I respectfully disagree with you guys.

Production Costs - which is what the segment is about - do not include your medical insurance, home owner's insurance, life insurance, groceries, or any other living expenses, The Hefty's video is talking about production costs.

Note - I didn't say you didn't need to account for them - but let me be a little more clear so we all talk the same terms.

- The 180x4=720 in their video is your gross.
- Your prodcution costs are the fertilizer, seed, fuel, crop insurance, micros, chemicals, etc needed to grow the crop.
- What you make once you subtract your cost of production (what the farm basics segment is about) is Your Income.
- You remove your living expenses from your Income. If you want to divide them per acre - that's ok - but they are not part of your production costs. I'd argue your depreciation should come from that too... but like Paul the original said - that's an accounting term so it might be handled differently by different people.....
-Profit is anything that exists once everything is paid (your net bank account increase or decrease + all your assets from year A to B.)

And Please Note - a Profit of Zero is still making a living (that gets confused often!) If that number is below 0 then you are doing like most of America - and living beyond your means.

What you speak of - showing a cash flow to a bank - is a budget - which is something everyone in America needs to have, and should be taught in schools.  It is not really your break even point which is what the segment is about. Your break even point technically is Gross - production cost - rent (if any) = 0. It has nothing to do with your living expenses.

What I was saying is - if I'm a Land Lord, and my tennant comes to me wanting to lower the rent, and shows me the numbers the Hefty's had - the first thing I'm going to do is question them on why I would consider depreciation of their equipment something that I would care about..... If you decide to add things like life insurance, and your homeowners to your production costs..... I'd probably ask you to leave, and I'd find someone else.... 

But I'm not saying we as farmers don't need to track them and figure them into our Budget/Cash Flow.

Sorry if that wasn't clear.