Large grain farms have lower per-acre costs than smaller grain farms, up to 1,000 acres, says Gary Schnitkey, University of Illinois farm management specialist.
Based on the Farm Business Farm Management Association record-keeping program, Schnitkey and co-author Dale Lattz found that per-acre costs for farm sizes in categories less than 800-1,200 acres are higher than for larger farm size categories.
“Average total costs are the same for farms of more than 1,200 acres,” says Schnitkey. “Once farms reach 1,200 acres we find no evidence that per acre costs decrease with increased farm sizes.
“However, in our opinion, it's unlikely that farms between 4,000 and 10,000 acres have significant per acre cost advantages over farms between 1,200 and 4,000 acres.”
The data does not support one common-held belief that large farms have better purchasing power than smaller farms. “Our data does not support this contention because costs are relatively constant across farm sizes,” says Schnitkey. “In particular, crop costs remain constant across larger farm sizes suggesting that farmers do not have purchasing power with fertilizer, seed or pesticide inputs.”