MU Extension ag enterprise budgets updated for producers
- Published: Friday, Nov. 3, 2023
COLUMBIA, Mo. – University of Missouri Extension crop and livestock enterprise budgets for Missouri producers have been updated at http://muext.us/MissouriAgBudgets.
“Enterprise budgets are economic tools to estimate the projected costs, returns and profit per unit for the enterprise,” said MU Extension agricultural economist Ben Brown. “Understanding cash and noncash costs are important because producers do not have to cover noncash costs every year but must do so over a longer period.”
MU Extension specialists have updated budgets for farmers working with row crops, beef, swine, dairy, sheep, goats, forages and more. Updates include projections for 2024 for market prices, yields, input costs, repairs, interest and ownership costs, including machinery and real estate.
The enterprise budgets are designed to be adaptable to each farming operation. “They are very simple and can be easily customized, providing estimates of profitability and details on the main components of costs and revenues for next year,” said MU Extension ag economist Adauto Rocha.
MU Extension agricultural business specialists recommend producers customize enterprise budgets.
“Accurate enterprise budgets allow managers to identify the most profitable enterprises, market (the) product and estimate changes in owners’ equity from production operations,” said Brown. “Once completed, an enterprise budget contains the data to compute cost of production, break-even yield and break-even price.”
Enterprise budgets help farmers list revenues and expenses in an organized way, said Rocha. “The budgets published by MU Extension aim to represent next year’s events, providing a sense of the expected profitability of the operation. Budgets can also be used to compare production systems and simulate the impact of management strategies and performance changes over profitability, which helps to improve decision-making.”
One of the best reasons to use an enterprise budget is that it lets managers and bankers conduct sensitivity analyses by changing price or yield, said Brown. Using historical price data or crop insurance records can provide managers with a probability of occurrence, and the manager can evaluate their financial risk from production operations.
Rocha said a change was made to this year’s swine budgets. “They now include manure value, which is estimated as the value of manure as a substitute for fertilizer.”
Other MU Extension Agricultural Business and Policy farm management tools that work in conjunction with enterprise budgets include farm record books and accounting resources. Find these and other business resources at http://muext.us/AgBusiness.
Writer: Julie Harker