A Federal Income Tax Primer for
North Carolina Christmas Tree Growers

Appendix: Budget for a One-Acre Fraser Fir Farm, Avery County
and Surrounding Areas of Western North Carolina, 1994.1

Site Preparation
First year | Second year | Third year | Fourth year | Fifth year | Sixth year | Seventh year | Eighth year

Category Units Price ($) Quantity Value ($)
Sixth Year:
Production:
6-7' Trees Each 16.00 400.00 6,400.00
Total receipts       $6,400.00
Operating inputs:
19-19-19 Cwt. 11.50 3.27 $37.61
15-0-0 Cwt. 11.80 4.16 49.09
Herbicide Acre 80.20 1.00 80.20
Insecticide and miticide Acre 105.00 1.00 105.00
Baling Each 0.50 400.00 200.00
Advertising Acre 50.00 1.00 50.00
Tractor fuel and lube Acre 61.82 1.00 61.82
Tractor repair cost Acre 23.04 1.00 23.04
Machinery fuel and lube Acre 18.21 1.00 18.21
Machinery repair cost Acre 63.59 1.00 63.59
Equipment fuel and lube Acre 17.74 1.00 17.74
Equipment repair cost Acre 11.64 1.00 11.64
Total operating cost       $717.94
Returns to land, labor, capital, machinery, overhead, and management       5,682.06
Capital cost:
Annual operating capital Dol. 0.09 470.51 42.35
Tractor investment   0.09 346.95 31.23
Machinery investment   0.09 1,242.32 111.81
Equipment investment   0.09 40.03 3.60
Avg. net estab. cost   0.09 3,559.84 320.39
Total capital cost       $509.38
Returns to land, labor, machinery, overhead, and management       5,172.68
Ownership cost: (depreciation, taxes, insurance), Dol.
Tractor       39.35
Machinery       196.84
Equipment       27.15
Establishment and growing costs       2,373.13
Total ownership cost       $2,636.47
Returns to land, labor, overhead, and management       2,536.21
Labor cost:
Machinery labor Hr. 6.00 23.05 138.30
Other labor Hr. 6.00 89.13 534.78
Total labor cost     112.18 $673.08
Returns to land, overhead, and management     1,863.13

Seventh Year:
Production
6-7' Trees Each 16.00 200.00 3,200.00
7-8' Trees Each 19.00 600.00 11,400.00
Total receipts       $14,600.00
Operating inputs:
18-46-0 Cwt. 11.50 3.56 40.94
0-0-50 Cwt. 15.00 1.19 17.85
15-0-0 Cwt. 11.80 4.16 49.09
Herbicide Acre 45.20 1.00 45.20
Insecticide and miticide Acre 52.80 1.00 52.80
Baling Each 0.50 800.00 400.00
Advertising Acre 110.00 1.00 110.00
Tractor fuel and lube Acre 87.11 1.00 87.11
Tractor repair cost Acre 32.33 1.00 32.33
Machinery fuel and lube Acre 36.44 1.00 36.44
Machinery repair cost Acre 98.77 1.00 98.77
Equipment fuel and lube Acre 17.74 1.00 17.74
Equipment repair cost Acre 11.64 1.00 11.64
Total operating cost       $999.91
Returns to land, labor, capital, machinery, overhead, and management       13,600.09
Capital cost:
Annual operating capital Dol. 0.09 653.51 58.82
Tractor investment   0.09 486.84 43.82
Machinery investment   0.09 1,605.92 144.53
Equipment investment   0.09 40.03 3.60
Avg. net estab. cost   0.09 3,559.84 320.39
Total capital cost       $571.16
Returns to land, labor, machinery, overhead, and management       13,028.93
Ownership cost: (depreciation, taxes, insurance), Dol.
Tractor       55.21
Machinery       256.20
Equipment       27.15
Estab. and growing cost       2,373.13
Total ownership cost       $2,711.69
Returns to land, labor, overhead, and management       10,317.24
Labor cost:
Machinery labor Hr. 6.00 34.28 205.68
Other labor Hr. 6.00 116.93 701.58
Total labor cost     151.21 $907.26
Returns to land, overhead, and management       9,409.98

Eighth Year:
Production
6-7' Trees Each 16.00 200.00 3,200.00
7-8' Trees Each 19.00 200.00 3,800.00
Culls Each 3.50 300.00 1,050.00
Total receipts       $8,050.00
Operating inputs:
46-0-0 Cwt. 13.50 2.38 $32.13
19-19-19 Cwt. 11.50 3.27 37.61
Insecticide and miticide Acre 105.00 1.00 105.00
Herbicide Acre 80.20 1.00 80.20
Baling Each 0.50 400.00 200.00
Advertising Acre 150.00 1.00 150.00
Tractor fuel and lube Acre 37.51 1.00 37.51
Tractor repair cost Acre 14.12 1.00 14.12
Machinery fuel and lube Acre 18.21 1.00 18.21
Machinery repair cost Acre 41.81 1.00 41.81
Equipment fuel and lube Acre 17.74 1.00 17.74
Equipment repair cost Acre 0.77 1.00 0.77
Total operating cost       $735.10
Returns to land, labor, capital, machinery, overhead, and management       $7,314.90
Capital cost:
Annual operating capital   0.09 493.29 44.40
Tractor investment   0.09 212.41 19.12
Machinery investment   0.09 562.58 50.63
Equipment investment   0.09 40.03 3.60
Avg. net estab. cost   0.09 3,559.84 320.39
Total capital cost       $438.14
Returns to land, labor, machinery, overhead, and management       6,876.76
Ownership cost: (depreciation, taxes, insurance)
Tractor       24.08
Machinery       90.46
Equipment       27.15
Establishment and growing costs       2,373.13
Total ownership cost       $2,514.82
Returns to land, labor, overhead, and management       4,361.94
Labor cost:
Machinery labor Hr. 6.00 16.87 101.22
Other labor Hr. 6.00 59.02 354.12
Total labor cost     75.89 $455.34
Returns to land, overhead, and management       3,906.60

1Budget prepared by Jeff Owen and Ross Young, Extension Agents, and Lenny Rogers, Area Farm Management Agent, North Carolina Cooperative Extension Service.

Site Preparation
First year | Second year | Third year | Fourth year | Fifth year | Sixth year | Seventh year | Eighth year

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