Farm Profitability Calculator
Estimates total farm profit by combining crop revenue, government payments, and per-acre production costs across the entire operation. Use it at budget time to evaluate whether a crop enterprise will cover costs and generate a return.
About this calculator
Farm profit is calculated on a per-acre basis and then scaled to the full operation. Revenue per acre comes from two sources: crop sales (totalYield × marketPrice) and any direct government payments (e.g., ARC/PLC). Total costs per acre are split into variable costs (seed, fertilizer, chemicals, fuel) and fixed costs (land rent, depreciation, insurance). Net profit per acre = (totalYield × marketPrice + governmentPayments) − variableCosts − fixedCosts. Multiplying by farmSize gives the whole-farm profit. Full formula: Profit = farmSize × ((totalYield × marketPrice + governmentPayments) − variableCosts − fixedCosts). A positive result means the enterprise covers all costs; a negative result signals a loss that must be offset by off-farm income, equity, or financing. This calculator is most useful when comparing crops, evaluating rental rates, or stress-testing price scenarios.
How to use
A 500-acre corn farm yields 185 bu/acre at a $4.50 market price, receives $12/acre in government payments, and has variable costs of $380/acre and fixed costs of $210/acre. Revenue/acre = 185 × $4.50 + $12 = $844.50. Total cost/acre = $380 + $210 = $590. Profit/acre = $844.50 − $590 = $254.50. Whole-farm profit = 500 × $254.50 = $127,250. Enter your figures and the calculator shows whether the enterprise is viable at current prices.
Frequently asked questions
What is the difference between variable costs and fixed costs on a farm?
Variable costs change with the level of production and include items like seed, fertilizer, pesticides, crop insurance, and fuel — expenses that are incurred only if the crop is planted. Fixed costs are incurred regardless of whether the land is farmed or how productive the season is; examples include cash rent or mortgage payments, machinery depreciation, and property taxes. Separating the two is important because in a poor price year a farmer may still choose to plant if expected revenue covers variable costs, even if fixed costs create an overall loss, rather than leaving the land idle.
How do government payments factor into farm profitability calculations?
US federal programs such as Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) make direct payments to eligible producers when market prices or revenues fall below historical benchmarks. These payments can meaningfully shift the profitability picture, especially in low-price years. Including them in the revenue line gives a more realistic view of total income than crop sales alone. However, payment amounts are uncertain at planting time, so conservative budgeting often uses $0 for government payments to identify the breakeven price from crop revenue only.
How can I use this calculator to determine my breakeven price per bushel?
To find your breakeven price, set profit to zero and solve for marketPrice: Breakeven price = (variableCosts + fixedCosts − governmentPayments) / totalYield. For example, with $590/acre in total costs, $12/acre in government payments, and 185 bu/acre yield, breakeven = ($590 − $12) / 185 = $3.12/bu. If current futures prices exceed $3.12, the enterprise is profitable. Running the calculator at several price levels — say $3.50, $4.00, $4.50 — quickly shows how sensitive profit is to small market price movements and helps inform hedging or forward contracting decisions.