Onion Farming Break-Even Analysis: $77K Monthly Revenue Needed

Fixed costs $55.9K Monthly base

Contribution margin 82% After variable costs

Break-even revenue $68.1K Monthly target

Break-even timing Month 7 Model break-even

Break-even calculator

Test monthly revenue, variable expenses, and fixed monthly costs against break-even for an onion farm.

Lean Base Full

Monthly revenue Revenue is the cash coming in before direct costs and overhead. $ Low sales High sales Variable expenses These are the costs that rise with output and shipments. $ Low direct cost High direct cost

Money available to cover fixed costs $57,900 $70,600 revenue - $12,700 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

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

Break-even chart Revenue Total costs

Which onion farming expenses are fixed, and which move with sales?

Cost classification

Break-even only works if each expense behaves the way the model says it does. Here, the big risk is burying harvest labor, freight, and crop losses in overhead instead of treating them as margin pressure.

Expense	Cost	Break-Even Treatment	Common Mistake
Land lease	Semi-fixed	Model at $200 per leased hectare per month; in the first year, 45 leased hectares equals $9,000 per month.	Treating lease spend as variable per pound instead of tied to committed acreage.
Seeds, fertilizer, crop protection	Variable	Apply as 6% of revenue in the first year because input use scales with planted and sold crop volume.	Locking inputs as a flat monthly overhead line.
Harvesting labor and packaging materials	Variable	Apply as 4% of revenue in the first year and keep it inside gross margin math.	Treating harvest labor as overhead instead of direct margin pressure.
Logistics and freight charges	Variable	Apply as 5% of revenue in the first year because freight rises with shipped volume.	Leaving freight below contribution margin and overstating break-even safety.
Sales commissions and market access fees	Variable	Apply as 3% of revenue in the first year because fees move with sales volume.	Forecasting sales growth without the related selling fees.
Salaried payroll	Fixed	Use $482,500 per year for first-year salaried roles before any staffing step-up.	Spreading salaried payroll per pound and hiding the monthly cash load.
Utilities for farm office, cold storage, and irrigation pumps	Semi-variable	Start with the $3,000 monthly base, then watch usage during irrigation and cold storage periods.	Assuming the full utility bill stays flat when pumping and storage use rises.
Farm and crop insurance	Fixed	Use the $2,500 monthly premium as stable overhead in the planning range.	Dropping insurance from break-even because it does not vary with harvest volume.

How does break-even change across the lean, base, and full onion farm scenarios?

Scenario table

Break-even shifts with scale, yield loss, and crop mix. The lean case stays below fixed costs, the base case clears break-even in Month 7, and the full case has a wide cushion, but later-year EBITDA turns negative, so the model still needs a check.

Planning assumptions only; weather, timing, and market prices can move results.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean 50-hectare case	$64,937	$11,689	$63,008	82%	-$9,760	Still below break-even, so cash burns monthly.
Base break-even case	$76,839	$13,831	$63,008	82%	$0	At break-even, so small misses push it back under.
Full 200-hectare case	$372,875	$48,474	$90,083	87%	$234,318	Strong cushion now, but later-year EBITDA risk needs a review.

What breaks the onion farm break-even plan?

Stress test

The plan is tight. About $76,839 in monthly revenue only clears $63,008 of fixed costs because the 82% contribution margin leaves little room, so a small price drop, freight spike, or bigger harvest loss can push the farm into a gap fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$76,839	$0 cushion	Any miss on price or yield hurts fast.
Revenue shortfall	Monthly revenue falls 10% to about $69,155.	$76,839	$6,300 gap	Weak farmgate prices cut the cushion quickly.
Fixed-cost pressure	Fixed costs rise 15% to about $72,459 a month.	$88,366	$11,527 gap	Overhead growth makes break-even much harder.
Margin pressure	Variable expenses rise from 18% to 23%.	$81,829	$4,990 gap	Freight and market fees eat into margin.
Combined pressure	Revenue falls 10%, variable expenses rise to 23%, and fixed costs rise 15%.	$88,366	$19,200 gap	Harvest loss, freight spikes, and slow payments stack up.

What should you verify before you lock land, buy equipment, and hire the first onion farm team?

Founder checklist

Test the plan against the costs that hit before the first full harvest. If the land is not water-ready, the buyer mix is weak, or cash cannot cover the Month 13 low point, the $77,000 monthly revenue hurdle will not be enough.

1Buyer mix40/25/20/10/5

Confirm buyers can absorb the planned 40% yellow, 25% red, 20% white, 10% specialty, and 5% processing mix, because the crop plan only works if demand matches that split.

2Land load$22.8K/mo

Verify all 50 hectares are usable and water-ready, and check owned versus leased land, because 45 leased hectares at $200 each add about $9,000 a month before wages.

3Input margin82% CM

Lock seeds, fertilizer, crop protection, freight, and sales fees before prices move, because Year 1 variable cost is about 18% of sales and that keeps contribution margin near 82%.

4Harvest prepMonth 5

Line up harvest labor, trucks, sorting gear, and cold storage before Month 5, because the first specialty harvest window starts there and bottlenecks can turn ready onions into spoilage.

5Cash runway-$1.364M

Keep enough cash to cover the -$1.364 million low point in Month 13, because the model does not turn cash positive until after the buildout and ramp.

6Sales gate$77K/mo

Do not hire the full payroll plan until buyer commitments can support about $77,000 in monthly revenue, because the Year 1 wage stack and fixed load need that top line to hit break-even.