Cost of Production Per Unit
It is your all-in cost to produce one bushel, animal, or unit — every input and expense spread across yield.
Formal definition
Cost of production per unit equals total production costs divided by units harvested or produced (bushels, head, bales, etc.).
Why it matters
Farmers market and contract using cost per unit; it moves with both input prices and yield.
Where you see it
- Crop enterprise budgets
- USDA cost-of-production tables
- Farm credit applications
- Co-op annual meetings
- Grain marketing advisory sessions
Worked example
- Total production costs: $320,000.
- Units harvested: 40,000 bushels.
- Cost per unit = $320,000 ÷ 40,000 = $8/bushel.
- Interpretation: Each bushel cost $8 to produce before owner draw.
How Business metrics calculates it
Production costs ÷ Units produced or sold (period-matched).
Where people fool themselves
Cost of production using last year’s yield and this year’s input prices is a planning number, not a historical one. Label which you meant.
Run it on your own numbers: the Agriculture & Farming calculator.