Budgets are simply a formal means of organizing relevant economic information to help you make business decisions. Enterprise budgets that list receipts, costs, and net returns for a single product are a fundamental planning and analysis tool.
The receipts, costs and net returns on an enterprise budget are commonly shown for a year, coinciding with the business reporting cycle. Enterprise budgets are especially helpful for evaluating the feasibility of an existing or potential crop, and for developing a crop’s target market price. Additionally, vegetable enterprise budgets expressed on a per acre basis allow for comparisons across crops, between farms, and over several years.
Many websites offer a good starting point when developing crop enterprise budgets. Sites listing specific vegetable enterprise budgets include:
- Penn State Agricultural Alternatives http://extension.psu.edu/plants/vegetable-fruit/fact-sheets/agricultural-alternatives
- AgMRC Vegetable Budgets http://www.agmrc.org/commodities-products/vegetables/
- Cornell High Tunnel Budgets http://blogs.cornell.edu/hightunnels/economics/
- UK Center for Crop Diversification 2013 Vegetable and Melon Budgets http://www.uky.edu/Ag/CDBREC/vegbudgets13.html
- Wisconsin 2014 Fresh Market Vegetable Budgets http://www.uwex.edu/ces/farmteam/budgets/fresh-market-vegetable.cfm
In addition to the above sites, the National Agricultural Risk & Farm Management Library has a budget library easily searched by commodity and geographic area. See https://agrisk.umn.edu/Budgets.
As a final note, when reviewing enterprise budgets developed elsewhere, it is important to identify the author's assumptions about the methods of production, levels of input use and market channel. These assumptions have a significant influence on receipt and cost estimates. Enterprise budgets taken off the web should be modified and the numbers adjusted to fit your specific resources, practices and markets.
For assistance with enterprise budget development and evaluation, contact your local Cooperative Extension office and/or USDA Service Center.
Written by Michael Sciabarrasi, Extension Professor (retired), Agricultural Business Management, UNH Cooperative Extension. Updated by Thomas Smiarowski, Agricultural Risk Management Consultant, UMass Extension.