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What Actually is Cost of Production?


Many words in the industry have multiple meanings and can sometimes get people’s heads in the wrong place. Cost of production, peer groups, transition planning and business structure are a few of them — and all of which I have chosen to work in.


Wrapping up harvest and heading into heavy planning season for next year, let’s focus on cost of production.


What’s Included in Cost of Production

We evaluate it in three ways: final cost per bushel, line-item expense per bushel and percent of total cost. Why are these three areas so important? Well, if you told me your cost per bushel of corn was $3 per bushel, first, I wouldn’t believe you, and second, how can you improve that number without more specificity?


By SHAY FOULK

October 21, 2023

agweb.com

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