Why You Need to Know Your Costs (Breakeven) to Improve Your Grain Marketing

As a farmer, knowing your costs is essential for managing your input budget and improving your grain marketing. By understanding your breakeven point – the point at which your revenue covers your costs – you can make more informed decisions about when to forward contract, when to sell on the spot market, and how much to produce.

Having a clear understanding of your costs can also help you manage your relationship with the bank. When it comes time to renew your operating line of credit or apply for a loan, being able to demonstrate that you have a handle on your costs and a plan for profitability can help you secure the financing you need.

But knowing your costs is about more than just managing your finances. It can also help you make smarter on-farm decisions. For example, if you know that you need to achieve a certain price per bushel to break even, you can make informed decisions about which crops to plant, how much to plant, and when to plant them. This can help you maximize your profits and avoid costly mistakes.

Overall, understanding your costs and breakeven point is crucial for improving your grain marketing and making sound on-farm decisions. By knowing your costs, you can better manage your input budget, improve your relationship with the bank, and make more informed decisions about when to forward contract and how much to produce. This can help you maximize your profits and succeed in the competitive world of grain farming.