Livestock and dairy budget generation: Idaho's 20 years of doing costs andreturns estimates

Costs and returns estimates, a.k.a. enterprise budgets, are an important ma nagement tool for farmers and ranchers to analyze their current operation a nd plan changes. Enterprise budgets are also important in developing market ing plans that help sustain whole farm profitability. While the definition of an enterprise can vary, it traditionally refers to an individual crop or class of livestock. Segmenting the farm by enterprises allows the producer to make relative comparisons between enterprises and to project the effect s of crop or livestock production changes on whole farm profitability. In 1976, Idaho began using the Oklahoma State Budget Generator(Kletke, 1976 ) to produce both crop and livestock enterprise budgets. Although Idaho use d this mainframe software for many years, it was not completely satisfactor y for generating livestock enterprise budgets. Like most early budget gener ators, the Oklahoma program was developed initially for crops. When the bas e budget unit changed from an acre to a cow, sow, or ewe, the program becam e less functional. The unique characteristics of livestock enterprises made development of a pure livestock budgeting program desirable. Idaho ultimat ely developed two livestock budgeting programs. A dairy budgeting program, DBUDGET, has been available since 1991 and is used specifically for dairy a nd replacement heifer enterprise budgets. LBUDGET, a program designed to ge nerate enterprise budgets for beef cattle, stocker calves, sheep, hogs, and other livestock operations was released in the spring of 1997. These two programs are currently being used to generate livestock enterpris e budgets in Idaho. Recommendations by the American Agricultural Economics Association task force on commodity costs and returns have been incorporate d into these programs. These programs provide a standardized and consistent method for generating enterprise budgets related to livestock operations. These estimates are used by managers concerned about costs and returns and by the agricultural lending and appraisal industries as benchmark compariso ns with individual borrower requests.