Economics

Enterprise Budgets:

Why use enterprise budgets?
Budgeting provides producers a method of estimating profitability prior to assets being committed. Their results can be used to determine which enterprises an operation should eliminate. Enterprises which are not profitable on paper are rarely profitable in practice. Budget results can also be used to allocate land, labor, and capital resources by providing information on how profitability compares between enterprises. Finally, their results can be used to estimate cash needs to aid in financial planning.

Horticulture Budgets:
Two budgeting aids are available to horticultural producers from the University of Nebraska. The first is a set of completed budgets for 15 horticultural crops using locally provided input data. The second is a marketing calculator, a spreadsheet for calculating and analyzing costs associated with direct marketing.
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In recent years, Americans, including Nebraskans, have become increasingly concerned about the safety and quality of the food they eat. This has led to a rapidly growing trend in local food marketing. Nationally, local food sales have quickly grown to be a 5 billion dollar industry and are expected to grow to $7 billion by 2011. Organic food sales have grown at a 20% annual rate since 1990.

This demand is creating opportunities for Nebraskans to start, expand or diversify farming operations to grow food for local markets. Some Nebraskan growers have already taken advantage of this opportunity. The latest Agriculture Census reports that in 2007 there were 23,646 acres of vegetables in Nebraska with 65% of the acres devoted to the fresh market.

Because a successful horticulture operation focused on a local market requires dramatically less land (successful operations range in size from less than an acre to a few hundred acres) than in conventional farming, it is easier to acquire the capital needed to start an operation. The NLFN hopes to facilitate the growth of locally grown foods by providing important information to those interested in local food production. In the future, this page will contain information on the economic costs of starting and operating a farm for certain types of vegetables. Later other value added products such as nursery crops, fruit and nut trees, and niche market meats will be added.

"Horticulture is currently the strongest growth market in U.S. agricultural production"
Keith Collins, Chief Economist, USDA, 2006

• Market Cost Calculator

Business Planning

Business planning should be your first step to starting a business. It is important to identify the bottom line and input costs before you begin. You may have the best product in the world but without a good business plan, you may not succeed. Below you will see several links that will provide you with more information on developing a business plan.

• NebraskaEDGE

  The NebraskaEDGE (Enhancing, Developing and Growing Entrepreneurs) is part of the Center for Applied Rural Innovation (CARI) at the University of Nebraska-Lincoln. It is a community-based entrepreneurial training program designed to encourage the expansion of small businesses, including agricultural operations.

• The Entrepreneur

  This is a tool that can be used to gain a better understanding about what a business plan entails. Read about the different parts of a business plan and why each piece is essential.

• Purdue Business Plans

  Start writing your business plan with INVenture . . . a business planning tool to successfully launch a new venture (formerly known as the AICC Business Planner). This is a great tool that allows you to actually add information into a business plan format and save it for yourself.