Farm Budgeting




Source of Digital Item

National Agricultural Library



THE FARMING INDUSTRY of the United States loses many hundred millions of dollars each year because production is overexpanded along some lines and underexpanded along others. These ups and downs in agricultural production are partly the result of changes made by farmers in acreages of crops and numbers of livestock. Changes of this kind are necessary and unavoidable, but too often they are overdone in some lines and underdone in others. Decisions as to these changes are often based upon the prices at or immediately before planting or breeding time and upon the crop yields and livestock production of the preceding season. The adaptation and application of the budget method, used in other business undertakings, is suggested as one way for farmers who act independently to meet the situation.

A farm budget is a carefully worked-out plan based on estimates as to how well a particular combination of crops or combination of crops and live- stock will pay. These estimates are based upon the available information as to what the prices and crop and livestock production are likely to be during the year or period of years just ahead. Although prices, crop yields, and livestock production can not be forecast exactly, they can be foretold within broad enough limits to make it profitable to organize care- fully and to focus attention upon the best available information relating to them. A method of doing this is outlined in this bulletin.

First, the method of procedure in making a budget is described. Next, the use of budgets in deciding upon the crops and livestock for the coming year and in keeping a profitable system of farming in mind is described. Finally, the information needed is mentioned, some of the sources of this information are listed, and forms to be used in making a budget are shown.


Farm Budgeting


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