Farm Planning Budgets

Virginia Cooperative Extension - Virginia State University

Type: PDF
Knowledge level: Introductory

Farm Table says:

Good introduction to difference budgeting methods and use of enterprise budgets.

Introduction for new and beginning farmers

A complete farm financial system is composed of a set of financial statements and planning budgets.

The four planning budgets explained here to record financial details are:

  1. cash flow budgets
  2. partial budgets
  3. whole farm budgets
  4. enterprise budgets

Cash Flow Budget

A cash flow budget is a summary of projected inflows and outflows over a given period of time. Its purpose is to estimate the amount and timing of future borrowing needs and demonstrate the farm’s ability to repay debts in a timely fashion.

Whole Farm Budget

The whole farm budget is constructed to include the expected costs, revenues, and profitability of each enterprise that compose the overall farm business.

Partial Budget

The purpose of the partial budget is to outline the available options by comparing the profitability of one alternative (usually the current situation) to the profitability of a proposed alternative.

Enterprise Budget

A farm enterprise budget is the organization of revenues, expenses, and profit for a specific farm enterprise that is constructed on a per-unit-of production basis.

2016 - United States - Virginia Cooperative Extension - Virginia State University
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