Kick 2009 Off Right: Plan Ahead

January 1, 2009 06:00 PM

Resolution No. 1: Prepare a 2009 Crop Budget

Sara Muri, AgWeb Business & Crops Online Editor
Start your year off right by planning for your next round of crops. Since the winter weather probably has you indoors, now is a great time to pencil out your plan for the spring.
Plan Your Attack
Robert Klein, University of Nebraska-Lincoln extension cropping systems specialist, says with the currently high input costs, farmers need to know their break-even costs for production. "Producers want to know what they've got in that crop,” he says.
A great way to know the exact cost of production is to use a crop budget. Many universities (such as the ones listed below) offer downloadable crop budgets. Klein says farmers can fill these out with their own production costs, so they have their farm-specific figures.
"Now is a good time to start the budgeting process,” Klein says. "The sooner, the better.”
He says as input costs change, as fertilizer and fuel has done during the past few months, farmers should revisit their budgets and alter as necessary.
Additionally, budgets are useful, and sometimes required, before farmers can obtain loans for their operating costs. Klein says bankers want to know a farmer's cash flow, especially during these shaky financial times.
Evaluate Your Options
By filling out a budget, Klein says, farmers can have a clear idea of where they have production advantages, such as with different crop rotations or seed genetics.
As farmers weigh their different seed options, Klein says, they should consider different hybrids and genetics. "Make sure you're selecting the best genetics out there,” he says. "You can really lower your production costs if you increase your yields.”
Klein says having various genetics on your farm can also help you spread your risk. "You never know what Mother Nature will throw at you,” he says. "It helps to have some diversification.”
Consider Your Outside Forces
With many of the budgets, farmers can input their variable factors such as farm program payments.
Klein says farmers should become familiar with the new farm programs and changes to existing programs. "There are a number of changes this year,” he says. "You should be sure to see how it affects your operation.”
Downloadable Crop Budgets
Ohio Enterprise Budgets, The Ohio State University
Nebraska Crop Budgets, University of Nebraska-Lincoln
Farm Management Planning Guides, North Dakota State University
Illinois Crop Budgets, University of Illinois

You can e-mail Sara Muri at

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