If you’ve started to prepare your taxes, you’ve probably been thinking a lot about your farm’s finances and what you can improve on next season. If you haven’t been keeping careful records of each expense, you may find that you’re missing key pieces of information that you’ll need to create your 2018 budget.
To help you create a budgetary plan for a successful 2018 season, we’ve compiled a list of where to find your state’s average cost of production.
Budget as a Baseline
Creating a budgetary plan is crucial to your farm’s livelihood. It helps you make more informed decisions, like knowing what seed to buy or whether or not applying fungicide on that field mid-season is going to net a positive return on investment (ROI). And it helps you become a better marketer, because you know the price you need to sell your grain at to cover costs and make a profit.
Think of your budget as the baseline for your operation. As the season progresses, you’ll probably have a few extra, unplanned expenses. You might also find that sometimes, you’ve overestimated how much you thought you’d spend in a certain area. Both of these things are okay! Budgets aren’t always static, which means that you can and should be updating them throughout the season to accurately reflect your cost of production.
A Plan for Your Farm
Having a budget also allows you to start planning out what inputs and supplies you’ll need for the upcoming season, which means that you’re better equipped to make informed decisions that contribute to making more money, not just higher yields.
Find Your State’s Average Cost of Production
If you already know your operation’s true cost of production, we recommend using that information as a base when creating your 2018 budgetary plan. If you don’t have that information, you can find your state’s average cost of production below. Please keep in mind that if these averages do not apply to your unique operation, they can still be used as a benchmark when creating your plan.
Don’t see your state? We recommend asking your local extension office if they have your state’s average cost of production information available.
Visit FarmLogs Crop Marketing Education page to learn more about grain marketing!