DOC

Peach production Budget

By Ernest Ramos,2014-08-03 06:41
7 views 0
Peach production Budget http://aede.osu.edu/Programs/FarmManagement/Budgets/index.htm Ohio PEACH PRODUCTION Land Preparation (Year 0) 1 BUDGET 1 Acre ITEM EXPLANATION PRICE PER YOUR UNIT BUDGET VARIAB..

Peach production Budget

    http://aede.osu.edu/Programs/FarmManagement/Budgets/index.htm

    Ohio

    PEACH PRODUCTION 1 Land Preparation (Year 0)BUDGET

    1 Acre

    ITEM EXPLANATION PRICE PER YOUR

     UNIT BUDGET

VARIABLE COSTS 2 Fertilizer

     N 50lb $0.23/lb $12 ____________

     PO 135lb 0.28/lb 38 ____________ 25

     KO 160lb 0.13/lb 21 ____________ 2

     Lime 1000lb 14/ton 7 ____________ 3 Herbicides 15 ____________

     Cover Crop (Fescue) 15pounds 1.5/lb 23 ____________

     Fuel, Oil, Grease 9 ____________

     Repairs 10 ____________ 4 Miscellaneous 12 ____________ 5 Hired Labor 30hours 7.50/hr 225 ____________ 6 Int. on Oper. Cap 12mo. 9.0% 33 ____________

TOTAL VARIABLE COSTS -Per Acre 404 ____________

FIXED COSTS 5 Operator Labor Charge 6hours 7.50/hr 45 ____________

     Mach. and Equip. Charge 38 ____________

     Land Charge Rent 85 ____________ 7 Facilities and Equipment $ 30,000 15% 225 ____________

     Management Charge 137 ____________

    TOTAL FIXED COSTS 530 ____________ TOTAL COSTS -Per Acre 934 ____________ 1Land preparation is the first step in establishing an orchard. No crop or revenue is realized until the 4th year or later. 2Consult OSU Bulletin 458 "Fertilizing Fruit Crops" for specific recommendations 3Consult OSU Bulletin 506A2 "Commercial Tree Fruit Spray Guide" for specific recommendations 4Includes soil tests, small tools, utilities, etc… 5Hired and seasonal labor is considered a variable costs, salaried and operator/unpaid family labor is considered a fixed cost. 6Interest on all variable costs for 6 months at 9% interest rate 7Facilities and equipment valued at $30,000 expensed at 15% annually for 20 acres.

     Example: $30,000 x 15 / 20 acres = $225

     Includes depreciation, interest, insurance, and repairs.

    PEACH PRODUCTION 1 Establishment (Year 1)BUDGET

    1 Acre

    ITEM EXPLANATION PRICE PER YOUR

     UNIT BUDGET

     VARIABLE COSTS

    Peach Trees 120trees $6.00/tree $720 ___________ 2Fertilizer

    N 25lb 0.23/lb 6 __________

    PO50lb 0.28/lb 14 __________ 25

    KO 50lb 0.13/lb 7 __________ 23Herbicides 150 __________

     Fuel, Oil, Grease 15 __________

    Repairs 12 __________ 4Miscellaneous 12 __________ 5Hired Labor 20hours 7.50/hr 150 __________ 6 Int. on Oper. Cap12mo. 9.0% 33 __________

TOTAL VARIABLE COSTS -Per Acre 1118 __________

FIXED COSTS 5 Operator Labor Charge10hours 7.50/hr 75 __________

     Mach. and Equip. Charge 38 __________

    Land Charge Rent 85 __________ 7Facilities and Equipment $30,000 15% 225 __________

    Management Charge 137 __________

TOTAL FIXED COSTS 560 __________

    TOTAL COSTS -Per Acre 1678 __________ 1 Planting trees is the second step in establishing an orchard and is typically performed the second year of the enterprise. No crop or revenue is realized until the 4th year or later. 2Consult OSU Bulletin 458 "Fertilizing Fruit Crops" for specific recommendations 3Consult OSU Bulletin 506A2 "Commercial Tree Fruit Spray Guide" for specific recommendations 4Includes soil tests, small tools, utilities, etc… 5Hired and seasonal labor is considered a variable costs, salaried and operator/unpaid family labor is considered a fixed cost. 6Interest on all variable costs for 6 months at 9% interest rate 7Facilities and equipment valued at $30,000 expensed at 15% annually for 20 acres. Example: $30,000 x 15 / 20 acres = $225

    Includes depreciation, interest, insurance, and repairs.

    PEACH PRODUCTION 1Non-Bearing (Years 2-3) BUDGET

    1 Acre

    ITEM EXPLANATION PRICE PER YOUR

     UNIT BUDGET

    VARIABLE COSTS 2Fertilizer

    N 25lb 0.23/lb 6___________

     PO50lb 0.28/lb 14___________ 25

    KO 50lb 0.13/lb 7___________ 23 Pesticides 125___________

     Fuel, Oil, Grease 12 ___________

    Repairs10 4 Miscellaneous 12 ___________ 5Hired Labor

    Mowing and other 10hours 7.50/hr 75 ____________

    Pruning 1.00/tree 120 ____________ 6 Int. on Oper. Cap.12mo. 9.0% 23 ____________

TOTAL VARIABLE COSTS - Per Acre 404 ____________

    FIXED COSTS 5 Operator Labor Charge4hours 7.50/hr 30 ____________

     Mach. and Equip. Charge 38 ____________

     Land Charge Rent 85 ____________ 7Facilities and Equipment $30,000 15% 225 ____________ Management Charge 137 ____________

TOTAL FIXED COSTS 515 ____________

    TOTAL COSTS -Per Acre 919 ____________ 1Annual budget for years 2-3 of enterprise. After establishment and before fruit bearing. Peach trees typically do not produce fruit until the 4th year or later. 2Consult OSU Bulletin 458 "Fertilizing Fruit Crops" for specific recommendations 3Consult OSU Bulletin 506A2 "Commercial Tree Fruit Spray Guide" for specific recommendations 4Includes soil tests, small tools, utilities, etc… 5Hired and seasonal labor is considered a variable costs, salaried and operator/unpaid family labor is considered a fixed cost. 6Interest on all variable costs for 12 months at 9% interest rate 7Facilities and equipment valued at $30,000 expensed at 15% annually for 20 acres. Example: $30,000 x 15 / 20 acres = $225

    Includes depreciation, interest, insurance, and repairs.

    PEACH PRODUCTION 1 Fruit Bearing Trees (Years 4+)BUDGET

    1 Acre

    ITEM EXPLANATION PRICE PER YOUR

     UNIT BUDGET

    REVENUE

    Peaches 6500lb $0.42/lb $2,730 ____________

VARIABLE COSTS 2Fertilizer

    N 25lb 0.23/lb 6 ____________

    PO50lb 0.28/lb 14 ____________ 25

    KO 50lb 0.13/lb 7 ____________ 23Herbicides 10 ____________ 3Insecticides 100 ____________ 3Fungicides 85 ____________

    Fuel, Oil, Grease 25 ____________

     Repairs 15 ____________ 4Miscellaneous 20 ____________ 5Hired Labor

    Mowing, harvesting, and others 90hours 7.50/hr 675 ____________ Pruning 1.50/tree 180 ____________

    Marketing Costs

    Picking Boxes 135boxes 1.50/box 203 ____________

    Cool Storage 135bu 0.30/bu 41 ____________

    Bee Rental and Maintenance 50 ____________ 6 Int. on Oper. Cap.12mo. 9.0% 86 ____________

     TOTAL VARIABLE COSTS - Per Acre 1516 ____________

    - Per Pound 0.23 ____________

    FIXED COSTS 5 Operator Labor Charge10hours 7.50/hr 75 ____________

     Mach. and Equip. Charge 38

    Land Charge Rent 85 ____________ 7Facilities and Equipment $ 30,000 15% 225 ____________

    Management Charge 5%of gross receipts 137 ____________ TOTAL FIXED COSTS 560 ____________

    TOTAL COSTS - Per Acre 2076 ____________

    - Per Pound 0.32 ____________

    RETURN ABOVE VARIABLE COSTS 1214 ____________

    RETURN ABOVE TOTAL COSTS 654 ____________ 1Price and yield based on historical yield and price received in Ohio. Yield will vary with age of trees. Yield and/or price may vary depending on variety and quality of fruit. Peach trees should reach a maximum production by 5-7 years but will decline after 10. 2Consult OSU Bulletin 458 "Fertilizing Fruit Crops" for specific recommendations

    3Consult OSU Bulletin 506A2 "Commercial Tree Fruit Spray Guide" for specific recommendations 4Includes soil tests, small tools, utilities, etc… 5Hired and seasonal labor is considered a variable costs, salaried and operator/unpaid family labor is considered a fixed cost. 6Interest on all variable costs for 12 months at 9% interest rate 7Facilities and equipment valued at $30,000 expensed at 15% annually for 20 acres. Example: $30,000 x 15% / 20 acres = $225

    Includes depreciation, interest, insurance, and repairs.

    Expenses and Returns over Life of Trees

    Peach trees assumed to last 12 years.

    Since a peach orchard lasts as many as 12 years, it is important to examine the time value of money associated with the enterprise. Time value of money is based on the premise that $1 today is worth more than $1 in the future. This is basically because the $1 today can be invested and appreciate in value until some time in the future. Therefore in regards to the peach enterprise, $1 of return in year one would be worth more than $1 of return in year ten. Returns in future years need to be discounted to reflect the time value of money. The following table lists the future value and present value of returns from the enterprise.

    Discount Rate = 10%

    The discount rate is the degree to which the future values are discounted to reflect current values. It is generally assumed to be equivalent to the amount you could earn in alternative investment opportunities.

    Returns Over Present

    Total Costs Value

    Year 0 -$934 -$934

    Year 1 -$1,678 -$1,525

    Year 2 -$919 -$760

    Year 3 -$919 -$690

    Year 4 $654 $447

    Year 5 $654 $406

    Year 6 $654 $369

    Year 7 $654 $336

    Year 8 $654 $305

    Year 9 $654 $278

    Year 10 $654 $252

    Year 11 $654 $229

    Year 12 $654 $209

    Total $1,440 -$1,078

    Over the life of the planting, the enterprise will generate $1,440 in returns. However, since much of the return comes in future years, it is not the same as having $1,440 in the operator's pocket today. The present value column indicates that if the operator was given the equivalent return in one lump sum today, it would be worth -$1,078. The difference of the total returns and the present value returns is a result of the time value of money.

Report this document

For any questions or suggestions please email
cust-service@docsford.com