Enterprise Budgets for Row Crops

• row crops
• enterprise budget
• land costs

What goes into a row crop budget?

Revenue is expected yield times price, plus any program payments you can count on. Costs include seed, fertilizer, chemicals, insurance, fuel, repairs, drying, hauling, hired labor and interest, then machinery depreciation, overhead and land.

Land-grant universities, such as Iowa State, Illinois and Kansas State, publish annual crop budgets that show the typical structure.

Break the budget into stages that match the calendar: pre-plant, planting, in-season and harvest. That makes it easier to match costs to cash flow and to see when you will need operating credit. It also helps you spot where money can be saved, such as input purchases timed better or fewer trips across the field.

How do you choose yield and price?

Use your own multi-year average yield by field, and a price tied to your marketing plan or a conservative market estimate. Avoid using a best-year yield. Account for basis, the difference between futures and local cash price.

Farmdoc daily from the University of Illinois often discusses crop budgets and margins, and can help you understand how the numbers move.

How should you treat land cost?

Rented ground has a clear rent. Owned ground has a cost too: property taxes, interest on the loan, or the rent you could earn by leasing it out. Include it, or your budget flatters owned acres.

Where rent is based on a share, count the landlord's share of revenue and shared costs correctly.

Think about soil and field differences. A budget for a farm average may not describe a poorly drained field or a high-yielding one. If your fields vary a lot, budget the major ones separately, because decisions on rent, inputs and crop choice should reflect the ground you actually have.

• Cash rent or share rent
• Property taxes and interest on owned land
• Opportunity cost of owned land

How do you deal with machinery costs?

Estimate the cost per acre of owning and running machines: fuel, repairs, depreciation and interest. Compare with custom hire rates in your area. Sometimes hiring out an operation is cheaper than owning the machine.

Be careful with older equipment. Low ownership cost can be offset by repairs and downtime.

Treat fertilizer and chemical costs as decisions, not fixed items. Soil tests, field history and extension recommendations can show where lower rates are safe and where more is needed, and the budget can show the effect of each choice on margin.

How do you stress test it?

Change yield and price at the same time, since they often move in opposite directions in a region. Add a higher input cost case. See what the margin looks like and whether you can still service debt.

Check crop insurance. RMA provides information on crop insurance options. Ask an agent for the current choices before assuming a coverage level.

Compare your plan with the university budget for your region, line by line. Large differences are worth a look: maybe your costs are lower for a good reason, or maybe you left something out. That check often turns up an overlooked cost before it shows up as a cash shortage.

How do you use the budget?

Choose between corn and soybeans, decide whether to rent more land, negotiate rent and support your operating loan request. Combine field budgets into a cash flow for your lender.

Keep the budget as a living document. Update it when you buy inputs or lock in prices.

Include a line for hauling, storage and drying, and for marketing costs such as brokerage or commissions. These costs are easy to forget and can change which crop or marketing path comes out ahead.

What are common mistakes?

Using an average university budget without changing the numbers to match your farm, forgetting labor, overlooking interest and assuming every acre yields the same. Also paying rent based on last year's high prices.

Compare your final results to the budget each year and learn from the gaps.

Keep one row for crop insurance premiums and one for any expected indemnity risk, even though you cannot predict a claim. Insurance is a real cost that protects the operation, and showing it in the budget keeps you honest about the price of lowering risk. Your agent and your lender can help you decide how much coverage fits your cash position.

Last reviewed: November 12, 2026. Written by the Farm Money & Grants Editorial Team. Educational only, not tax, legal or financial advice. See our editorial policy.