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Calculating Your Cost of Production Takes the Uncertainty Out of Your Decisions

The Business of Agriculture,

Knowing your cost of production is essential to making sound business decisions. Profitable marketing depends on this calculation. Your cost of production also can inform decisions about expanding your operation, making new investments and more.

You will find plenty of online spreadsheets to help you calculate your cost of production. Producers also have more access to data than ever before. It can all feel overwhelming, whether you are taking your first crack at calculating your cost of production or turning the resulting insights into meaningful and decisive actions.

At Farm Credit Services of America, we have an e-learning program to help apply this important financial tool to your operation. The program focuses on the "why" behind using cost of production numbers and the application to different business decisions.

This free program is broken into five modules, each of which serves as a building block for the next module. Each can be completed in 10 or fewer minutes. They include:

  • Laying the Foundation – Financial Terms
  • Cost of Production Basics – How to Calculate
  • Try It Out – Do the Math
  • Try It Out – Make Decisions

Cost-of-production-video-thumbnailView Course

Tags: breakevens, production costs, Spotlight,

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FCSAmerica serves farmers, ranchers, agribusinesses and rural residents in Iowa, Nebraska, South Dakota and Wyoming. For inquiries outside this geography, use the Farm Credit Association Locator  to contact your local office.