Partial Budgeting: Making Incremental Farm Business Changes

Business owners must often make decisions about changes for their agricultural businesses. Many of the decisions are incremental, such as adding land, expanding or reducing, adding or changing how an enterprise is managed. Analyzing the whole farm impacts for these types of changes is unnecessary. The partial budget is a useful analytical tool for agricultural managers, operators, owners, and investors when these situations arise. A partial budget helps agricultural owners/managers evaluate the financial effect of incremental changes. A partial budget only includes those resources that will be changed; it does not consider the resources in the business that are left unchanged. Read More