Four certified organic Maine farms participated in this project; three machinery-powered farms and one horse-powered farm. The information from the horse-powered farm has become its own enterprise budget example due to the substantial differences in costs on a horse-powered farm from a machinery-powered farm.
Not all numbers in the machine-powered enterprise budget represent information from all three farms, but they do always represent information from at least two. This is a result of the fact that some farms had better success tracking certain pieces of information than others.
The intent of these enterprise budgets is to provide a benchmark for farmers who are interested in evaluating the profitability of scaling up carrot production. This should not be used as a substitute for creating enterprise budgets that are specific to your own production and business realities. For more information on the specifics of the budget and how to use it, please see below. To receive an excel version of this file that could be tailored to your own situation, please email Heather Omand (firstname.lastname@example.org).
The farmers in this project began by using a labor tracking system developed by Chris Blanchard of Purple Pitchfork consulting services. Two of the four farms valued the system, one ended up using a smart phone to track labor instead, and one farm used their existing recordkeeping systems, preferring it to the Blanchard system. Some of the farms felt they did not capture their labor or yields with 100% accuracy, but did feel they captured enough information to create a useful enterprise budget. If you are interested in trying this system on your farm to track labor information, please feel free to email Heather Omand for more information.
Specific Information and How to Use
These enterprise budgets are very basic, and are intended to provide farmers with baseline information to evaluate the profit potential in scaling up carrot production, in certified organic production of carrots, or as a comparison with an individual farm's enterprise budget. There was significant variation between the farmers in both labor and receipt costs. This demonstrates that the production choices made by farmers, efficiency of labor and labor systems, and crop management (weediness, etc.) will play a substantial role in an individual farm's costs and cannot be safely extrapolated based on averaged/aggregated information (such as these budgets) when making major farm decisions.
The "net profit" in these enterprise budgets, configured both as a total for the square footage represented AND as per square foot number, does not include overhead costs such as utilities required to power the business, land costs, etc. In his book "The Organic Farmer's Business Handbook" Richard Wiswall's overhead costs are 36% of his total crop costs for carrots. One could extrapolate from this number for each of the budgets that overhead costs might be:
• machine-powered budget: $150.27
• horse-powered budget: $488.74
But it is important to note that these are very rough estimates.
The budgets also do not include costs of packaging carrots for sale; such as bags, rubber bands or ties, labels, or boxes. These are important costs to factor in when considering "scaling up" to sell to larger retail or wholesale markets. It may be helpful to note that there is a new buying co-op for Maine farmers in 2015 that could be helpful in estimating or lowering these costs: Maine Farm Supply.
In regards to "scaling up" considerations, it is important to note that the price per bunch used in the machine-powered budget was $2.75 and the price per bunch in the horse-powered example was $3.42. This puts the respective net profit per acre at:
• machine-powered: $29,621
• horse-powered: $16,553
before overhead and packaging costs. However, it is unlikely that most producers will be able to find wholesale buyers who will pay these per bunch prices. If we bring the price down $2.00 per bunch net profit per acre drops to:
• machine-powered: $16,553
• horse-powered: $1,307
Depending on the wholesale market you are looking at, prices closer to $1.00 per bunch or pound may be more likely.
For more information or questions, please contact Heather Omand: email@example.com.