Calculate the minimum selling price per bushel needed to cover all production costs at your expected yield. Set marketing targets with confidence.
Break-even price tells you the minimum selling price per bushel you need to receive in order to cover all production costs at your expected yield. It is the mirror image of break-even yield and is equally important for marketing decisions.
Knowing your break-even price allows you to set marketing targets, evaluate forward contract offers, and determine whether current futures prices represent a profit opportunity. If the market price is above your break-even, every bushel sold at that price contributes to profit. If below, you face a loss unless yield exceeds expectations.
This metric combines cost management and marketing in a single number. Reducing costs lowers your break-even price and expands the range of profitable marketing opportunities. Whether you are a beginner or experienced professional, this free online tool provides instant, reliable results without manual computation. By automating the calculation, you save time and reduce the risk of costly errors in your planning and decision-making process.
Every marketing decision starts with knowing your cost of production. Break-even price translates your per-acre budget into a per-bushel target that you can compare directly to futures quotes, cash bids, and forward contract offers. Having a precise figure at your fingertips empowers better planning and more confident decisions. Manual calculations are error-prone and time-consuming; this tool delivers verified results in seconds so you can focus on strategy.
Break-Even Price ($/bu) = Total Cost per Acre / Expected Yield (bu/ac)
Result: $4.00/bu break-even price
Total cost = $520 + $280 = $800/ac. Break-even price = $800 / 200 bu = $4.00/bu. If market price is $5.50/bu, you earn $1.50/bu profit × 200 bu = $300/ac net return.
Establishing a break-even price before the marketing year begins is the foundation of disciplined grain marketing. It provides objective criteria for evaluating every sales opportunity and removes emotion from the decision.
Create a matrix with yield scenarios (150, 175, 200, 225 bu/ac) on one axis and price scenarios ($4, $5, $6/bu) on the other. Fill in net return for each combination. This visualization makes risk tangible and guides both insurance and marketing decisions.
Not all fields have the same cost structure. High-rent fields have a higher break-even price than owned land. Low-productivity fields need higher prices to break even. Field-level break-even analysis reveals which acres are most vulnerable to price declines.
They are two sides of the same equation. Break-even yield = Total cost / Price. Break-even price = Total cost / Yield. Together they define the combinations of price and yield that result in zero profit.
Use your best estimate of expected yield based on field-level data. Trend yield is a good starting point. Using APH is more conservative and provides a safer break-even price for marketing decisions.
You face an expected loss. Options include reducing costs, waiting for price improvement, using options to establish a price floor, or evaluating whether the crop should be planted at all on that field.
If break-even price is $4.00/bu and the elevator offers $5.25/bu for harvest delivery, you lock in $1.25/bu profit. Forward contract a portion of expected production (30-50%) when price significantly exceeds break-even.
Yes, you can subtract expected government payments from total cost before dividing by yield. This gives a net break-even price that reflects all revenue sources. However, calculate both gross and net break-even for completeness.
Basis is the difference between futures price and local cash price. If your break-even is $4.00/bu and expected basis is -$0.30, you need futures at $4.30 or higher to break even. Always adjust for local basis in marketing decisions.