2000 CHRISTMAS TREE PRODUCTION BUDGET 1
				Scotch and White Pine
				Hand Planted - 10 year Rotation 2
				Wholesale Sales
	ITEM				YEAR												YOUR
					1	2	3	4	5	6	7	8	9	10	TOTAL		BUDGET
	Christmas Trees (percent  sold) 3										10%	25%	35%	30%	100%
INCOME
	Christmas Trees										840	2,100	2,940	2,520	8,400
			600	trees sold over entire rotation
			$14	per tree 4	1000	1000	850	775	700	700	700	700	700	700
											60	150	210	180	600
VARIABLE  COSTS
	Seedlings 5				300	45									345
	Fertilizer				30										30
	Herbicides				60	60	60	40	40	40	40	40	40	40	240
	Insecticides						20	30	40	50	50	50	50	50	290
	Shearing 6						106	97	175	175	175	175	175	175	1050
	Hired Labor 7				378	243	81	81	81	81	81	81	81	81	1269
	Fuel, Oil, Grease				13	12	11	11	11	11	11	11	11	11	113
	Repairs				6	5	5	5	5	5	5	5	5	5	51
	Harvesting 8										60	150	210	180	600
	Miscellaneous 9				15	15	15	15	15	15	15	15	15	15	150
	Interest on Oper. Cap.				68	32	26	24	32	33	39	47	52	49	402
TOTAL VARIABLE COSTS					828	385	315	294	390	401	467	565	630	597	4872
FIXED COSTS
	Operator Labor Charge 7				90	90	54	54	72	72	90	90	72	72	756
	Mach. And Equip. Charge 10				31	31	31	31	31	31	31	31	31	31	310
	Land Charge				85	85	85	85	85	85	85	85	85	85	850
	Management Charge 11				50	50	50	50	50	50	42	105	147	126	720
TOTAL FIXED COSTS					256	256	220	220	238	238	248	311	335	314	2636
TOTAL COSTS					1084	641	535	514	628	639	715	876	965	911	7508
RETURN ABOVE VARIABLE COSTS					-828	-385	-315	-294	-390	-401	373	1535	2310	1923	3528
RETURN OVER TOTAL COSTS					-1084	-641	-535	-514	-628	-639	125	1224	1975	1609	892
PRESENT VALUE RETURNS 12					-1084	-583	-442	-386	-429	-397	71	628	921	682	-1019
1	No charges for marketing are included due to the wide range of marketing situations found in Ohio.  However, marketing costs should
		be added to your budget.  These costs should include the labor, advertising, supplies, and facilities used in the marketing of the trees.
		Marketing costs may be minimal up to $5/tree in operations with an extensive marketing program.
2	No costs are included for reclamation of the ground after the final year of the Christmas Tree stand.  Reclamation may be necessary depending
		upon the future use of the ground.
3	1000 trees originally planted, 600 harvested, 400 trees died or were not suitable for sale
4	Average price for White Pine.  Scotch Pine may be closer to $10/tree.
5	1000 seedlings planted first year, 150 re-planted second year.  Cost per seedling= $0.30.
6	Shearing costs= $0.125/tree year 3 and 4, $0.25/tree following years.
7	Labor does not include harvesting, marketing or shearing.  See table below for labor requirements and rate.
8	Harvesting includes cutting, baling, transporting to loading area, and loading on vehicle.  Retail harvesting cost = $1.50/tree.
		Wholesale harvesting costs= $1.00/tree.
9	Includes small tools, soil tests, etc…
10	Includes depreciation, interest, and insurance costs.
11	Year 1-6 management charge = $50.  Year 7-10 management charge= 5% of sales.
	Labor Requirements (hours)
					Year
Hourly Charge =			$9.00	/hour	1	2	3	4	5	6	7	8	9	10	TOTAL
Hired Labor					42	27	9	9	9	9	9	9	9	9	141
Operator Labor (Management)					10	10	6	6	8	8	10	10	8	8	84
12	Returns Over Life of Stand and Time Value of Money
	Since a Christmas tree operation occurs over as many as ten years, it is important to examine the time value of money associated with the enterprise.  Time value of money is based on the premise that $1 today (present value) is worth more than $1 in the future.  This is basically because the $1 today can be invested and appreciate in value until some time in the future. Therefore in regards to the Christmas tree enterprise, $1 of return in year one would be worth more than $1 of return in year ten.  Returns in future years need to be discounted to reflect the time value of money.  The following table lists the returns and present value of returns from the enterprise.
								Present Value
				Future Value								Discount Rate =			10%
		Year	1	-$1,084				-$1,084			The discount rate is the degree to which the future values are discounted to reflect current values.  It is generally assumed to be equivalent to the  amount you could earn in alternative investment opportunities.
	1	Year	2	-$641				-$583
	2	Year	3	-$535				-$442
	3	Year	4	-$514				-$386
	4	Year	5	-$628				-$429
	5	Year	6	-$639				-$397
	6	Year	7	$125				$71
	7	Year	8	$1,224				$628
	8	Year	9	$1,975				$921
	9	Year	10	$1,609				$682
		TOTAL		$892				-$1,019
	Over the life of the tree stand, the enterprise will generate $892 in returns.  However, since much of the return comes in future years, it is not the same as having $892 in the operator's pocket today.  The present value column indicates that if the operator was given the equivalent return in one lump sum today (present value), it would be worth -$1,019. The difference of the total returns and the present value returns is a result of the time value of money.