Abstract: On the basis of the total cost of processed seeds arriving at farmers, the mechanism of the effect of transportation cost on the scale of seed processing factory was analyzed. The mathematical model was established to formulate the formula for transportation cost calculation. The economic scale and the optimum service radius of the seed processing factory were determined by seeking to obtain the extreme value of the total cost. It is concluded that the seed-demanding density, the fixed cost of seed processing factory and the transportation cost per unit are the chief factors affecting the economic scale of seed processing factory, and the relationships between the economic scale and the three factors respectively were derived, which provides a theoretical basis for the determination of the economic scale of seed processing factory.