<p>This study examines the determinants of cost efficiency among smallholder Teff producers in South Soddo District, Ethiopia. Using stochastic frontier analysis (SFA) based on cross-sectional data from 196 households, this research estimates the level of cost efficiency and identifies the factors influencing inefficiencies. The results reveal an average cost efficiency of 89.2%, ranging from 37.2 to 97.4%, indicating that farmers could, on average, reduce input costs by 10.8% while maintaining current production levels. The stochastic cost frontier analysis identifies land and labor prices as the most influential cost drivers, with elasticities of 0.276 and 0.244, respectively. These are followed by seed, oxen, fertilizer, and herbicide prices. In terms of inefficiency determinants, the age and education level of the household head, as well as family size, are negatively associated with cost inefficiency, suggesting that older, more educated farmers and larger households tend to operate more cost-efficiently. Conversely, land fragmentation has a positive relationship with inefficiency, highlighting the challenges posed by managing multiple, scattered plots. The study employs a one-step SFA approach to overcome methodological limitations in prior research, providing unbiased and consistent estimates of inefficiency determinants. The findings underscore the importance of addressing structural and human capital factors to enhance cost efficiency in Teff production. Policy recommendations include targeted training for younger and less educated farmers, promoting labor-sharing arrangements, implementing land consolidation initiatives, and improving access to critical inputs. These measures could significantly improve cost efficiency, productivity, and livelihoods in the Teff sector of South Soddo District.</p>