7 Ways Farmers Can Use a Breakeven Calculator

Master the Variables that Impact Your Success

As harvest winds down, you are already planning for next year's crop. You'll be going over everything from anticipated market prices and the state of your equipment, to whether you should prepay for next year’s seed, chemicals and fertilizer. Before you decide anything, though, know your numbers and how all the variables – fields, crops, expenses and market prices – can impact your breakeven point.

In the middle of a tight market with such low commodity prices, knowing your breakeven point is more critical than ever. A precise and easy-to-use breakeven calculator gives you a chance to look ahead – to get a picture of your worst, average and best case scenarios – and plan for your success. A breakeven calculator can help you:

1. Figure out when you should be selling your 2016 crop. If your breakeven point comes to $3.80 per bushel, for example, and prices hit $3.90, maybe you should be selling some of your crop. Knowing your breakeven point can give you confidence in your decision to sell.
2. Figure out what you should be planting for 2017. The breakeven calculator can help you decide between corn, soybeans or other crops – based on variables such as field usage, expenses and yields.
3. Determine what you can afford to pay for seed, chemicals and fertilizer. Will prepaying help you break even? Or do you need to negotiate with your suppliers for a price point that supports your breakeven analysis?
4. Negotiate your rental price. There’s nothing like a thorough breakeven analysis when it comes to negotiating your rental price and demonstrating what you can afford to pay. Many owners were once farmers, too, and will want to help you make the numbers work.
5. Discover your breakeven point by field or per acre. Use the breakeven calculator on a certain field or parcel of land. By inputting fixed and variable costs, crop type and expected yield you can quickly discover what market price is needed to break even.
6. Manage your overall expenses. Rental fees, equipment, chemicals, fertilizer and seed. What’s your total cost per acre? The breakeven calculator helps you identify what your target expenses need to be in order to reach a certain breakeven point.
7. Evaluate how a purchase will impact your breakeven point. The time may or may not be right for new equipment or a land purchase. A breakeven calculator can help you make a sound decision.

Our breakeven calculator is easy-to-use and mobile friendly. You can use it anywhere.

The first time, it might take you 15 minutes or so. Once you get familiar with the tool, just five or ten minutes can give you the calculations you’re looking for, and you have the option to either email or print your results.

Now is the perfect time to get into your numbers, to help make 2016 a successful year and to plan ahead for 2017. Anytime you need help with the tool, have questions or want to confirm projections for your operation, one of our ag experts will be happy to help.