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 historical numbers to compare costs over time.

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

Knowing your average cost per bushel is extremely valuable. It gives farmers 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.

Why This Discipline Matters

You might wonder: if I get close with a rough estimate, isn’t that good enough? In many cases, the rough estimate hides big risks and lost opportunities. Here are some compelling reasons it's worth being rigorous:

Informed marketing / pricing decisions

If you don’t know your true cost, how do you know whether a grain sale is profitable? Many growers run pricing decisions based on guesswork. If fixed costs rise (equipment payment, rent, interest) or yields drop, your “old” cost may be far off—and your margins vanish.

Field-level decisions and ROI optimization

The real power comes when you know which fields are profitable and which lose money. That lets you reallocate inputs, experiment, adopt precision practices selectively, or drop marginal fields.

Benchmarking and peer comparison

Being rigorous lets you compare your performance to peers, extension budgets, or university cost guides. For example, Purdue’s cost & return guide estimates fixed (overhead) costs in Indiana in 2023 at ~$387 per acre, pushing breakeven for corn in many cases well above $4.00/bu. Ignoring overhead would give you a dangerously false sense of profitability.

Cost control and continuous improvement

Once you dig into true cost, you can see where the leaks are: too much machinery investment for marginal returns, over-application, underuse of assets, or cost creep in support equipment or shop overhead.

Resilience in tight margins

When prices are low or input inflation is high, your margin of error shrinks. The better you know your cost structure, the easier it is to respond. FarmProgress notes that overhead (term interest, depreciation, utilities, taxes) is often underestimated and increasing year after year. Farm Progress

Credibility with lenders, partners, and stakeholders

A disciplined cost model sends confidence to lenders or partners: you’re not guessing, you’re managing.

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. Instead, 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.

At level 6, your decisions are sharper. You might shift fertility programs, change rotations, drop marginal fields, or reallocate machinery resources.

Conclusion: Treat Cost Per Bushel as a Management Tool, Not a Math Problem

Knowing your true cost per bushel isn’t about building a prettier spreadsheet.
It’s about running the farm like a business—one that can adapt, invest wisely, and hand off a stronger operation to the next generation.

When you commit to tracking costs accurately—on an accrual, crop-year basis—you gain more than a number. You gain clarity about where money is made and lost. You gain confidence in your marketing and purchasing decisions. And you gain control over the direction of your business, even in volatile markets.

Many farms treat cost per bushel as a “once-a-year” exercise. The top operators treat it as a continuous feedback loop—updating costs, yields, and assumptions every season to sharpen their edge. That discipline pays off in better margins, smarter investments, and fewer surprises.

If there’s one takeaway, it’s this:

Don’t chase the perfect number. Build a system that keeps your numbers honest.

The more precise you are about cost today, the more resilient your farm will be tomorrow.

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