Estimating costs of production on Arizona crop farms

Total farm budgets which estimate production costs, yields and prices before the crop is,planted assist farmers in decisions concerning input procurement, crop mixes, marketing strategies and financing. This study focuses on the estimation of production costs and problems associated with their estimation on Arizona crop farms. Production costs are estimated with the Arizona Crop Budget Generator. It was found that predicting past cash costs and comparing them to actual farm records proved beneficial to verify the model in order to make needed adjustments to predict future cash costs. This study also presents an economic evaluation of the methodological alternatives for estimating farm machinery costs. The Traditional Method, Arithmetic Average Method, and Present Value Method are discussed, compared and contrasted. Results indicate that the Present Value Method should be used in estimating average annual costs, although similar results, with very little error were derived for the Arithmetic Average Method and may be used successfully when inadequate date exists for the present value method or when a quick answer is desired

AZU_TD_BOX270_E9791_1970_137.pdf (2.15 MB)

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