Budgeting Family Living into Cost of Production: Why It Matters for Farm and Ranch Families

Abstract

In farming or ranching, budgeting is more than just managing costs for seeds, feed, equipment, or labor. For farm and ranch families, the unique structure of finances often means family living expenses are often interwoven with the business. Budgeting family living expenses into cost of production is an essential practice that can significantly impact the financial stability of the family, especially during challenging economic periods when the operation’s income may fluctuate. By including family living expenses in the cost of production, farm and ranch families can gain a more realistic view of their business’s profitability, make more informed financial decisions, and work toward long-term sustainability.