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 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:

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.

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 these examples should only be used as examples. Enterprise budgets taken off the web should be modified to include all relevant line items (prorated insurance, utilities, equipment use, etc.) The numbers in the example columns should be adjusted to fit your specific resources, practices and markets. For diversified vegetable and fruit operations, the thought of building enterprise budgets for each crop can be overwhelming. Start with a few per 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.