Resources / Grain / Cost of production
Grain · Financial · Breakeven

Cost of production

$248/t

Total operating expenditure divided by tonnes of grain produced — your financial breakeven per tonne, independent of whatever the market does between sowing and delivery.

Worked example · Operating cost per tonne produced
$248 / t Fertiliser $78 Chemical $46 Machinery $52 Seed $22 Overheads $50
Operating cost per tonne produced
The benchmark

Grain cost of production is highly season- and yield-dependent, but southern and central NSW cropping commonly runs a breakeven around $200–280 per tonne; a poor yield spreads fixed costs over fewer tonnes and pushes it higher.

GRDC GroundCover ↗
What it signals

It is the key tool for managing volatility: it shows how far the price can fall before a crop stops paying, and it exposes whether high input years actually bought enough extra yield to lower the cost per tonne rather than just raise the spend.

Data required to calculate
Total operating expenditure$Grain producedt

Silo pulls each of these from the sources the operation already uses, and keeps the figure current automatically.

How to improve it
01

Lift yield and grade so fixed costs spread across more premium tonnes.

02

Benchmark input purchases and time fertiliser buying against the market.

03

Cut the biggest overheads — machinery and finance — per tonne produced.

Questions & answers

What is cost of production?

Total operating expenditure divided by tonnes of grain produced — your financial breakeven per tonne, independent of whatever the market does between sowing and delivery.

What data do you need to calculate cost of production?

You need: Total operating expenditure ($), Grain produced (t). Silo pulls each of these from the sources the operation already uses and keeps the figure current automatically.

What is a good cost of production benchmark?

Grain cost of production is highly season- and yield-dependent, but southern and central NSW cropping commonly runs a breakeven around $200–280 per tonne; a poor yield spreads fixed costs over fewer tonnes and pushes it higher.

How do you improve cost of production?

Lift yield and grade so fixed costs spread across more premium tonnes. Benchmark input purchases and time fertiliser buying against the market. Cut the biggest overheads — machinery and finance — per tonne produced.

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