East-West Arena Construction Blog

Farm Budget Management for Smarter Farming

Posted by East-West Arena Construction

Apr 17, 2015 12:14:54 PM

According to Google the U.S. is home to some 319 million people, and as our population is growing, so are the demands on the world of agriculture and farming. Farmers are looking for ways to improve conditions for their animals, increase their profits, and improve their farming systems. And many farmers are deploying systems to make their farms "smarter" too. "One way to address these issues and increase the quality and quantity of agricultural production is using sensing technology to make farms more “intelligent” and more connected through the so-called “precision agriculture” also known as smart farming," Forbes.

Farmers also employ farm budget management principles to compare costs and returns, evaluate economic conditions, and make adjustments in resources as needs change. Partial budgeting is a systematic approach that can assist farm managers in making informed decisions, estimate possible financial impacts, and industry projections. A partial budget refers to the resources that can or will be changed, rather than considering the factors in the business that won't be changing; therefore only the factors that have changed will be evaluated for their ability to increase or decrease income in the farm business. According to Robert Tigner of Iowa State University, "Many of the decisions are incremental, such as adding land, expanding or reducing an enterprise, or changing how an enterprise is managed. The partial budget is a useful tool for farm managers when these situations arise. A partial budget helps farm owners/managers evaluate the financial effect of incremental changes."


"Many of the decisions are incremental"

The partial budget is based on the basic principles that small business changes will affect the farm's income by either increasing the income, reducing or eliminating costs, reducing income, and increasing costs. An effective manager forecast will lead the farm to positive financial changes, and give the farm added income. Whether farms are raising livestock, equine animals, or agriculture, farm budget management principles, improved production technology, and local infrastructure and support, will ultimately lead to "smarter farming" throughout the farming world.

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Topics: Budget