ENTERPRISE BUDGET

When creating your own enterprise budget, be sure to include the items listed below. Remember, approximations are better than nothing.

Here are a couple of things to consider:

  • Expenses:

    • Supplies 

      • Seeds, fertilizer, drip tape, harvest containers, boxes, fencing, feed, machinery, livestock medical, etc.

    • Labor 

      • Harvesting, weeding, packing, deliveries, etc. 

    • Irrigation

      • Watering duration in each field, etc.

  • Income:

    • Sales 

      • Market, restaurant, CSA, etc. 

PROFIT = INCOME - EXPENSES 

Enterprise Budget Use #1:

Assessing Profitability of Specific Crops

In this example, Farmer Jordan has been using an enterprise budget to track zucchini for the past three years and wants to know if the crop is profitable enough to continue growing it (substitute your own farm’s product within this example). The expenses listed are not comprehensive of all the expenditures you should consider when creating an enterprise budget but rather offer an example of where to start.

By tracking the income from zucchini sales, and the cost to grow it, Farmer Jordan can now determine if growing zucchini makes sense for the amount of acreage and labor needed to produce the crop. Furthermore, they can evaluate whether zucchini production should be maintained, decreased, or increased.

By comparing the zucchini and bell pepper enterprise budgets, Farmer Jordan can easily see that while bell peppers incur higher expenses, the income generated from sales makes them more profitable than zucchini. Therefore, they need to consider giving more space to bell peppers on their farm than zucchini.

Enterprise budgets show trends and comparisons amongst your farm’s products. You can use this knowledge to inform your long-term production plan and grow your farm’s financial success.

Enterprise Budget Use #2:

Determining Prioritization of Growing Space

Farmer Jordan is expanding a field and wants to compare zucchini with bell pepper production to know which crop is more profitable and, thus, which crop to plant more of. The expenses listed are not comprehensive of all the expenditures you should consider when creating an enterprise budget but rather offer an example of where to start.

Resources


When you’re ready to build your own enterprise budget, consider using one of these template resources as a guide. You don’t need to reinvent the wheel, but you should tailor the templates to what makes sense for your farm.