New Crop and Livestock Budgets on the VCE Web Site

Farm Business Management Update, August 2001

By Gordon Groover

The farm business management staff and Jerry Swisher, Sue Puffenbarger, and Richard White have published the 2001-2002 crop and livestock budgets. Electronic copies of all budgets can be viewed and downloaded by going to the Virginia Cooperative Extension World Wide Web site (at http://www.ext.vt.edu/). To see the budgets, select "Educational Programs & Resources," then select "Farm Business Management & Marketing" and select "Budgets" from the list of resources. The budgets are listed under crop and livestock budget categories below.

Crop Budgets

• Alfalfa Hay
• Annual Pasture and Hay
• Cool Season Pasture
• Corn Grain
• Corn Silage
• Fescue Pasture and Hay
• Grain Sorghum and Grain Sorghum Silage
• Grass-Clover Hay
• Silage and Double Crop
• Small Grain and Straw
• Soybean
• Tobacco
• Warm Season Pasture and Hay
• Data Files for Crop Budgets

Livestock Budgets

• Beef
  • Cow Calf
  • Stocker Steer
  • Stocker and Replacement Heifer
  • Finishing
• Dairy
• Horse
• Sheep and Feeder Lamb
• Swine

The budgets can be used as planning guides to assist farmers in making production and management decisions throughout the year. The budgets provide an estimate of all cash costs for selected crop and livestock enterprises. This information and the layout of the budgets can be used as a format to enter farm-level data as a starting point to evaluate alternatives crops or livestock enterprises. Possible uses of the budgets include

• Assisting in the decision to harvest or abandon a crop by dividing total harvest cost by estimated price or value per unit to obtain the breakeven yield to cover harvest costs. For example, alfalfa hay (budget alfhay5.xls) shows a per ton harvest cost of $36.80. Assuming that alfalfa hay had a value to the farm of $100 per ton, as long as the harvested yield exceeded 0.368 tons per acre, the farm would just cover or breakeven on their harvest costs. If the value of the hay to the farm is estimated to be $50 per ton, the breakeven yield would increase to 0.736 tons.

• Doing a breakeven analysis between enterprises. In a simple case, full season soybeans, conventional till, 35-bushel yield (budget sybnc35b.xls) verses corn grain, conventional till, 120-bushel yield (budget crngc120b.xls). To calculate the breakeven yield of soybeans relative to corn, we apply the following formula:
  (Yield corn)(Price corn) - (Expenses corn)-(Expenses SB)
  BE Yield of SB = -----------------------------------------------------------------------
  Price of SB

  Assuming that corn price at harvest is 2.20 and soybeans are $5.00, the breakeven yield is 36.41 bushels:
  (120)($2.20) - ($210.10 - $128.15)
  36.41 bushels = ---------------------------------------------
  $5.00

• Pricing custom work. Consider that your neighbor has asked you to harvest and haul his corn grain crop to his bins. You want to charge a fair price to cover all your expenses. The harvest costs for corn grain, conventional till, 120-bushel yield (budget crngc120b.xls) is $0.30 per bushel, including labor at $6.00 per hour. Therefore, if your neighbor has 200 acres averaging 130 bushes per acre, then using this budget, the estimated harvesting cost might be $7,800. This amount does not imply that represents your farm costs, but it does give an estimate to make sure that your cost estimates are within reason.

Contact the author at xgrover@vt.edu

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