Sorghum Farming Break-Even Analysis: $515K Revenue in Year 1

Fixed costs $31.5K/mo Month 1 base

Contribution margin 76.5% After variable costs

Break-even revenue $41.2K/mo Revenue needed

Break-even timing Month 9 Forecast point

Break-even calculator

Use this calculator to test monthly revenue against variable expenses and fixed costs, then see how close sorghum farming is to break-even.

Lean Base Full

Monthly revenue Revenue sets the pool that pays direct farm costs and overhead. $ Small crop mix Scaled harvest Variable expenses Seeds, fertilizer, fuel, and crop care rise with output. $ Tight input spend Heavy input spend

Money available to cover fixed costs $74,000 $100,000 revenue - $26,000 variable expenses

Margin ratio

74%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the crop margin has to cover. $ Slim overhead Larger crew

Break-even chart Revenue Total costs

Which sorghum farm expenses are fixed and which move with sales?

Cost classification

Break-even only works if land, payroll, and storage stay as coverage targets while true production inputs flex with revenue. In this model, first-year break-even in Month 9 depends on keeping those buckets clean.

Expense	Cost	Break-Even Treatment	Common Mistake
Land Lease Cost	Fixed	Model as an acreage commitment. First-year leased acres are 350, based on 500 total acres and 70% leased land.	Treating land as a per-bushel charge instead of a coverage target.
Seeds and Planting Materials	Variable	Use as a production input tied to sales volume; the first-year assumption is 8.5% of revenue.	Locking seed spend as flat overhead when planted acres change.
Fertilizers and Soil Amendments	Variable	Tie directly to production economics; the first-year assumption is 6.5% of revenue.	Missing margin pressure when yield plans require heavier soil inputs.
Fuel and Energy Costs	Semi-variable	Split between a base operating need and usage tied to field work; the first-year usage proxy is 5.5% of revenue.	Treating all fuel as fixed, then overstating margin at harvest.
Pest Control and Herbicides	Variable	Model with crop activity and sales volume; the first-year assumption is 3.0% of revenue.	Underbudgeting treatments when acreage and crop mix expand.
Storage Facility Rent	Fixed	Keep the $2,500 monthly rent in fixed overhead, even though harvest volume changes by season.	Spreading storage only across sold bushels and hiding idle capacity.
Equipment Maintenance and Repairs	Semi-fixed	Start with the $2,000 monthly base, then step it up when acreage, equipment count, or operating hours expand.	Assuming repairs rise smoothly with every bushel sold.
Equipment Operators	Semi-fixed	Model staffing in steps: 2.0 FTE in the first year, rising to 4.0 FTE by the fifth year.	Treating hired operator payroll as purely per-bushel labor.

How does break-even change as sorghum acres move from lean to base to full scale?

Scenario table

As acreage scales up, revenue rises faster than fixed overhead, so the farm has more room to absorb costs. The catch is cash still follows harvest and sales timing, so early months can stay tight.

Planning assumptions only; weather, yield loss, prices, and sales timing can move results fast.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean sorghum farm, Year 1	$776K	$182K	$394K	76.5%	$200K	Thin cushion; one bad harvest can strain cash.
Base sorghum farm, Year 3	$193M	$40M	$491K	79.3%	$104M	Fixed costs are easier to absorb, so break-even risk drops.
Full sorghum farm, Year 5	$353M	$63M	$548K	82.1%	$236M	Best cushion here, but harvest timing still drives cash dips.

What breaks the sorghum break-even plan first?

Stress test

Year 1 revenue is $776K versus $515K break-even, so the plan starts with a $261K cushion. That buffer shrinks fast if grain prices soften, fuel and fertilizer rise, or crop receipts slip.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$515K	$261K cushion	Base case clears break-even comfortably.
Revenue shortfall	Revenue falls 20% from the base case.	$515K	$106K cushion	Sales still cover break-even, but the buffer is thin.
Fixed-cost increase	Fixed costs rise 10% to about $433K.	$566K	$210K cushion	Higher overhead trims the cushion, but the plan still works.
Margin pressure	Variable load rises from 235% to 285%.	$551K	$225K cushion	Fuel, fertilizer, and drying costs push break-even higher.
Combined pressure	Revenue falls 10%, variable load rises to 285%, and fixed costs rise 10%.	$632K	$66K cushion	The plan still clears break-even, but only by about $66K.

Is this sorghum farm ready to commit to 500 acres before it signs leases and buys equipment?

Founder checklist

Don’t lock in acreage, equipment, or labor until the farm can carry the first season’s cash gap. The model reaches break-even in Month 9, but it still has to survive a 500-acre start, a $1.667M cash trough, and a late harvest.

1Acreage mix500 acres / 30% owned

Verify the 500-acre plan and the 30% owned, 70% leased split before signing land, because the rest of the model assumes that footprint from the start.

2Fixed burn$47.4K/mo

Add the $15.9K lease bill to about $31.5K of overhead and Year 1 payroll, because fixed burn hits before crop cash does.

3Variable load23.5% load

Keep seeds, fertilizer, fuel, and pest control near a 23.5% variable load, or 76.5% contribution margin, so one bad season does not erase the margin.

4Core crew3.5 FTE

Confirm that 1 farm manager, 0.5 agronomist, and 2 equipment operators can cover planting and harvest, because the Year 1 crew is already built into the break-even path.

5Cash floor-$1.667M / $515K

Test the downside at $515K in revenue and keep crop insurance assumptions separate, because the model still dips to about $1.667M below zero before it stabilizes.

6Harvest windowMonths 9-11

Confirm storage is ready before the Month 9 to Month 11 harvest window, because sales cycles run 2 to 6 months and cash will not arrive evenly.