Know Your Cost Per Bushel — The Most Important Number in Farming
By AgAlmanac Finance Desk
You can't make good marketing decisions without knowing your cost of production. Here's a plain-language breakdown of how to calculate yours — and why most farmers underestimate it.
Every crop marketing decision you make — when to sell, whether to price ahead, how to evaluate a contract — depends on one number: your cost of production per bushel. Most farmers know their cost roughly. Fewer know it precisely. Here's how to get there.
Why Most Farmers Underestimate Their Cost
The most common mistake is leaving out fixed costs. It's easy to add up seed, fertilizer, chemicals, and fuel — those are the obvious variable costs. But land cost (whether cash rent or the opportunity cost of owned ground), machinery depreciation, and overhead often get excluded from the mental math. When you include everything, your true cost per bushel is usually $0.30–$0.80/bu higher than the quick estimate.
The Components
Variable costs per acre (typical Corn Belt corn): - Seed: $80–$110 - Fertilizer: $130–$170 - Chemicals: $60–$90 - Fuel & drying: $40–$70 - Crop insurance: $25–$45 - Total variable: $335–$485/acre
Fixed costs per acre: - Land (cash rent): $150–$300 depending on region and quality - Machinery ownership/depreciation: $60–$100 - Overhead (labor, insurance, interest): $30–$50 - Total fixed: $240–$450/acre
Total Cost Range
For a corn operation in the Corn Belt, all-in production cost typically runs $575–$935/acre. At 180 bu/acre, that's $3.19–$5.19/bu. At 200 bu/acre, $2.88–$4.68/bu.
This is why it matters so much: a farmer with $3.50/bu cost has very different marketing options than one with $4.50/bu cost — at the same market price.
How AgAlmanac Helps
The Input Costs and Break-Even tools in AgAlmanac are built exactly for this — log your costs as they happen, and the platform calculates your cost per acre and break-even price automatically. The break-even signal tells you when the market is above your cost and by how much.
Start Simple
If you've never calculated your cost of production formally, start this season. Log every input purchase. Include your land cost. At the end of the year, divide by your harvested bushels. That number will change how you think about every marketing decision you make.
Put This Into Practice
Track your costs, monitor markets, and know your break-even price — all in one place.
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