Your total cost per acre, divided by the yield you expect, is the lowest price at which the crop does not lose you money. That is your break-even price. Texas A&M’s 2026 budget for dryland cotton in its District 2 puts it at $0.80 a pound of lint, on 400 pounds an acre. At an invented price of $0.68, planting loses $48 an acre, which is $24,000 on 500 acres. Yet the same number would tell you to leave a failed field standing, when Texas A&M’s harvest example shows $1,743 net on 100 acres. So write two break-evens and date them: every cost before planting, only what is left to spend before harvest.
What does a break-even say, and what does it divide?
Two divisions give two answers. Total cost divided by the price you expect is the break-even quantity, the amount you must sell to cover every cost. Total cost divided by the yield is the break-even price, the lowest price that covers them. Colorado State University Extension describes them the same way: one finds the volume needed at a given price, the other the price needed at a given level of production.
Take the District 2 dryland cotton budget: 400 pounds of lint an acre and a break-even of $0.80 a pound on total costs. Multiplied back, that is about $320 an acre. Texas A&M defines the break-even as the price at which revenue exactly equals costs at the budgeted production.
Divide your own cost by your own yield today, and write the result beside its date.
Which costs go into the number?
It depends on what you are deciding. Fixed costs do not change with the amount you produce; the Colorado State fact sheet lists depreciation on equipment, interest, taxes and general overhead. Variable costs move with output, such as labor, power and fuel.
Texas A&M’s budget gives two break-evens for the same crop: $0.54 a pound on variable costs alone and $0.80 on total costs. The gap, $0.26 a pound, is about $104 an acre of fixed cost. Land belongs in the total: rented land at its rent, owned land at the rent it would earn. That is a recommendation, not a rule from the budget.
A price between the two pays the variable costs and part of the fixed costs, but not all of them.
Texas A&M’s 2026 post finds the expected price between the two break-evens in every budget but one, District 1 dryland. Its advice for a farm already invested in the crop is to look at returns above variable costs, because the revenue pays at least part of the fixed ones.
Mark each cost line on your sheet as fixed or variable, and divide each total by the yield.
Does the break-even change with the date?
Yes, because money already spent can no longer be saved. Before planting every cost is still ahead of you, so the total-cost break-even decides what to plant. Once the crop is in the field, Texas A&M treats planting and growing costs as sunk at harvest time. Fixed costs of the harvest equipment, such as depreciation and loan interest, are left out of the harvest choice, and only the cash cost of harvesting counts.
Suppose a dry summer cuts a field to 75 pounds an acre, against the budget’s 400. The budget’s $320 divided by 75 pounds is $4.27 a pound of total-cost break-even. Texas A&M’s harvest example prices lint at $0.62 (Rurivia’s calculation, mixing the budget’s cost with the example’s yield). Divide only the harvest cost, and the answer turns.
Texas A&M’s example field has 100 acres at 75 pounds an acre. It counts stripping at $0.12 a pound of lint, ginning at $3.10 per hundredweight and a $25 an acre harvest aid, and sells cottonseed at $265 a ton. The tool shows $1,743 net, or $17.43 an acre, if the farm harvests. At $0.62, harvesting pays from 45 pounds an acre; at 75 pounds, from $0.40 a pound.
The budget leaves out your own time, and low-yielding fields can bring a quality discount. Texas A&M advises building the discount into the price you enter. Write both before you decide.
How far is the sale from the break-even?
Compare the yield with the break-even quantity at the price you expect. OpenStax, an open accounting textbook, calls the difference between sales and break-even sales the margin of safety, and says that the higher it is, the lower the risk of a loss. Divide the difference by the yield and it reads as a percentage.
At the invented $0.68, the variable costs break even at 318 pounds, so the yield stands about 82 pounds above them, 20.6% of 400. The total costs break even at 471 pounds, so the yield falls about 71 pounds short, minus 17.6%. The acre pays its running costs and not the whole bill.
The estimate matters. The cost per acre stays and the pounds it is spread over fall: at 300 pounds the variable break-even price rises to about $0.72, above the example price. Write the yield’s source beside the figure.
Write the margin of safety under both break-evens, with the date and who decided.
Where to start
Before this sheet comes the break-even price you give a buyer; to size the loss a bad season can leave, read how bad a year the cycle can take. The break-even calculator does the divisions for you.
The same sheet, dated, works for any other enterprise in farm management.