The type of budget provided in this section is the gross margin budget. These Farm Enterprise budgets provide a guide to the relative profitability of similar enterprises and an indication of the different management practices used.

The aim of these budgets is to provide producers with an additional planning tool to help evaluate options. The budgets presented are meant to be a projection of price expectations in the near future, rather than a statement of the recent past.

It is extremely difficult to accurately predict future prices and other  variables. However, by using the best available information, it is still better to evaluate your options by making your own projections and combining them into a business plan for your property. These budgets will help you in developing your own budgets.

These budgets need to be applied carefully when used to decide a farm’s overall enterprise mix. If major changes are being considered, more comprehensive budgeting techniques are required to indicate the real profitability of the situation.