The “Whole Firm” approach was used to create these enterprise budgets. This means that each budget was within a venture that consisted of multiple enterprises. An example demonstrating why this is important is the cost per pound for producing lettuce in a 40 acre field on a 200 acre farm could be substantially different than for producing a single 4’ X 100’ bed by a firm operating on half an acre. Although some costs such as seed and fertilizers may be similar for the two operations, one would expect labor costs to be substantially different. Therefore, it is important to know the assumptions made when an enterprise budget was created in order to determine its suitability for use by an individual producer.

The cost of marketing is a key consideration when determining an enterprise’s profitability. Excluding it in the decision making process may cause costly management mistakes. Since direct marketers often sell more than one type of produce at each of the markets they use, allocating marketing expenses becomes important. Just like for production, it is important to know the marketing assumptions to evaluate the suitability of a given enterprise budget for planning purposes.  (Marketing Calculator)

Since these enterprise budgets were created using a “Whole Firm” approach, a description of the operation modeled is provided so their suitability for use can be determined. The inputs can be modified for budgets in the spreadsheet format.

Quarter Acre Farm

This model includes Tomatoes, Bell Peppers, Lettuce, Peas, Green Beans, Broccoli, Cabbage, Cauliflower, Sweet Corn, and Onions produced in 16 beds that were four feet wide by 100 feet long. If the beds are placed two feet apart, 72 beds can be produced on one acre.

Produce in this model was marketed at a farmer’s market located 30 miles from the farm’s site. Some produce was sold via a Community Supported Agricultural (CSA) contracts. Labor for harvesting and marketing was valued at $20 per hour and $0.50 per mile was used as transportation costs. Stall rent at the farmer’s market was $15 per day for 28 days. Marketing costs totaled $4,060 on projected sales of over $32,000 (approximately 13% of gross revenue) and were allocated among enterprises based on the value of the produce sold.  

Half Acre Farm

Shallots, garlic, squash, turnips, and rutabagas are the crops produced in the half acre model. These crops are produced in four by 100 foot beds spaced two feet apart. Nearly 84% of this farm is planted to squash which accounts for over half of the gross revenue.

Produce in this model is sold at two farmer’s markets, by consignment retailer, and direct to institutional buyers. The total marketing costs are estimated at $2,810 on projected sales of $13,413 of product (approximately 21% of gross revenue).