Assisting farmer clients determine their cost of production and per-acre profits is something many crop input supply dealers and consultants do. But as the economics of both farming and the input and service industry become more and more challenging it seems important to review these methods for helping crop producers know their true costs of production and evaluate and improve their profitability. This presentation will review the objectives of crop enterprise budgeting, the components of an enterprise budget, how the value of each component is determined and will briefly describe the Agricultural Budget Calculation Software (ABCS) for use in preparing crop enterprise budgets.

Enterprise budgeting can be used as a tool for determining and evaluating profitability from any agricultural production enterprise. An enterprise is any distinct component of the over-all farm business such as the corn production enterprise or the milk production enterprise. While these components are usually inter-related, they can and should be evaluated individually for their economic merits. In developing an enterprise budget, the costs of production are determined and then subtracted from the revenue received to determine the amount of profit or loss. For crop enterprise budgets, costs and returns are usually assigned on a per-acre basis, but can also be calculated on a per-unit of yield basis such as per-bushel or per-ton.