Crop Budgets

Budgets are simply a formal means of organizing relevant economic information to help you make business decisions. Enterprise budgets that list all costs, income, and net returns for a single product are a fundamental planning and analysis tool.

The costs, income, and net returns on an enterprise budget are commonly shown for a full year, coinciding with the business reporting cycle. Enterprise budgets are especially helpful for evaluating the feasibility of an existing or potential crop, reviewing line items to identify potential savings or efficiencies, and for developing a crop’s cost of production and therefore target market price.  Additionally, vegetable enterprise budgets expressed on a consistent per acre (or per 1,000 sq ft) basis allow for comparisons across crops, between farms, and over several years.

There are many university extension websites that are a good starting point for developing crop enterprise budgets. Sites with enterprise budget templates for vegetable crops include:

• University of Massachusetts Vegetable Program - Crop production Budgets
• Iowa State Agricultural Marketing Resource Center - Vegetable Budgets
• Cornell University - High Tunnel Budgets
• University of Kentucky Center for Crop Diversification - Budgets
• University of Minnesota Center for Farm Financial Management - Budget Library

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 channels. These assumptions have a significant influence on income and cost estimates, meaning that templates should be used as examples that can be tailored to fit your own farm. Enterprise budgets found online should be modified to include all relevant line items for your farm (prorated insurance, utilities, equipment use, etc.). The numbers in the example columns should be adjusted to fit your specific resources, practices, and markets. This may involve building your own spreadsheet to combine aspects of several available templates. For diversified vegetable and fruit operations, the thought of building enterprise budgets for each crop can be overwhelming. Start with a few each year, prioritizing crops you grow in the largest quantities, ones that you question the profitability of, or crops that you are considering adding or dropping. 

For assistance with enterprise budget development and evaluation, contact your local Cooperative Extension office and/or USDA Service Center.