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Budgeting for Specialty Crop Success

Jim Rogers Agri-business, Trade

By Clint Thompson

Budgeting
Photo by Pixabay on Pexels.com

At a time when input prices are historically high and availability a serious concern for specialty crop producers, growers need to ensure budgeting is a priority for the spring season.

Jessie Rowan, Alabama regional Extension agent, who specializes in commercial horticulture and farm and agribusiness management, discusses the importance of understanding and planning for the different expenses.

Jessie Rowan

“Budgeting is a really good management tool to have, and it can provide a lot of answers to questions you have about your operation. In your operation, no matter what size you are, you want to use the resources you have to the best of your ability. Budgeting can really help you determine the viability of your operation. You need to be able to pencil in a profit before you even plant or harvest,” Rowan said. “You know that weather can be extremely unpredictable. So, there’s enough things outside of your control that having a plan to be profitable from the get-go is crucial.

“Another one of the reasons why you should budget in your vegetable production is being aware of those financial effects and being better able to control your spending. This can lead to you making better financial decisions for your farm which can lead to profitability. That’s the really big why. You’re doing this so you can better plan for your operation, so you can better plan for profitability.”

Expenses may occur that growers had not planned for, such as increased diesel expenses and a spike in fertilizer costs. According to the United States (U.S.) Energy Information Administration, diesel prices were an average of $5.18 across the U.S., an increase of $2.02 from a year ago.

 “There are going to be expenses that pop up. Being prepared and at least knowing the minimum of what you’re going to spend or at least having an expected amount of expenses listed out, that just helps you better plan for your expenses and for those unpredictable things that may pop up,” Rowan said.