Labor costs under $50 per acre ideal for crop farms


Labor costs under $50 per acre ideal for crop farms

An ag economist is recommending crop farmers dedicate less than 10 percent of their gross revenue to labor.

Michael Langemeier at Purdue University analyzed 2020 data from farmers across the Midwest along with a case study farm in south-central Indiana to establish labor benchmarks.

“My rule of thumb is you’d like to have at least $500,000 in gross revenue per worker,” he says.

Total labor costs include hired labor and operator income.

“Labor cost per crop acre was right around $39,” he says.  “If you can get something under $50 per acre, I think that’s something to certainly shoot for.”

Langemeier tells Brownfield evaluating variable costs like labor and machinery during times of especially high input costs allows farmers to better prepare their budgets and protect margins.

He also recommends evaluating labor costs before bringing in more employees or additional family members.