EC872 Crop Budgets Nebraska – 2010


Copyright 2010 University of Nebraska


Each budget consists of five sections: 1) The heading, 2) List of representative field operations, 3) List of materials and services used, 4) Operations and interest tabulations, and 5) Overhead costs including real estate taxes and opportunity charges. The budgets are presented in a worksheet format with a ''Your Estimate'' column for recording modifications in costs. The heading consists of the crop name, source, amount, and application method of water, operating system description, and yield goal and yield estimate. The list of representative field operations is organized in a table with columns for the names of the operations, Times or Quantity, Labor, Fuel and Lube, and power source and implement costs for both Repairs and Ownership. Times or Quantity is typically in acres with a decimal denoting where an operation is done on a fraction of acres or where it represents the probability of an operation being done. Those operations that are done multiple times, swathing the several cuttings of hay for example, show the number of times. Other units used are bushels, hundredweight, tons, and acre inches. Labor costs for each operation were calculated from machinery accomplishment rates and adjusted for additional time required for getting machinery ready, adjusting machinery, and handling fertilizer and other supplies. The estimated costs for completing these operations are multiplied times the number in the ''Times or Qty'' column, the product of which is multiplied times the hourly wage ($12 per hour) and labor factor. Fuel costs also use machinery accomplishment rates as well as estimated fuel consumption rates to determine fuel use. This is multiplied by a lube factor and the price of energy which is $2.00 per gallon for diesel and $0.783 per kwh for electricity. Repairs and depreciation costs were estimated using functions and factors from the Agricultural Engineer's Yearbook which is published by the American Society of Agricultural and Biological Engineers. It requires making assumptions about the size and age of the equipment. It was assumed that machinery chosen was fully utilized. The age used for all field machines except irrigation equipment (pivots and pipe) was five years. The age assumed for irrigation equipment was ten years. The age assumed for all power units except diesel pumping engines and a small tractor used for spraying was five years. The age assumed for the diesel pumping engines was three years and the small spraying tractor ten years. Costing functions were based on the current list price of comparable items. For self propelled items, such as combines, the power unit repair and ownership costs estimates cover the principle machine and the implement costs covers the head. Data used for calculating power units’ cost are in Table 1 and machinery operations’ costs are in Table 2. Irrigation costs were calculated using engineering performance standards and typical water application rates which will depend on the rainfall area. Power costs for irrigation refer to the pump and power unit and implement costs are for the delivery system (pipe or pivot). Depreciation and interest for the well are budgeted with land costs.