Users Guide
The Integrated Farm Budget Tool is designed to help farmers growing conventional grain (corn, soybeans, wheat) crops with budgeting and decision-making. Three key features are:
- A Detailed Budget can be quickly constructed for a crop year, without requiring a user to perform a detailed cost analysis. The detailed budget combines revenue items such as contracted and uncontracted grain, crop insurance indemnity and title payments with cost items including crop insurance premiums and owned/rented land costs to compute a pre-tax cash flow value for the farm, which is broken down by crop and presented in units of thousand dollars per acre ($ 000/ac), dollars per acre ($ /ac) and dollars per bushel ($ /bu).
- Sensitivity tables allow a user to visualize the effects of crop yield, futures price and basis on their cash flow under a number of different scenarios at once. This can help a user make good decisions on Title (government program) and Crop Insurance selections, Crop Acreage Allocation and Grain Marketing by managing risk to their projected cash flow.
- Grain contracts for futures price and/or basis can be easily managed.
The tool tracks relevant harvest futures prices and computes estimates for crop insurance premiums and indemnities as well as title payment under arbitrary price/yield scenarios.
The best time to start budgeting a crop year is in early January so that you can get comfortable using this tool to help make decisions on crop insurance and title during the crop insurance and title decision periods for your county. You may also wish to begin to contract futures price and/or basis for a portion of your expected crop or input a sequence of planned contract amounts spread out over several months.
As information for the crop year is released by key outside sources, IFBT's estimates of crop insurance premiums and indemnities, ARC-CO and PLC title payments and region-specific costs and yields will become more and more accurate. See the Status Page (link in the footer of the website) for information on this process and status updates as they become available.
To get started, point your browser at ifbt.farm
Register for free (Your email address will never be shared by us).
Once registered and logged in, you will be directed to your "Farm Years" page and prompted to add a farm for the current crop year.
If at any time, you decide that this tool is not for you, you can simply delete all your farm years, and then click the "Delete Account" link in the right of the header. Once that is done, none of your information will remain in our system. For more on this, see our Privacy Policy (link in the footer of the website).
To add a farm for the current crop year, simply specify a farm name, your state, and your primary county (the county where most of your farming is done).
If your farm land lies in remotely disconnected regions, you may wish to create more than one farm. You can have up to ten farms for a given crop year, but note that farm years are independent of each other, that is, no aggregation is currently performed across different farms or crop years.
If your state or county is not supported, it's likely that your county has no RMA-insurable commodity grain crops (i.e. corn, wheat, soybeans). If that is not the case, please let us know by by creating an Issue which describes your grain farm operation. We currently support most counties in 33 states covering 98% of U.S corn and wheat production and 99% of U.S. soybean production.
Adding a farm automatically adds the set of Farm crops which can be insured by the USDA Risk Management Agency (RMA). These are "Corn", "FS Beans", "DC Beans", "Winter Wheat" and "Spring Wheat". For each of these, an associated Market crop, which has a futures price, is created. For each Market Crop, an associated FSA Crop, one of Corn, Beans or Wheat, is created.
After creating your farm you'll be returned to your Farm Years page.
Click on the Dashboard link for your new farm. The Dashboard provides easy access to all your input data and outputs. The Dashboard links are duplicated in the top navigation bar for convenience. Next we'll begin to input some data specific to your farm operation so that the outputs (Detailed Budget and Sensitivity Tables) will be useful.
If you click on your Farm Year Details, you may notice that there are quite a few zero values on the detail view. You'll want to update the values here as accurately as you can. If you're not sure about some of the amounts, you can enter estimates at first, then fine tune by re-editing these details later.
Click the Edit button at the bottom of the page to update specific information about your farm, which will be included in your budget. Most of the fields in the top of the form will need to be updated to accurately reflect your farm business. A few of the form fields might need additional clarification:
- "Land Repairs" includes the average annual cost of field tile, waterways, terraces, and maintaining fence rows.
- Rented acres are split between "Straight Cash Rent Acres" and "Variable Rent Acres". The current trend in farmland rent is away from straight cash rent toward some sort of variable rent. This is implemented in our application as follows: A per-acre baseline farm revenue is defined for each crop as the product of the "RMA projected price" and a "Variable Rent Baseline Yield" agreed on by the tenant and landlord before spring crops are planted (this might be a five year average yield, for example). The actual crop revenue is the product of the actual average farm yield for the current year's crop and the "RMA harvest price". The base "Rented land cost" is then multiplied by the ratio of the actual crop revenue to the baseline crop revenue. This product is then clamped by "Variable rent cap/floor percentage" (e.g. 10%) so that the final per acre rent cannot fall below
(1 - capfloor/100) * base_rentor exeed(1 + capfloor/100) * base_rent. You can adjust the default "Variable Rent Baseline Yield" and base "Rented Land Cost" for each crop in the "Yield and Expense Budgets" view (discussed later).
In the bottom half of the form, you will see "Non-grain revenue and Expense", "Farm level title settings" and "Report controls".
- The "Other non-grain revenue/expenses" fields provide places to enter estimated revenue and expense values for the total of all other enterprises not related to the RMA-insured farm crops. For example, this could include livestock or organic/specialty crop enterprises.
- "Eligible entities for FSA cap" refers to the cap on total PLC and ARC-CO payments to the farm in a given year. There is currently a cap of $125,000 for each eligible entity.
- "Estimated Sequestration percent" refers to the sequestration tax rate applied to total PLC and ARC-CO payments prior to applying the cap. The actual value can change from year to year, but the default value should be a pretty good estimate.
- The "Model Run Date Manual?" / "Manual Model Run Date" fields are used to allow a limited time travel to an earlier point in the crop year. This is discussed in more detail below.
- The "Basis increment for sensitivity" field controls the increments to the "Assumed basis for new" value (discussed later) for basis sensitivity in the context of the Sensitivity table.
You can keep the default "Report controls" settings for now. They'll be discussed later in this guide.
Once you've finished updating your farm-specific data, you can return to the dashboard and click the link "Crop Acreage/Crop Insurance" (or just click that link in the Dashboard drop-down list in the top navigation bar and go there directly). Again, you'll notice a lot of zeros.
To update a crop, click the Edit button for a crop at the bottom of the "Crop Acreage/Crop Insurance" list view.
The top part of the Crop Acreage / Crop Insurance form lets you enter key information about the crops you intend to plant, including some values we need to estimate Crop Insurance premiums. These are:
- Rate Yield (typically about 90-95% of your five-year average yield for the crop)
- Adjusted Yield (typically about 90-95% of your five-year average yield for the crop)
- A Risk Class or "Sub-county Code" or "Map Area" in the RMA's terminology should be specified if most of the crop's acres for the crop year lie in a high risk area, such as an area which may be prone to flooding. Your crop insurance agent should be able to provide this information.
- Use QL? - this option indicates whether Quality Loss is typically used to compute your Approved Yield.
- Use TA? - this option indicates whether Trend Adjustment is typically used to compute your Approved Yield.
- Use YA? - this option indicates whether Yield Averaging is typically used to compute your Approved Yield.
- Use YC? - this option indicates whether Yield Cup is typically used to compute your Approved Yield.
- Use YE? - this option indicates whether Yield Exclusion is typically used to compute your Approved Yield.
- Approved Yield (typically close to your five-year average yield for the crop)
Your crop insurance agent should be able to let you know which of these settings are typically used in computing your Approved Yield.
It's especially important to specify whether or not a crop is (primarily) irrigated, since that choice determines the available set of "budgets" to be discussed in the next section. If there are automatically-added crops which you don't want included in your crop plan, simply leave their planted acres set to zero and they won't appear in the output pages (Detailed Budget and Sensitivity Tables).
The bottom part of this form lets you update your crop insurance choices (selections). Our application currently supports only the Enterprise Unit for Farm-based coverage. County-based (Area) coverage is supported, as are County-based enhancements SCO and ECO. Reasonable choices to get started with might be "Coverage Type": Farm, "Product Type": RP, "Base Coverage Level": 75% or 80% and no SCO or ECO. Video Tutorial 6 describes these choices in more detail.
After viewing "Sensitivity tables", to be discussed below, you may wish to change some of these settings and see the effects of these changes to cash flow under a range of possible yields and harvest prices. See Video Tutorial 18 for more on this.
In the next step, we'll return to the "Crop Acreage/Crop Insurance" page, and use the drop-down lists at the bottom of each crop column to select "budgets" which will fill in a reasonable set of yields and cost items to save you time in getting started.
A set of about 261 pre-defined crop-specific budgets are available to the application each year. Data from public and government sources are collected, assembled into a consistent format and released over a period from January to April of the crop year. Key properties of these budgets are the yields and the land rent costs. It's recommended to select a budget for each crop from a comparable region whose yields and rents match those of your county fairly closely. If you have double-crop (DC) soybeans, you may notice that the land rent costs shown in the budget dropdown are zero. That's because all the land rent costs are applied to the corresponding wheat crop.
The available budgets are filtered based on irrigated status to simplify budget selection. You will want to add a "budget" for any crop for which you have title (PLC or ARC-CO) base acreage -- even if you've set planted acres to zero because you don't intend to plant the crop.
Once you've added your budgets, your Crop Acreage / Crop Insurance list view should look something like this:
If you're curious about the source and authors of the university budget that a selected budget was based on, click the "Budget Source" link below the budget selector and look for the entry highlighted in yellow.
You can see all the budget cost and yield information by navigating to "Yield and Expense Budgets". The top of this list view shows values for expected yields, other revenue items, direct costs and power costs.
The bottom of this list view shows values for overhead costs, land rent and control settings for yield and variability of cost with yield.
Once you've added a budget to a crop, you can edit the individual budget item values as desired, bearing in mind that yields and costs are generally closely correlated, so changes to yields may require corresponding changes to cost items for accuracy. The "yield variability" value is the percentage of your total non-land cost which varies with yield. For example, replacement fertilizer is proportional to yield. It's recommended to leave this value at it default value, unless you want to analyze each cost item for its yield variability and contribution to non-land cost.
You'll usually want to leave "yields final" unchecked until harvest is complete for a crop. At that time, you should update your farm's yields and your estimate of county yields for the crop and check this box. The yield sensitivity factor will be discussed later on, but for now, leave it at its default setting of 100%.
After customizing a budget, you can reset the values back to the original budget values by re-selecting that budget option. You can also select a different budget. Both of these actions will clear any custom values you may have set and replace them with the budget defaults.
If you've made it this far, reward yourself with a hot cup of coffee -- or maybe something stronger ;-). Your'e on the home stretch!
Next, navigate to "Grain Marketing". You should see something like this:
Edit each of your market crops to set a default basis for un-marketed grain. Leave the "Price Sensitivity Factor" set at 100% for each crop for now.
Click "Manage Contracts" on the "Grain Marketing" page to see a link for adding a contract for the market crop. Once you've entered a contract, a table of contracts will appear with the contract details and edit and delete links for each contract. The contract date and bushels fields are required, and you'll usually want to also enter a basis price, a futures price or both.
You may also wish to enter a sequence of planned contracts to be executed in the future, e.g. 20,000 bushels of corn each month beginning on February 15. In this case, you don't know the futures or basis price yet, so leave them both blank. When the planned contract date comes around, you can add pricing and other information and modify the contract date and/or bushels -- or simply delete that contract if you decide not to excecute it.
Add any contracts for futures or basis you may have already made for the crop year.
Once that's done, your "Grain Marketing" list view might look something like this:
You can print grain contracts to PDF or CSV format. PDF is a good choice if the report format suits your needs. If, however, you would like the contracts sorted differently, say by delivery start date, you can download and save in CSV format, which will load easily in any spreadsheet. There you can sort, add totals or other formulas as needed.
Next, navigate to "Title Elections". You should see something like this:
Here you can edit your corresponding FSA crops with your PLC yields and allocate your base acres between PLC and ARC-CO. If you don't know your farm's PLC yields or base acres for each crop, your local FSA agent should be able to provide these. For convenience, you can also edit from here the "Eligible entities for title cap" and "Estimated Sequestration Percent" fields we saw earlier on the "Farm Specific Data page"
Now that you've set up your farm to your satisfaction, you can view a detailed budget and a set of sensitivity tables for your farm.
The Detailed Budget is a complete budget for the farm year that pulls together cost items and other information from the farm crop "budgets" and many other sources.
Navigate to "Detailed Budget". The top part of this report shows a breakdown of your farm's projected revenue and a set of key values used to generate the report.
The bottom of this report is your farm's detailed pre-tax cash flow budget. There are a lot of numbers here, but don't let it overwhelm you. Start by scrolling down to left section at the bottom of the page to find your farm's projected cash flow for the crop year in thousands of dollars. It's the difference between Gross Revenue and Total Costs. These are, in turn, totals of individual computed values. You can look at these values for each crop to get a clearer understanding of the economics of your farm year.
To the right of the main budget, you'll see similar breakdowns in units of dollars per bushel and dollars per acre. If you have double-crop (FAC) soybeans following wheat, you'll see an additional section which combines wheat and double-crop beans.
To see what your detailed budget would look like under different yield scenarios, you can set the "Yield Sensitivity Factor" near the top of the farm budget crop form for any of your crops, accessed through the "Yield and Expense Budgets" list view.
To visualize different price scenarios, you can set the "Price Sensitivity Factor" for any of your market crops on the "Edit market crop" form accessed through the "Grain Marketing" list view.
Once you've viewed the detailed budget, you'll see a "Set Baseline" button appear on your farm's dashboard. This takes a snapshot of your current budget for later comparison. The best time to set the baseline is after you've finalized your selections for allocation of planted acres, crop insurance and title. Once the baseline budget is set, you'll be able to view a "variance budget" showing the differences between your current (or final) budget and your baseline budget. Clicking the "Print" button generates a PDF file which can be saved or printed.
Clicking the "Sensitivity Tables" link, generates a set of up to 130 tables which can be displayed using the controls at the top of the page. Each table shows the effects of changes to price, yield to
- A "Type", one of the following metrics: Revenue, Cost, Title, Crop insurance indemnity, or pre-tax Cash flow,
- A "Crop": whole farm, specific crop, or a Wheat/DC beans enterprise,
- An increment to the basis you've set for uncontracted grain,
under the assumption that changes to price and yield affect all crops proportionally. This is a powerful tool that gives you insight into your farm's profitablity under a wide range of price/yield scenarios. For cash flow and revenue, a basis selector.
You can set the increment for basis in the Report Settings section of the Farm Year edit form. Since this option causes up to 80 additional tables to be generated, it increases the time to load the Sensitivity Tables page. If your internet connection is not too fast, you may want to turn off the generation of these tables when not exploring different basis scenarios; you can do this by setting the basis increment to zero. Clicking the "Print" button generates a PDF file which can be saved or printed.
With the farm budget tool, you can use the manual model run date in the Report Settings section of the Farm Year edit form to "travel back" to an earlier time in the crop year. You can review the prices and other information available at that time which motivated your decisions on crop insurance, title and marketing. This can be useful when at harvest time you find yourself wondering why your current budget's cash flow is different from your baseline. The main limitation on time travel is that it can't automatically unlock or relock yields or costs so you may want to manually unlock those values before traveling back. Also note that any form fields you have updated, such as budget costs or assmued basis will not revert to the settings that you had in place at the earlier date.
We can imagine a crop year as evolving in three phases:
This the period between mid-January and mid-February is a busy time for making decisions that will affect your farm's bottom line. Using the budget and sensitivity tables, you can test the effect of different crop insurance and title selections on cash flow and make crop insurance selections that provide the best trade off between cost and risk.
Once the spring planting is complete, you may wish to update your budget based on your current yield estimates. This can be done very simply by adjusting the yield factor for each crop. Adjusting the yield factor up (down) generates an increase (decrease) to a fixed percentage of your non-land costs. During this period, you should consider reducing the risk of low harvest prices and/or basis by contracting futures and basis for delivery during or after harvest.
Once harvest is complete, and if you know the actual revenue and costs for the crop year, you can adjust budget items to reflect the actual outcome and view variances against the baseline budget. You can continue to add contracts for your grain.
We highly recommend that you take the time to watch some or all of the tutorial videos. These cover in more detail techniques and strategies for using this tool to make the best possible decisions for your farm.
If you ever encounter a 500 response code (Application Error), it's best if you wait a few business hours before making further changes to the farm year that generated the error. We will have been notified of the issue, and our team will be working to reproduce the error in a test environment so it can be resolved quickly. We'll notify you by email as soon as the bug has been fixed.
If you think you've found a computation error (i.e. incorrect value reported) with this application, please feel free to post an Issue with any information that you think might help us to resolve it. If possible, refrain from making changes to that farm year for a few business hours, so we can be sure to be able to accurately reproduce the issue. If you have an idea for a new feature that might improve your experience with this tool, you can also let us know by creating an issue.
For general questions on using the tool, try posting to the Discussions forum, or if you're already an expert, consider contributing to the project by answering questions asked by newcomers.
We're grateful for the help and data contributions by others.