Calculating cost of production (COP) is an important part of marketing but not every farmer keeps a close eye on their COP.

OMAF offers some tips on developing a COP budget, which is impossible without good farm records. While the format can vary, typically a COP budget includes gross revenue, direct variable costs, indirect variable costs, fixed costs and net profit or loss. Several other resources are available to help farmers ensure their COP calculations will have maximum impact on a business. Farms.com Market School’s 10th Episode is an 8 minute in-depth analysis of COP calculations, particularly on a per bushel basis, and their benefit to any marketing plan. In addition to enhancing marketing plans, COP calculations can be useful benchmarking tools.

Refer to the TIP report (derived from the entire AgriStability database) for industry benchmarks based on similar farm types and income ranges.