Alfalfa-Timothy Hay Enterprise Budget

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Alfalfa-Timothy Hay Enterprise Budget

Author:	John Molenhuis - Business Analysis & Cost of Production Program Lead/OMAFRA
Creation Date:	10 March 2003
Last Reviewed:	3 March 2008

Revenue	Revised January 2008 Sample cost per Acre	Your Farm Budget
Expected Yield (tonnes/ac)	3.50
Expected Price ($/tonne)	110.00
Total Expected Revenue (Yield x Price)

Expenses	Revised January 2008 Sample cost per Acre	Your Farm Budget
Seed - Alfalfa 12 lbs/acre and Timothy 4 lb/ac	48
Seed - Other seed
Inoculant	1
Fertilizer - 50 kg/ac 8-32-16	25
Fertilizer - 130 kg/ac 0-0-60 (applied In Fall)	50
Fertilizer - Other
Herbicide - Glyphosphate	9
Herbicide - 24D-B	14
Insecticides
Crop Insurance	3
Custom Work #1 - Fertilizer application	18
Custom Work #2 - Pesticide application	18
Custom Work #3 - Bale wrapping	31
Twine
Storage
Other
Fuel	20
Machine Repair & Maintenance	18
Bldg. Repair & Maintenance
Rent & Labour	34
General Variable Costs
Interest on Operating Capital	18
Total Variable Costs	306

Gross Margin (Revenue - Variable Costs)

Fixed Costs	Revised January 2008 Sample cost per Acre	Your Farm Budget
Depreciation	35
Interest on Term Loans	26
Long-Term Leases
General Fixed Costs	8
Total Fixed Costs	69
Total Expenses	375

Annual Production Costs

Fixed Costs	Revised January 2008 Sample cost per Acre	Your Farm Budget
Establishment year expenses over 4 years (less Est. year sales)	50
Fertilizer - 10 kg/ac 0-46-0	5
Fertilizer - 50 kg/ac 0-0-60 (applied in fall)	19
Fertilizer - Other fertilizer
Herbicide - Broadleaf Herbicides
Herbicide - Other weed control where needed
Insecticides
Crop Insurance	11
Custom Work #1 Fertilizer application	18
Custom Work #2 Bale wrapping	62
Twine
Storage
Other
Fuel	16
Machine Repair & Maintenance	20
Bldg. Repair & Maintenance
Labour	34
General Variable Costs
Interest on Operating Capital	7
Total Variable Costs	242

Gross Margin (Revenue - Variable Costs)

Fixed Costs	Revised January 2008 Sample cost per Acre	Your Farm Budget
Depreciation	35
Interest on Term Loans	26
Long-Term Leases
General Fixed Costs	8
Total Fixed Costs	69
Total Expenses	311

Breakeven Price on Your Farm is (Total Expenses/Expected Yield)

Allocation of General Variable and Fixed Costs

General Variable and Fixed Costs or general overhead costs are those whole farm costs that can be difficult to allocate to a specific enterprise. These costs will show little or no change whether one crop or another is grown. That is to say your crop mix choice should be the same after allocating general overhead costs as it was before they were added. This table allows you to allocate these overhead costs and transfer them to the budget to arrive at a total cost of production.

Cost Item	Whole Farm $	Percent Allocated to Hay	Total Dollars Allocated to Hay	Per Acre Costs for Hay
*Example: 100 acres of Hay* *Legal and accounting fees*	*$1500.00*	*20%*	*$300*	*$3.00*
General Variable Costs	$	Hay	Hay	Hay
Advertising
Electricity and Heating Fuel
Telephone
Memberships / Subscription Fees
Office Expenses
Legal and Accounting Fees
Motor Vehicle Expenses
Small Tools
Soil Testing
Licenses/permits
Other general variable costs
Total General Variable Costs
General Fixed Costs
Property Taxes
Other Insurance Premiums
Other General Fixed Costs
Total General Fixed Costs
Transfer General Cost totals to the Budget

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