How Farm Size Impacts Crop and Equipment Costs in Illinois

By Andi Anderson

It is often believed that larger farms operate at lower costs per acre due to efficiencies like bulk purchasing and spreading fixed costs over more acres.

However, Illinois Farm Business Farm Management (FBFM) data shows a mixed picture when it comes to actual cost savings based on farm size.

Analyzing four-year average data from 2021 to 2024, Illinois farms across northern, central, and southern regions show varied cost trends. Crop costs—which include fertilizer, pesticides, and seed—sometimes decrease with larger acreage but not always.

In northern Illinois, crop costs tend to drop once farms exceed 4,000 acres. In central Illinois, there is little variation in crop costs by size, except for minor changes in fertilizer and pesticide expenses. Southern Illinois shows increasing crop costs up to the 4,000-acre mark, with a decrease beyond that point.

Breaking it down further, fertilizer and pesticide costs often decrease as farm size grows, especially in larger northern Illinois farms. However, seed costs generally remain steady regardless of size.

Power and equipment costs—such as machinery repairs, hire, fuel, and depreciation—also show no clear pattern. In northern Illinois, machinery hire and fuel costs rise with size, while repair and depreciation costs drop for farms over 4,000 acres.

Central Illinois farms show higher machinery hire and depreciation costs as they grow, while repair and fuel costs stay relatively stable. Southern Illinois shows a decline in machinery repairs as farm size increases, but other costs like machine hire and fuel vary.

The data suggests that larger farms may not always benefit from lower per acre costs. Some efficiencies appear, but other expenses can offset these gains. Additionally, regional differences highlight the need for farmers to compare costs within their own areas.

Farmers should analyze their own records over time to understand cost patterns and identify opportunities for savings. Working with organizations like Illinois FBFM can help farmers manage financial planning, recordkeeping, and tax management effectively for long-term success.

Photo Credit: gettyimages-alexeyrumyantsev