AMES, Iowa – A new publication entitled Iowa Vegetable Production Budgets (PM2017) is now available through ISU Extension to address the need for accurate budgeting tools among vegetable producers.
This publication contains a series of enterprise budgets that can be used to estimate the costs and revenue associated with producing and harvesting a product. Vegetable growers with multiple products can use the enterprise worksheets to develop annual budgets for key crops. This publication includes worksheets for 4 ft. by 100 ft. plantings of asparagus, basil, green beans, carrots, eggplant, garlic, salad greens, snow peas, potatoes, sweet potatoes, raspberries, cherry and heirloom tomatoes and strawberries (per acre).
To help producers budget expenses, the first element of the worksheet requires a projection of total demand for a given enterprise, or an estimate of what the producer thinks is a realistic sales goal. Based on this projected demand, pre-harvest and harvest expenses can be estimated to account for total variable costs. This amount is then added to the fixed costs associated with owning assets to calculate the total cost of production.
“Developing an enterprise budget allows producers to make different types of decisions such as where to set the price of the products they sell, how to evaluate production costs and change production practices to become more efficient and how to determine the best mix of products to produce and market,” said Craig Chase, ISU Extension farm management field specialist.
Each worksheet is divided into sections by cost, including:
- Total projected receipts (demand) by sales unit (per lb.) and land unit (per bed)
- Cost of planting and growing for each respective enterprise
- Production costs, including any interest expense associated with pre-harvest crops
- Cost of harvesting and packaging for each respective enterprise
- Ownership costs associated with assets (land, machinery, irrigation equipment)
- Pre-harvest and harvest expenses are combined to estimate total variable costs
- Summary of returns [returns = total receipts – (variable cost + fixed cost)]
Each worksheet also provides sample budgets, which can be used as an indication of what a particular crop could average over time and location. Individual farm results may vary according to soil types, location to markets and managerial ability, among other considerations. In addition, this tool does not account for marketing costs, since these vary greatly based on location and methods of distribution. Producers should add marketing to production costs in order to accurately estimate the overall profitability of an enterprise.
The research for this publication was funded by a grant from the Marketing and Food Systems Initiative of the Leopold Center for Sustainable Agriculture located at Iowa State University. The Leopold Center is a research and education center with statewide programs to develop sustainable agricultural practices that are both profitable and conserve natural resources.
This publication is currently available for order through any ISU Extension county office, online through the ISU Extension Distribution Center at www.extension.iastate.edu/store or by calling (515) 294-5247.