Assessing Stochastic Budget Scenarios for Georgia Family Farms: The Case of Blueberries

Blueberry enterprise budgets can provide critical input for farm planning, including the potential income for a particular farm, the size of farm needed to earn a potential return, and anticipated cash flows during the year. However, inaccurate blueberry budgets give farm managers and producers too much confidence which can lead to unattainable profits, unexpected debt, and sometimes insolvency. Stochastic budgeting allows for important variable factors such as inputs, yield, and revenues of blueberries to be analyzed as statistical distributions instead of point estimates. Stochastic budgeting better estimates outcomes since it answers the ‘what if’ question since it incorporates risk and uncertainty in the blueberry production process.