Before making a bid on a solar site, you’ll need to know your costs. This month’s Grazing with Cam event was a hands-on exercise where Camren walked us through an example solar grazing budget. An accurate sheep enterprise budget is a critical component of business development, whether in solar grazing or operating as a traditional farmer. 

Using the University of Maryland’s Enterprise Budget Template as a starting point, Camren walked us through the various costs associated with solar grazing. Audience participation was encouraged during this exercise, and we heard from several on the call about how those costs varied between their operations. 

Along with the budget exercise, Camren covered why budget planning is essential for solar grazing. He discussed that solar grazing cannot be treated “like” a business, but it must be run as a business with the proper financial planning and management. Revenue does not automatically equal profit, necessitating the need for proper financial planning.

Next, Camren discussed what a solar grazing budget includes, and that a solar grazing budget must account for sheep production and vegetation management costs separately. Sheep enterprise costs include factors such as feed, minerals, veterinary care, replacement stock, and breeding animals. Vegetation management expenses cover mowing equipment, maintenance costs, fuel, and labor. Grazing budgets also consider capital investments and operational expenses.

Enterprise budgets may present challenges in various areas. Regional differences and client expectations will require different management approaches, leading to differences in budgets. Additionally, contracts may be set up as fixed annual per-acre payments, which may not account for variable mowing requirements in unpredictable years.

Successful budget planning requires a systematic approach. There are a variety of tools that can be used when developing an enterprise budget. When creating your budget, it is important to have detailed tracking and realist projections. You can find resources for creating enterprise budgets here: https://solargrazing.org/resources/solar-grazing-budgets/

Effective budget planning has significant benefits. Knowing your current and estimated costs leads to informed decision-making and planning for risk management. Additionally, a strong budget can strengthen your position for contract negotiations and help with planning for growing an operation.

This open forum was a follow-up to our recent Business Planning for Solar Grazing: Getting Started workshop, led by Texas A&M’s Jake Thorne. Read the summary and access the replay of Jake’s workshop to hear his perspective on basic sheep enterprise planning and a panel discussion featuring experienced solar graziers here.