The purpose of this assignment is to (a) lcam how to prepare a whole farm budget for a hypothetical farming situation. (b) use the whole farm budget to project profits and net farm income, and (c) estimate requirements and availability of key resources such as land, labor and feed. Step 1: Select Possible Enterprises Your farm is located in the Midwest. The following enterprises are available: Crops: Corn, grain sorghum, wheat, alfalfa hay and sunflowers Livestock: Beef cow/calf, ewe flock, dairy herd, stocker steers Step 2:Resources and Constraints You have the following resources available: Land 2,400 acres that can be used for any of the crops listed in Step 1, and 800 acres that can be used for pasture, only. Buildings and Machinery You have machinery and buildings for any of the enterprises listed in Step 1. Labor You have a maximum of 8,100 hours of labor available, as a fixed resource (3 full-time people) Feed All corn and hay fed to livestock must be produced on the farm. Step 3:Enterprise Budgets Your enterprise budgets show that the estimated gross margins and labor requirements are as follows: Crops (per acre) Com Sorghum Wheat Alfalfa Hay Sunflowers Yield 130 bu. 80 bu. 50 bu. 3.4 tons 1600 pounds Price $5.50 $140 $5.80 $464 $6.75 $338 5.25 $400 $715 $476 Gross revenue Operating costs (excluding labor) Gross margin per acre Labor required (hours / acre) 445 $270 284 $180 160 $178 280 $196 200 $200 4.0 2.2 1.6 3.1 2.0 Dairy herd Stocker steers Lhead 800 Ewe flock Lewe 168 Beer Cow low unit 500 Low 18,000 S1.10 3.21 $1.25 SO S500 $100 $1.50 $12 $264 5880 $4.280 $725 $540 $490 $140 $2,800 2.1 Livestock Pounds to sell Selling price Other revenue Gross revenue Operating costs (including feed and excluding labor) Labor required (hours) Feed required per unit: com (bu.) hay (ton) pasture (acres) 8 5 80 0 10 140 4. 0 2.1 0.4 10 0 2.0 3.5 0.3 Step 4: Sum all enterprises Indicate below how many units of each enterprise you want to produce, then multiply by the gross margin per unit to get the total gross margin for each enterprise. Include at least three crops and one livestock enterprise. Remember, you have only 2,400 acres of cropland, 800 acres of pasture, and 8,100 hours of labor. Gross Operating Labor Total Total Number Revenue Costs Hours Total Gross Operating Hours Enterprise of Units Revenue Costs of Labor Com acres $715 $445 4.0 per unit per unit per Unit acres S464 $284 2.2 Sorghum Wheat acres $338 $160 1.6 acres Hay $476 $280 3.1 Sunflowers acres S400 $200 2.0 Beef cow/calf COWS $725 $490 8 Ewe flock ewes $264 S140 5 Dairy cows S4280 $2,800 80 Stocker steers head $880 $540 2.1 Whole Farm Totals acres (crops only) (2,400 maximum $ hr. (8,100 max.) Step 7: Summary Find the expected Net Farm Income for your farm plan. Whole Farm $16.500 Total gross revenue from all enterprises (from Step 4) Plus other farm income (custom farming) Total gross revenue Total operating costs for all enterprises (from step 4) s Ownership costs Interest on long-term loans Insurance, property taxes, etc Cash rent Wages and benefits Depreciation 65,000 26,100 225.000 50,000 46,500 Total Costs Net Farm Income The purpose of this assignment is to (a) lcam how to prepare a whole farm budget for a hypothetical farming situation. (b) use the whole farm budget to project profits and net farm income, and (c) estimate requirements and availability of key resources such as land, labor and feed. Step 1: Select Possible Enterprises Your farm is located in the Midwest. The following enterprises are available: Crops: Corn, grain sorghum, wheat, alfalfa hay and sunflowers Livestock: Beef cow/calf, ewe flock, dairy herd, stocker steers Step 2:Resources and Constraints You have the following resources available: Land 2,400 acres that can be used for any of the crops listed in Step 1, and 800 acres that can be used for pasture, only. Buildings and Machinery You have machinery and buildings for any of the enterprises listed in Step 1. Labor You have a maximum of 8,100 hours of labor available, as a fixed resource (3 full-time people) Feed All corn and hay fed to livestock must be produced on the farm. Step 3:Enterprise Budgets Your enterprise budgets show that the estimated gross margins and labor requirements are as follows: Crops (per acre) Com Sorghum Wheat Alfalfa Hay Sunflowers Yield 130 bu. 80 bu. 50 bu. 3.4 tons 1600 pounds Price $5.50 $140 $5.80 $464 $6.75 $338 5.25 $400 $715 $476 Gross revenue Operating costs (excluding labor) Gross margin per acre Labor required (hours / acre) 445 $270 284 $180 160 $178 280 $196 200 $200 4.0 2.2 1.6 3.1 2.0 Dairy herd Stocker steers Lhead 800 Ewe flock Lewe 168 Beer Cow low unit 500 Low 18,000 S1.10 3.21 $1.25 SO S500 $100 $1.50 $12 $264 5880 $4.280 $725 $540 $490 $140 $2,800 2.1 Livestock Pounds to sell Selling price Other revenue Gross revenue Operating costs (including feed and excluding labor) Labor required (hours) Feed required per unit: com (bu.) hay (ton) pasture (acres) 8 5 80 0 10 140 4. 0 2.1 0.4 10 0 2.0 3.5 0.3 Step 4: Sum all enterprises Indicate below how many units of each enterprise you want to produce, then multiply by the gross margin per unit to get the total gross margin for each enterprise. Include at least three crops and one livestock enterprise. Remember, you have only 2,400 acres of cropland, 800 acres of pasture, and 8,100 hours of labor. Gross Operating Labor Total Total Number Revenue Costs Hours Total Gross Operating Hours Enterprise of Units Revenue Costs of Labor Com acres $715 $445 4.0 per unit per unit per Unit acres S464 $284 2.2 Sorghum Wheat acres $338 $160 1.6 acres Hay $476 $280 3.1 Sunflowers acres S400 $200 2.0 Beef cow/calf COWS $725 $490 8 Ewe flock ewes $264 S140 5 Dairy cows S4280 $2,800 80 Stocker steers head $880 $540 2.1 Whole Farm Totals acres (crops only) (2,400 maximum $ hr. (8,100 max.) Step 7: Summary Find the expected Net Farm Income for your farm plan. Whole Farm $16.500 Total gross revenue from all enterprises (from Step 4) Plus other farm income (custom farming) Total gross revenue Total operating costs for all enterprises (from step 4) s Ownership costs Interest on long-term loans Insurance, property taxes, etc Cash rent Wages and benefits Depreciation 65,000 26,100 225.000 50,000 46,500 Total Costs Net Farm Income