Hops Farming Break-Even Analysis: Month 21 Planning Point

Fixed costs $32.3K/mo Payroll plus overhead

Contribution margin 82% After variable costs

Break-even revenue $39.4K/mo Revenue to cover fixed

Break-even timing Month 21 Model break-even point

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for a hops farm.

Lean Base Full

Monthly revenue Revenue sets the margin pool that covers farm overhead. $ Low sales High sales Variable expenses These are direct costs that rise with crop sales and harvest volume. $ Low costs High costs

Money available to cover fixed costs $35,500 $43,300 revenue - $7,800 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the farm must cover before profit. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which hop farm expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful if fixed overhead is separated from yield-linked spend. For this farm, payroll and recurring overhead set the monthly floor, while harvest labor, processing, and packaging rise with pounds sold.

Expense	Cost	Break-Even Treatment	Common Mistake
Farm Property Lease (Non-Owned Area)	Semi-fixed	Start with the modeled $5,000 per month, then step it up when leased hectares expand.	Treating leased acreage as a smooth percentage of sales instead of a capacity step.
Farm Insurance	Fixed	Include the $1,000 per month in fixed overhead for the break-even floor.	Pushing insurance into crop-level margin and overstating contribution per pound.
Farm Manager and Agronomist Payroll	Fixed	Include base salaries in fixed monthly costs because these roles run before and after harvest.	Leaving core payroll out of break-even because revenue is seasonal.
Seasonal Labor (Harvesting & Processing)	Variable	Tie labor to revenue or pounds sold; the model starts at 3.5% of sales in the first year.	Treating harvest labor as permanent overhead or spreading Month 8 and Month 9 work evenly across the year.
Processing & Packaging Costs	Variable	Model against sales volume; the first-year assumption is 9.5% of revenue.	Ignoring post-harvest drying, pelletizing, and packaging when calculating contribution margin.
Utilities (Farm Buildings, Cold Storage)	Semi-variable	Keep the $800 monthly base, then add usage pressure during drying, storage, and harvest months.	Treating cold storage power as flat when harvest output jumps.
Equipment Maintenance & Repairs	Semi-variable	Use the $1,500 monthly base and test higher repair spend during harvest and processing periods.	Burying the $1.27M initial equipment and buildout spend inside monthly operating expenses.
Farm Hand Supervisor FTE Additions	Semi-fixed	Add supervisor payroll in steps as acreage and crew needs rise, not per pound sold.	Modeling new crew support as a straight variable percentage of revenue.

How does break-even change as a hop farm moves from lean to full scale?

Scenario table

As acreage grows, the farm spreads fixed payroll and overhead over more crop, so margin improves. The model reaches break-even in Month 21, but payback still takes 59 months because harvest timing and buyer timing shape cash flow.

Planning assumption only; harvest timing, sales cycle timing, and buyer commitments can move cash break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean start, Year 1, 5 hectares	$10.7k	$1.9k	$32.3k	82.0%	-$315k	Still below break-even; fixed payroll and overhead stay too heavy.
Base case, Year 3, 10 hectares	$34.4k	$5.4k	$41.9k	84.3%	$573k	This is the first scale where fixed costs spread better and the model reaches Month 21 break-even.
Full build, Year 5, 20 hectares	$80.2k	$11.7k	$46.0k	85.4%	$2.01M	Best cushion; more acreage absorbs overhead faster, but harvest and buyer timing still matter.

What breaks the break-even plan for a hops farm?

Stress test

Year 1 revenue is about $129k against a $472k break-even target, so the gap is already wide. Weak Month 8 and Month 9 harvests, higher drying load, pest pressure, and slow brewery orders make the plan fragile.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$472k	$343k gap	Year 1 sales sit far below break-even.
Revenue shortfall	Cut Year 1 revenue by 10% to about $116k.	$472k	$356k gap	Lower brewery orders widen the funding gap.
Fixed-cost increase	Raise fixed overhead by 10%.	$520k	$391k gap	Lease, labor, and utility pressure push break-even up.
Margin pressure	Lift variable load from 180% to 230%.	$503k	$374k gap	Harvest, drying, and crop-care costs squeeze contribution.
Combined pressure	Apply 230% variable load and 10% higher fixed costs.	$553k	$424k gap	Bad harvest timing and cost inflation make break-even much harder.

Is this hops farm ready for the first big land and build commitment?

Founder checklist

Don’t lock in the farm build until the acreage plan, land cost, equipment, buyers, and payroll all match the model. Break-even lands in Month 21, and cash bottoms at -$758k in Month 20, so the runway has to survive the buildout.

1Acreage Plan5→20 ha

Verify the land ramp from 5 hectares in Year 1 to 20 hectares in Year 5 before signing any long lease or purchase deal.

2Land Margin82% CM

Check that the 20% owned share, $20k per hectare purchase price, $250 per hectare lease rate, and $5k monthly lease line still leave about 82% of revenue after the listed variable costs.

3Buildout$1.27M

Confirm the trellis, irrigation, harvester, drying kiln, pelletizer, cold storage, vehicles, and processing building are funded before any planting starts.

4Harvest Buyers9 periods

Validate brewery demand now, because pellet hops carry a 9-period sales cycle while wet hops clear in 1 period, and the harvest window sits in Month 8 to Month 9.

5Payroll Ramp$265k/yr

Make sure Year 1 payroll of about $265k, or $22.1k a month, fits the crop ramp before seasonal labor adds another 35% of revenue.

6Cash Gap-$758k

Fund enough reserve cash to cover the Month 20 low point, because break-even comes in Month 21 and payback takes 59 months.