Break-even pricing, revenue and units (2002)

Abstract

This publication presents a method for determining the break-even price, revenue and unit sales of value-added agricultural products. Although this method can be applied to any product, this publication is developed from the perspective of a producer in a post-farmgate business. This publication is designed to help producers understand how to establish the break-even price, revenue, and units sold from a cost perspective. While break-even revenue and units sold are calculated for making financial and management decisions, breakeven pricing is calculated to assist in helping market the product. Break-even pricing is important for producer owners of value-added businesses because they need to know how to price a product as compared with pricing a commodity.