Cost per unit produced (bushel, ton, etc.) of a crop may fall with increased farm size or scale. Economies of size and scale arise from costs that do not increase proportionately to the area of land being farmed or the quantity of the product being produced. For example, a tractor driver operating implements 20 feet in width may cost the same per hour as a driver operating similar implements 40 feet in width. The cost of the driver per acre or hectare is far less for the driver pulling 40 feet wide implements. Similarly, the purchase price of many implements, tractors, and structures may increase at a fraction of the rate of increase in their capacity. Therefore, the ownership cost per unit of work completed may be lower for the larger machinery when both sets of machinery are used to capacity. Economies of scale can be seen in enterprise budgets for differing field sizes and underlying farm sizes for the same crop in the same location.

Diseconomies of scale also exist. As farms and other businesses become larger, the required quantity of management increases. Additional people may be employed and addi­tional layers of management may be required to coordinate activities.

Economies of scale also exist in acquisition of inputs and selling products. Average price per unit purchased may be reduced for large volume orders that reduce the selling costs incurred by suppliers. Smaller-scale farmers may achieve the benefits of economies of scale by working with other farmers or by hiring custom services to employ specialized equipment or oversized equipment without owning it. Marketing associations and buying clubs allow groups of farmers to acquire benefits of large volume transactions.