Enterprise Budgets and Production Costs for Organic Production

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Enterprise Budgets and Production Costs for Organic Production

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  • 1. ENTERPRISE BUDGETS AND PRODUCTION COSTS FOR ORGANIC PRODUCTION BUSINESS AND MARKETING National Sustainable Agriculture Information Service www.attra.ncat.org Abstract: This resource list contains Internet-based sources of enterprise budgets and production cost information for organic production of horticultural and agronomic crops and for organic livestock enter- prises.By Holly BornNCAT Agriculture Specialist Table of ContentsJuly 2004©NCAT 2004 Introduction ...................................... 1 Transition to Certified Organic Introduction Budgets ................................................. 2 Horticultural Crops: Vegetables 2 Enterprise budgets are an important tool forplanning and for ongoing farm financial manage- Horticultural Crops: Fruits andment. While many producers develop their own Nuts ......................................................... 2budgets, some producers choose to start withexisting budgets and adjust them for their own Herbs ....................................................... 3enterprises. These budgets represent only oneset of many possible cultural and management Agronomic Crops ................................ 3practices, and they do not account for geographicdifferences. They serve as a starting point for in- Livestock ...............................................4dividual producers to adapt to their own specificenterprises and situations. Budgets generally include variable operat- your labor and management. Simply divide re-ing costs, fixed costs, and expected production turns after costs by the number of hours of laborreturns. Labor is under the operating costs in the that you put into the enterprise. This can clarifytwo-part system. If costs are divided into three whether the enterprise is worthwhile for you orparts, the third part is labor. Labor is sometimes whether your labor can be put to more lucrativetreated separately to show a return to labor and uses elsewhere.management, in addition to a return over operat- The budgets and production costs listeding costs. This is especially important for enter- below represent many different enterprises inprises in which all the labor is supplied by the different parts of North America; some are quiteenterprise’s owner and the owner’s family, since recent, while others are quite old, but still useful.the owner needs to understand what his or her If you don’t have access to the Internet, contactlabor is being “paid” in terms of returns. Returns Cooperative Extension for the state listed, oron an enterprise often look attractive, but when call ATTRA for paper copies of the budgets youcalculated as returns on your labor, may well be would like to have. In many instances, your localbelow minimum wage. When returns are not Cooperative Extension Service specialist for farmspecified as “return to labor and management,” management (typically located in the Agricultur-you should calculate your per-hour returns for al Economics department of your local land-grant ATTRA is the national sustainable agriculture information service operated by the National Center for Appropriate Technology, through a grant from the Rural Business-Cooperative Service, U.S. Department of Agriculture. These organizations do not recommend or endorse products, companies, or individuals. NCAT has offices in Fayetteville, Arkansas (P.O. Box 3657, Fayetteville, AR 72702), Butte, Montana, and Davis, California.
  • 2. university) should be able to assist or recommend California, Central Coast (1994)someone to assist in adapting enterprise budgets Available budgets: cabbage, cauliflower,to reflect your individual enterprises, and show cucumbers, garlic, leaf lettuce, romaine lettuce,you how to use the budgets to improve your red onions, yellow onions, non-staked snap peas,farm financial management. Since resources vary non-staked snow peas, green bell peppers, redwidely from state to state, no single route exists bell peppers, sweet corn, large variety winterfor local assistance. squash, small variety winter squash, barley cover For conventional production, the Agricul- crop, vetch cover crop.tural Risk Budget Library at www.agrisk.umn. Included are yield and return ranges for selectededu contains budgets for a very wide range of central coast organic vegetable crops, whole farm an-crops and livestock. In developing a budget for nual equipment, investment, and business overheadorganic production, in many cases, a budget for costs for a diversified organic vegetable operation,conventional cropping or livestock may be the and hourly equipment costs for a diversified organicbest starting point. The budget can then be tai- vegetable operation.lored to specific individual situations, including http://vric.ucdavis.edu/veginfo/topics/organic production. prodcosts/organiccosts.html Transition to Certified New Jersey (1996) Available budgets: bell pepper, cabbage, cau- Organic Budgets liflower, cucumber, leaf lettuce, yellow onions, pumpkins, sweet corn, fresh market tomato, and processing tomato.British Columbia (2002) http://aesop.rutgers.edu/~farmmgmt/ne- Available budgets: dairy (fluid milk), spelt, budgets/organic.htmlpotatoes, oat, apple, sweet corn, carrots, wintersquash, spinach, salad greens, and cauliflower. www.agf.gov.bc.ca/busmgmt/budgets/spe- North Carolina (2003)cialty_organic.htm Available budgets: fresh market broccoli, kale, tomatoes, sweet corn, salad mix, leaf lettuce, peppers, and summer squash. www.ces.ncsu.edu/chatham/ag/SustAg/ Horticultural Crops: organiccoststudy.pdf Vegetables Wisconsin (1990) Potatoes: brief comparison of costs and re-British Columbia (1992-1996) turns of organic and conventional potatoes. Available budgets: garlic, carrots, celery, cornfor processing, peas for processing, whole beans www.wisc.edu/cias/pubs/briefs/004.htmlfor processing. www.agf.gov.bc.ca/busmgmt/budgets/spe-cialty_organic.htm Horticultural Crops: Fruits and NutsCalifornia (1996) Available budgets: processing tomatoes,mixed vegetables. California (2003) www.agecon.ucdavis.edu/outreach/crop/ Available budgets: strawberries.cost.htm www.agecon.ucdavis.edu/outreach/crop/ cost-studies/StrawbOrgCC03.pdfPAGE 2 //ENTERPRISE BUDGETS AND PRODUCTION COSTS FOR ORGANIC PRODUCTION
  • 3. California (2002) Wisconsin (1999) Available budgets: almonds. Available budgets: echinacea. www.agecon.ucdavis.edu/outreach/crop/ www.wisc.edu/cias/pubs/briefs/048.htmlcost-studies/AlmondOrgVN02.pdfCalifornia (1996) Available budgets: almonds, apples, table Agronomic Cropsgrapes, raisins, lemons, oranges, walnuts. www.agecon.ucdavis.edu/outreach/crop/cost.htm California (1996) Available budgets: cotton, rice. www.agecon.ucdavis.edu/outreach/crop/New Jersey (1996) cost.htm Available budgets: fresh market apples, ma-ture trees. http://aesop.rutgers.edu/~farmmgmt/ Illinois (2003)nebudgets/organic.html Available budgets: food-grade soybeans, food-grade corn. http://web.aces.uiuc.edu/value/New York (no date) Available budgets: strawberries (greenhouseproduction). Illinois (2001) www.hort.cornell.edu/department/faculty/ Available budgets: pasture (red clover, redpritts/straw.htmlpritts/straw.htm mammoth clover, alfalfa, timothy), cereal rye grain, blue corn, soft red winter wheat, soy- bean. www.aces.uiuc.edu/~asap/research/stew_ farm/Appendix-rep-02.html#Production%20B Herbs uds,%20ConvWashington State (2003) Kansas (2003) Available budgets: goldenseal. Available budgets: corn, blue corn, sweet http://smallfarms.wsu.edu/crops/organic corn, wheat, Austrian winter peas, alfalfa, cloverGoldenseal.html seed. www.kansasruralcenter.org/publications/ Organic%20cropping.pdfBritish Columbia (2002) Available budgets: calendula, Americanskullcap, catnip, dandelion root, lavender, Michigan (2001)lemon balm, licorice root, nettle, passion flow- Available budgets: grain corn, soybeans, ander, marshmallow root, chamomile, red clover, oats.shepherd’s purse, and yarrow. Includes downloads of Excel budgets so you canwww.agf.gov.bc.ca/busmgmt/budgets/bud do your own calculations.get_pdf/small_scale/small_scale_Mixed_herb_ www.aec.msu.edu/agecon/aecreports/budWin.pdf gets01.htm //ENTERPRISE BUDGETS AND PRODUCTION COSTS FOR ORGANIC PRODUCTION PAGE 3
  • 4. New Jersey (1996) New Jersey (1996) Available production costs: grain corn, silage Available budgets: dairy goat, spring lamb.corn, soybeans, alfalfa (new seeding), alfalfa (es- Budgets for dairy goat include scenarios of pro-tablished stand). duction levels of 1500, 1800 or 2100 pounds of milk http://aesop.rutgers.edu/~farmmgmt/ne- per doe.budgets/organic.html http://aesop.rutgers.edu/~farmmgmt/ne- budgets/organic.html#liveNorth Dakota (2003) Available budgets: spring wheat, durum, feed Pennsylvania (1999)barley, grain corn, sunflower oil, confectionery Available budgets: egg production (small-sunflower, soybeans, oats, flax, field peas, millet, scale).buckwheat, rye, and rotational green manure http://agalternatives.aers.psu.edu/livestock/fallow. small_scale_egg/small_scale_egg.pdf Has an excellent overview of organic production,crop rotation, and machinery used in organic produc-tion. There are also organic crop budgets from 2000available. www.ext.nodak.edu/extpubs/agecon/ecguides/2003org.pdf Enterprise Budgets and Production Costs Livestock for Organic Production By Holly Born NCAT Agriculture SpecialistBritish Columbia (2002) August 2004 Available budgets: free-range laying hens. ©NCAT 2004 www.agf.gov.bc.ca/busmgmt/budgets/bud- Edited by Paul Williamsget_pdf/poultry/organic_eggs_2002.pdf Formatted by Ashley RieskeCalifornia (2002) Production costs for organic and conventionalmilk. http://californiaagriculture.ucop.edu/0205SO/pdfs/orgmilk.pdf The electronic version of Enterprise Budgets and Production Costs for Organic ProductionIowa (2003) is located at: Available budgets: pork (two-litter pasture HTMLfarrow-to-finish). http://www.attra.ncat.org/attra-pub/enterprisebud- www.extension.iastate.edu/ipic/reports/ gets.html99swinereports/asl-1679.pdf PDF http://www.attra.ncat.org/attra-pub/PDF/enter- prisebudgets.pdfIowa (2003) Available cost information: pork. RL 041/Slot# 264 www.extension.iastate.edu/agdm/livestock/html/b1-80.html Version#081104PAGE 4 //ENTERPRISE BUDGETS AND PRODUCTION COSTS FOR ORGANIC PRODUCTION