Cost per Bushel: How Far Can Numbers Take Farmers?

Ask a farmer their breakeven price or cost per bushel, and most can give you a number. That’s a great start—but how accurate is it?

For many growers, their cost per bushel is a rough estimate. It likely includes variable costs like seed, fertilizer, and chemicals, but often leaves out major fixed costs like land, labor, equipment, and depreciation. Even when growers track costs more closely, they often calculate them on a cash basis (what they spent in a calendar year) rather than an accrual, crop-year basis (what it truly costs to produce that year’s crop).

This is the first issue: incomplete cost accounting. But the second issue is just as important: costs aren’t evenly distributed per bushel or per acre. Yields vary across fields, and even within a single field. Management practices change throughout the season and averages can only take you so far. Most importantly, cost per bushel is not a static number. It changes year to year—good growers are constantly updating their numbers for planning and budgeting, while also looking back at historicals to compare costs over time.

How Far can Knowing Your Average Cost Per Bushel Take You?

Knowing your average cost per bushel is valuable—it gives you a starting point for marketing, breakeven analysis, and overall profitability. Let’s say your total crop-year expenses are $600 per acre and you yield $200 bu/acre, making your breakeven $3.00 per bushel. That’s helpful, but it’s just one piece of the puzzle.

An average cost per bushel allows you to:

✓ Set a rough target price for grain marketing
✓ Compare profitability across years
✓ Understand general cost trends in your operation

An average cost per bushel doesn’t allow you to:

ㄨ Identify which fields are making money
ㄨ Adjust management practices to maximize profitability on a per-acre basis
ㄨ Make precise decisions about input investments based on field-level ROI

For that, you need a deeper level of cost visibility.

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The Six Levels of Cost Per Bushel Tracking

Not all cost-per-bushel numbers are created equal. Here’s how different growers calculate it—and where the strongest operators separate themselves.

1. "I don’t know my cost per bushel."

Some growers simply don’t track it. Their decisions are based on a gut feeling or what’s in the bank account, making it difficult to know if they are profitable until tax time.

2. "I know my planned cost per bushel."

This grower builds a budget before planting, estimating expenses and yields to get a projected breakeven. However, this number is purely theoretical—it doesn’t incorporate actuals.

3. "I know my average cost per bushel using planned spend."

Here, a grower has actual yield numbers but still uses budgeted expenses. If they planned to spend $600/acre and harvested $200 bu/acre, they’ll assume their breakeven was $3.00 per bushel—even if actual spending was higher or lower.

4. "I know my variable average cost per bushel (cash basis)."

This grower tracks actual expenses on inputs, pulling invoices from the co-op to calculate costs. However, this is typically done on a cash basis, meaning expenses from last year’s purchases may distort the actual cost to produce this year’s crop.

5. "I know my variable costs on an accrual basis."

At this level, a grower aligns expenses with the correct crop year, rather than just tracking cash in and out. They may also apply general equipment charges, but likely aren’t fully breaking out all fixed costs.

6. "I know my true cost of production per bushel—by field."

The highest level of financial management assigns every expense to the correct field and crop on an accrual basis.

Fixed costs like equipment and land are properly allocated, and yield maps allow for precise cost-per-bushel calculations at the field level. Instead of working with averages, this grower knows exactly where money is made—and lost.

The Strongest Farmers Ask “What Field? Which Season?”

If you ask ten different farmers their cost of production per bushel, you’ll get ten different answers. Some don’t know and some give a ballpark number. The best growers? They don’t answer with a single number—they ask, “What field and which season?” Because they know that cost per bushel isn’t an average—it’s a moving target that must be updated and analyzed year over year.

Interested in tracking your true cost of production per bushel?

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