EconS 450 Crop Enterprise Budget Worksheet (CEBW) Problem Set
(Modified from a worksheet created by Paul Patterson, University of Idaho.)
The following problem set will familiarize the user with the basic features of CEBW, as well as with the optional features. You will initially enter data to replicate the attached enterprise budget for dry beans. The budget will be modified and analyzed using optional features of the program. Save the file to avoid the loss of data. 1. Enter the cost and receipt items for the dry bean budget found on page 3. 2. Add the following headings to the input cost categories (seed, fertilizer, chemicals, custom, irrigation, machinery operating, labor). 3. Calculate breakeven price & yield using Options with a 10% change in yield and a 20% change in price. What is the difference in breakeven price needed to cover total costs when the yield is 10% above the baseline compared to when the yield is 10% below the baseline? What is the difference in breakeven yield needed to cover total costs when the price is 20% above the baseline compared to when the price is 20% below the baseline? 4. Calculate the operating interest using the Options feature. Use 6 percent interest. How many months is the money borrowed on average? Use 5 months in this example. 5. Enter the following machinery cost information, allocate as indicated and copy values. Use a 6% interest rate. Item 160-hp Tractor 6-Row Planter Price $101,000 $16,500 Useful Life 15 12 Salvage Value $20,000 $2,200 Insurance Rate $5/$1,000 $1/$1,000
Allocation: Tractor: 20% to dry beans Planter: 100% What is the annual depreciation from these two pieces of equipment allocated to dry beans?
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6. Enter the following building information, allocate and copy values. Use 7.5% interest. Item Machine Shop Price $40,000 Useful Life 30 Salvage Value $2,000 Insurance Rate $6/$1,000
Allocation to dry beans: 15% Change interest to 6.5% by double clicking on machinery depreciation in budget tab and copy values to budget. 7. Import crop budgets for hard red spring wheat and malting barley (CEBWexercise budgets.cbw) from class web site. http://classes.ses.wsu.edu/EconS450/sp2008-VanTassell/classmaterials.html
8. Enter the following general farm expenses and distribute 15% to dry beans, 40 % to malting barley and 45% to wheat. Diesel $3,000 Gas $ 600 Accounting Fees Tax Fees Office Expenses Shop Utilities Phone per month $250 $200 $150 $650 $ 75
9. Change cost allocation on the tractor and copy values. Dry beans: 20% Wheat: 40% Barley: 25%
10. Use the gross margin breakeven analysis under Options to evaluate dry beans as the base crop and wheat and barley as the alternative crops.
What yield do you need on hard red spring wheat to equal the dry bean gross margin when wheat sells for $8.00 per bushel?
What price do you need on malting barley to equal dry beans gross margin when malting barley yields 60 cwt per acre?
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415 Dry Bean Budget/Publication ID: Number of Acres for this Crop: Quantity per Acre Dry Bean 1 1 Unit of Measurement bu Price/Cost per Unit Value Per Acre Total Value
Item VALUE OF PRODUCTION Dry Beans Gross Returns OPERATING COSTS Bean Seed Dry Nitrogen Dry P205 Zinc Sonalan Treflan 4EC Custom Operations Custom Fertilize Custom Cut/Rake Custom Combine Water Assessment Irrigation Repairs Irrigation Labor Crop Insurance
22.00
$26.00
$572.00 $572.00
$572.00 $572.00
100.00 25.00 100.00 5.00 1.50 0.50 1.00 1.00 22.00 1.00 1.00 3.85 1.00
lb lb lb lb qt qt ac ac cwt ac ac hr ac
$0.27 $0.31 $0.19 $0.20 $7.25 $5.00 $4.75 $20.00 $1.41 $24.70 $2.18 $7.80 $10.50
$27.00 $7.75 $19.00 $1.00 $10.88 $2.50 $4.75 $20.00 $31.02 $24.70 $2.18 $30.03 $10.50
$27.00 $7.75 $19.00 $1.00 $10.88 $2.50 $4.75 $20.00 $31.02 $24.70 $2.18 $30.03 $10.50
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