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Using Partial Budgets to Make Decisions

Robert Tigner (May, 2010)

Summary

A partial budget allows producers to analyze their farming business. Partial budgets analyze projected costs and revenues associated with some change to the business. The intent would be to determine if there was an economic gain (increase in profitability) to implementing the proposed change. For example, partial budgets can be used to evaluate whether you should: add an enterprise, change production practices, change your product mix, custom hire or purchase machinery, add a packing shed, change marketing outlets, purchase transplants or grow your own, livestock purchases and many other comparisons.

Related Materials

• Partial Budget