decisions.
Fixed costs stay the same regardless of what or how much you plant. These include land rent or mortgage payments, machinery depreciation, equipment loan payments, insurance premiums, and overhead like utilities and property taxes.
Variable costs change based on your inputs and acres. These include seed, fertilizer, herbicides, fungicides, fuel, drying costs, crop insurance premiums, and custom hire.
A typical corn operation might look like this:
Cost Category | Example | Cost/Acre Range |
Land rent | Cash rent | $150–$350 |
Seed | Corn seed | $80–$120 |
Fertilizer | N-P-K | $100–$200 |
Crop protection | Herbicides/fungicides | $30–$80 |
Machinery | Fuel, repairs, depreciation | $80–$130 |
Overhead & labor | Insurance, utilities, management | $40–$80 |
Note: Ranges vary significantly by region, operation size, and year.
When you know which costs are fixed and which are variable, you can start asking sharper questions: What's the minimum price I need to cover my variable costs and keep the lights on? What price do I need to fully cover all costs, including a return to management?
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Figuring out your cost per acre will give you more insight into how your operation is performing. Here are four steps for calculating cost per acre.
Start by generating your average yield by looking at your crop insurance APH. This is the best number to use when looking at your base breakeven yield number.
After looking at your base breakeven number, calculate what a best-case scenario and a worst-case scenario would look like for your operation.
To figure out your best-case scenario, think back to the best year you’ve had in the last 10 years. What’s your breakeven if you hit that figure? That is your best-case-scenario breakeven number.
To figure out your worst-case scenario, determine what your breakeven would look like if you had to rely on your crop insurance.
Once you’re able to figure out your best- and worst-case scenarios, you’ll be able to generate your average production. You’ll now know your revenue per acre by utilizing the number of acres that you have as well as your yield per acre.
There’s always a wild card that comes into play: price. Be extremely conservative when forecasting price.
To get the most accurate numbers, try to use the new crop price at your local elevator. Those numbers can go up and down.
However, you don’t need that price to create a true breakeven. When you figure out your expenses, you’ll know what your price needs to be because your breakeven price will tell you what you need to sell for. When you compare that to the local price at the elevator, you’ll know if it’s profitable or not.
Your breakeven number is just like everything else in your operation. It’s a tool to help you make informed marketing decisions.
Every operation is different. When you should sell will depend on when you need cash flow. Do you have payments that need to be made? Rent due? A tax liability?
Whether you’re buying equipment, buying land, or taking on new acres will have an effect on your cash flow.
All of these decisions have pros and cons on your overall operational breakeven. Utilizing the breakeven analysis allows you to know whether you're selling at a profit and when to market your crop.
Knowing your breakeven price turns a gut-feel marketing decision into a data-driven one. Here's a simple framework:
Below breakeven:
You're selling at a loss. Consider whether storing grain, waiting for a price rally, or using a forward contract for a later delivery makes more sense.
At breakeven:
You're covering costs but generating no profit. This may still make sense for cash flow timing — for instance, if you need to cover rent or loan payments.
Above breakeven:
This is your margin. The further above your breakeven you can sell, the better. Track this number against current futures and basis levels to identify opportunities.
Cash flow timing also matters. If you have a loan payment due in Q1, you may need to sell before prices peak. This is where having a farm operating line can give you flexibility — you can cover near-term obligations without being forced to sell at a bad price.
Get your free Cash Flow Projection Template here.
Once you've calculated your breakeven per crop, you can compare them side by side. If corn has a breakeven of $4.10/bu and beans have a breakeven of $9.50/bu, you can compare both against current new-crop futures to see which crop offers better margin potential on a given field.
This analysis is especially valuable for fields where you're on the fence — ground with higher cash rent, weaker yield history, or drainage challenges. Running the breakeven for each option takes the guesswork out of the decision and grounds it in your actual cost structure.
Keep in mind: consistency matters. Rotating crops based on projected profitability is reasonable. Dramatically shifting your planted acres based on one year's price outlook introduces operational risk. Use breakeven as one input alongside your agronomic plan.
Planning a farm budget and applying it to your breakeven analysis will help you make decisions throughout the season.
As an example, many farmers use different inputs (herbicides, fungicides, chemicals, and fertilizers) to help generate more yield. Consider the following:
How would the cost of crop protection impact your breakeven?
Would spending on crop protection generate a higher yield?
How would a higher yield impact your breakeven?
All of these questions come into play, and having a budget planned out allows you to make important decisions for your operation.
Once you know your numbers, the next question is whether your current financing is helping or hurting them. For many farm operations, the biggest lever on profitability isn't input costs or commodity prices — it's the terms on the debt they're carrying.
FBN® Finance works with farmers to refinance existing farm debt at competitive rates, helping lower monthly obligations, improve cash flow, and create more margin between where you are and your breakeven. Whether you're carrying a high-rate land loan, looking to restructure debt ahead of the season, or want a clearer picture of your options, our team can help.
FBN Finance has already served 2,900+ farmers and committed more than $2.3 billion — and as ag professionals ourselves, we understand that farm finances don't follow a typical calendar. It doesn't cost anything to explore your options.
See what refinancing could look like for your operation.
What is a breakeven analysis for a farm? A farm breakeven analysis calculates the minimum crop price or yield you need to cover your total cost of production. It helps you understand whether a marketing decision — like forward contracting or selling at harvest — will result in a profit or a loss.
What is a good breakeven price for corn? Breakeven prices vary widely based on land costs, input costs, and yield potential. A common range for corn is $3.50–$5.00/bu, depending on your cost per acre and average yield. Operations with lower land costs or higher APH yields will have a lower breakeven.
How do you calculate breakeven per acre? Add up all of your fixed and variable costs for the season (seed, fertilizer, land, machinery, overhead, etc.) on a per-acre basis. That total is your cost of production per acre. Divide it by your expected yield to get your breakeven price per bushel.
How does a breakeven analysis help with crop marketing? Your breakeven price is your marketing floor. If the current futures price or local elevator bid is above your breakeven, you're in a position to lock in a profit. If it's below, you need to either wait for a better price, reduce costs, or adjust your plan.
Can breakeven analysis help me decide what to plant? Yes. When you calculate breakeven for each crop you're considering, you can compare the margin potential for corn vs. soybeans (or other crops) on a given piece of ground. This is especially useful for deciding whether to plant a field that has higher rent or lower yield history.
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