Ag Budget Calculator Tutorial 1: Determining the Enterprise Data Needed in Budgeting
Department of Agricultural Economics
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11/03/2020
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Glennis McClure, extension educator, farm and ranch management analyst.
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- [00:00:04.259]Glennis McClure: Welcome to tutorial one on the ag budget calculator program. We're calling it ABC for short. This tutorial will guide you in getting started with ABC.
- [00:00:17.970]Glennis McClure: The ag budget calculator will guide producers in entering their field operations equipment material costs projected revenue and other expenses, step by step.
- [00:00:29.730]Glennis McClure: We are planning various helpful in products or reports.
- [00:00:33.780]Glennis McClure: The first report to be generated will be an enterprise budget report that will provide projected cash and total economic costs or production information and projected net returns
- [00:00:45.900]Glennis McClure: It'll be easier than ever now to create customized enterprise budgets to match your cropping systems and operations.
- [00:00:55.980]Glennis McClure: So there are many reasons why someone should prepare enterprise budgets and just really quickly. I'll share a few here now. So first one would be to compare profitability potential between all of your different crop enterprises.
- [00:01:11.010]Glennis McClure: To determine breakeven levels above operating costs and ownership costs or a combination of the two including
- [00:01:19.770]Glennis McClure: What does it take to cover your cash costs and what does it take to cover all of your costs and to assist you in marketing and pricing decisions and then to tweak production practices as needed. Based on this information used as a decision tool.
- [00:01:39.810]Glennis McClure: The ABC program will allow you to customize your budgets is designed to be user friendly and
- [00:01:47.970]Glennis McClure: You're going to use your regular email as the user ID and then you'll create a password that only you know and you can use you and L has no plans to use your individual enterprise budget information and be able to access access your account.
- [00:02:06.690]Glennis McClure: So I'd really like for you to think about
- [00:02:09.690]Glennis McClure: As you get started, what you need to have to be prepared with this. So first off, have an idea of the crops that you want to create enterprise budgets for for the coming year. What are you planning to produce
- [00:02:21.300]Glennis McClure: Where are you going to plant these different
- [00:02:23.490]Glennis McClure: Crops crop enterprises and so on. So you can enter all of the crops you produce and you can enter them one by one. Or let's say you can, you might want to enter all of your soybeans in one. We'll talk about that.
- [00:02:36.450]Glennis McClure: So make a list of those crops for the coming year irrigated and dry land crops really should be entered separately. Because obviously there's different production practices and costs that go into trial and versus irrigated field.
- [00:02:51.810]Glennis McClure: So prepare that list of your different fields and farms of crops that you're going to produce
- [00:02:57.180]Glennis McClure: Do you perform the same cropping practices for each crop or very those practices, depending on the farm or the field.
- [00:03:05.610]Glennis McClure: Do yields vary widely from farm to farm or field to field. How do your practices as as an expenses Barry on own ground versus rented ground another good reason to maybe make a separation.
- [00:03:19.920]Glennis McClure: So again, you can enter you know one enter soybean enterprise one corn enterprise, let's say one Hey enterprise or any of the enterprises that you have
- [00:03:29.280]Glennis McClure: But chances are you're going to want to make a separation. And here's an example. Here's an example of how you would title.
- [00:03:37.320]Glennis McClure: Or enter these different enterprises. So you might have dryland corn on your cold place that's know tilde and it's a corn, soybean rotation typically
- [00:03:46.800]Glennis McClure: That could be one enterprise irrigated corn on the north quarter to conventionally tailed and it's continuous corn perhaps
- [00:03:54.720]Glennis McClure: Then you have an irrigated field that's on a rented ground. So the Jones place and it might be conventional tailed and corn, soybean rotation.
- [00:04:04.260]Glennis McClure: Then you have your soybeans dry land at home no tail soybeans irrigated uncle Jim's rented field and you have an alpha, alpha enterprise on your home place that's on dry land. So just an example of how you might think in terms of
- [00:04:21.870]Glennis McClure: Entering new different enterprises.
- [00:04:27.510]Glennis McClure: So we've talked about the cropping system information, we'll, we'll get into what we need for annual rates and prices. So you want to have a good idea of like what your fuel prices will be that will be operating with with with that.
- [00:04:42.390]Glennis McClure: Probably average price for the coming year will be also interest rates. So we'll talk about where those go into the system. And once those are entered. You don't have to keep entering them over again.
- [00:04:54.120]Glennis McClure: So we'll show you that same way with field operations field operations. Obviously we build this program so that that's kind of how we want you to think it's like what do you do
- [00:05:05.970]Glennis McClure: You know, what's the process to raise your corn, raise your soybeans raise any crops. Okay.
- [00:05:12.660]Glennis McClure: What are your field operations, and that includes your machinery and implement costs. So you'll want to have handy.
- [00:05:19.740]Glennis McClure: Your depreciation schedule so that you as you're entering machinery, you'll know well yeah I purchased that how many years ago.
- [00:05:28.710]Glennis McClure: And maybe you'll probably want to have a pretty good idea of list price because there's formulas in the background, we use engineering formulas to do to help determine
- [00:05:38.790]Glennis McClure: Depreciation repairs efficiency fuel usage, that type of thing. But you'll need to have some information on your particular machinery compliment to be able to to enter that into the system.
- [00:05:52.860]Glennis McClure: And then there's material inputs and service costs, of course, you'll want to have a pretty good idea of what your fertilizer costs.
- [00:06:01.020]Glennis McClure: Are, are there, they will be same way with your pesticides fungicides.
- [00:06:05.970]Glennis McClure: And seed everything so have a pretty good idea of what costs are going to go into the budget for the year service cost might be if you hire custom help
- [00:06:16.320]Glennis McClure: Or you have, you know, your field sprayed. What's that going to cost you. And now go in as a cost per each enterprise accordingly.
- [00:06:25.440]Glennis McClure: Of course, irrigation system expenses. Again, the depreciation schedule could be very useful for that as you enter and identify the different
- [00:06:34.470]Glennis McClure: Crops and with their irrigated what those expenses would be and then yield and revenue projections. So you probably have a pretty good idea of what your typical yield is and you can
- [00:06:46.860]Glennis McClure: Start by entering some prices you know projected prices as we go along to enhance the program. And one of the modules, we're working on is a risk module where you might look at different yield.
- [00:07:00.000]Glennis McClure: Possibilities and see what would happen if, as the yield changes. But for now, just having a good idea of yield and revenue.
- [00:07:09.390]Glennis McClure: Is helpful and then general farm overhead expenses overhead.
- [00:07:14.640]Glennis McClure: Things like, Office Expenses your general insurance for the farm supplies accounting
- [00:07:20.970]Glennis McClure: Obviously those there's those kinds of expenses that really do need to get charged back to all of your enterprises and so we want to have a pretty good idea of, of what those are and how we might enter those
- [00:07:36.210]Glennis McClure: So let's look at, we're going to look at. Now some of the ABC program screens and when you first go into the ABC program link.
- [00:07:44.460]Glennis McClure: You'll be asked to enter your email address and choose a password that is known only to you.
- [00:07:50.430]Glennis McClure: You'll need to remember the email address and password so that you can return to the ABC program to view and update your enterprise budgets on an ongoing basis.
- [00:08:00.870]Glennis McClure: After you enter this information you'll receive an email, will you where you'll be able to you'll want to click to activate your account.
- [00:08:12.150]Glennis McClure: So each time you enter the ABC program you'll be asked to enter that email and enter that password. And keep in mind the university will not
- [00:08:20.850]Glennis McClure: Be able to extract and use your data and see your budgets, we cannot use them for research and information as if we really have no way of verifying that information has been correct. So the accuracy of how you enter the program.
- [00:08:36.630]Glennis McClure: How you enter information at the program is really up to you as the user of the system.
- [00:08:45.450]Glennis McClure: So the current a human L budgets can be found online. So each year. We've prepared University budgets using Excel spreadsheet format.
- [00:08:56.340]Glennis McClure: And will continue to prepare crop budgets and update these each year, using the ag budget calculator, from now on,
- [00:09:03.240]Glennis McClure: You can call up those university crop budgets that most closely fit your crop production practices and you can import those in to your system. And then you could go in and make changes.
- [00:09:17.130]Glennis McClure: And edit those quite easily and basically create your own enterprises from those. Okay, or you can start from scratch and create your own
- [00:09:29.670]Glennis McClure: To your own from the very start.
- [00:09:37.980]Glennis McClure: This is just a picture of the university crop enterprises and so there's a long list we have for 2021 will have
- [00:09:45.870]Glennis McClure: At three different crop budgets entered and this just starts off with so they showing you some of the alpha, alpha budgets that we will have. And again, this these are identified, just the 2020 budgets for now in this screen, but we'll be updating
- [00:10:01.290]Glennis McClure: Very, very quickly, so
- [00:10:04.500]Glennis McClure: You can take a look and you can view those and see, like, what is a fit for you and then you could actually copy those and copy those over into your system just an example of what that screen looks like right now.
- [00:10:20.010]Glennis McClure: So there are different help messages throughout the program as well. Notice that I for information. So if you get stuck on something and want to see an explanation. Just click on the AI to help with more information.
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