Here’s what a small farm's monthly budget might look like: If you have kids your budget will look very different, but again, hopefully this is a good rough guide. If you are planning on growing veggies your budget will look different, but this could still be a decent guide. We plan to focus on raising livestock and producing cheese. Needless to say, every farm's budget will look different. What are a Small Farm's Operating Expenses? I consider those to be direct expenses and think about them separately.įor a detailed overview of how and why I think about direct and indirect expenses separately please see Farm Flows - Understanding Gross and Operating Profit. I do not include items like feed, hay, labor, minerals, vet bills, or butcher costs. In fact, those four that I just listed will most likely be 70-80% of our operating expenses. Sometimes this area gets a little fuzzy and not everything is perfect, but for us we include things like fuel, electricity, insurance, mortgage payment, etc. Operating expenses are those costs that you incur independent of the product you are selling. They are ongoing costs that are not directly connected with with the final products you sell.
I define operating expenses as indirect expenses. This is a long post, but there's no other way around it, it's not a simple subject to tackle. We thought it would be helpful to share some of our findings and maybe provide some clarity for other beginning farmers. Instead, we’ve visited a bunch of farms, thought long and hard about what we spend money on and slowly put together our own operating expense budget. One thing we haven’t found a lot of information about online is the operating costs of running a small, homestead farm.
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