2010 Tobacco Budgets

Two production system budgets are estimated for next year. These are the multi-pass machine/bulk barn (MM) and the hand harvest/bulk barn (HH) systems. Both are used in this state. In 2010 the machine/bulk barn (MM) budgets went to a 2 row combine.  As compared to 2009, input costs are projected to be higher for fertilizer costs, and lower for transplants, and higher for capital interest.  This resulted in the same budget cost as 2009.  In 2009, we increased yield to 2400 lbs/acre.

Enterprise budgets are prepared as a reference for the farmer and are a record of the anticipated costs and returns for a particular set of production practices for the crop(s) considered. Farmers, lenders and others use these budgets as a means to evaluate the economics of production. Of course, producers will need to adjust the figures given for the cost inputs for their operation. Enterprise budgets are prepared by the Clemson University Department of Applied Economics and Statistics can be accessed here:

Variable costs are those that are incurred each year the crop is produced and are basically the out-of-pocket expenses for seed, chemicals, fertilizer, labor, machinery and interest. These may vary from year to year, field to field and farm to farm. This is why producers must be aware of their average expense figures for each cost component.

Fixed costs are those incurred even if a crop is not planted. Such things as depreciation and taxes on equipment are fixed costs. Farmers may choose to ignore the fixed cost component for a year or so when planning the farm's crop mix. However, over a period of several years, producers need to be able to cover total costs to maintain an economically viable cropping system. Farmers are also urged to consider various market risk management scenarios to try to capture the highest profit possible.