For farmers trying to decide what financial-planning resources to use to be the most profitable, the Ohio State University’s (OSU) Department of Agricultural, Environmental and Development Economics offers budgets to give farmers a place to start.
“Without some form of budgeting and some method to track an enterprise’s progress, farmers will have difficulty determining their most profitable enterprises and determine if they’ve met their goals for the farm,” said Barry Ward, production business management leader, OSU Extension.
Farmers can use enterprise budgets to evaluate options before resources are committed, estimate the amount of rent that can be paid for land or machinery, determine break even yields or prices and calculate potential returns on an investment. They also provide critical input for whole-farm planning, including the potential income for a particular farm, the size of farm needed to earn a potential return and anticipated cash flows throughout the year.
“One of the real benefits of using enterprise budgets is that they help farmers to not forget expenses that should be included in the planning or budgeting process,” said Dianne Shoemaker, OSU Extension state diary financial management specialist. “The budgets don’t just look at cash expenses such as seed, fertilizer, sprays and fuel, but they also take into consideration the overhead costs such as charges for land, labor, management, machinery and equipment.
The Ohio State University Extension offers the following 2012 enterprise budgets:
- Corn production
- Soybean production
- Wheat production
- Corn silage production
- Alfalfa hay production
- Alfalfa haylage production
- Cow - Calf
- Market Steer
- Market Steer
- Yearling Market Steer
- Yearling Market Steer
- Market Heifer Budget
Farmers can find the 2012 enterprise budgets at http://aede.osu.edu/programs/farmmanagement/budgets.
Do you or a farmer you know use enterprise budgets? Have they proven helpful in the past? Would you recommend them?
Photo obtained from: www.ocj.com.
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