Transcript Document

Farm/Ranch Business
Management Education
Year 2009
Jerry Tuhy, Instructor
Bismarck State College at DREC
Gross Income (Accrual)
Per farm for year
1200000
1000000
800000
Average
20% High
20% Low
600000
400000
200000
0
2005
2006
2007
2008
2009
Net Income Ratio (%)
percentage of gross $ that is net $
40
30
20
Average
20% High
20% Low
10
0
-10
-20
2005
2006
2007
2008
2009
$ Net Farm Income “Profit”
400000
350000
300000
250000
200000
150000
100000
50000
0
-50000
-100000
Average
20% High
20% Low
2005
2006
2007
2008
2009
$ Net “Non-Farm” Income
40000
35000
30000
25000
Average
20% High
20 % Low
20000
15000
10000
5000
0
2005
2006
2007
2008
2009
Family Living & Income Taxes
$ spent/year
80000
70000
60000
50000
Average
20% High
20% Low
40000
30000
20000
10000
0
2005
2006
2007
2008
2009
Change in Retained Earnings
$ of equity gain per yr (cost basis)
400000
350000
300000
250000
200000
150000
100000
50000
0
-50000
-100000
Average
20% High
20% Low
2005
2006
2007
2008
2009
Farm Debt/Asset Ratio (%) end year
cost basis
90
80
70
60
50
Average
High 20%
Low 20%
40
30
20
10
0
2005
2006
2007
2008
2009
Expense (oper+ Int) as % of
Accrual Income
120
100
80
Average
High 20 %
Low 20 %
60
40
20
0
2005
2006
2007
2008
2009
Term Debt Coverage Ratio
a 100% ratio means “we can make all debt payments”
600
500
400
300
Average
High 20%
Low 20%
200
100
0
-100
2005
2006
2007
2008
2009
Cash Flow 2009
Average
Low Profit
High Profit
Gross Farm Income
393111
309241
783227
Non-Farm Income
31265
37828
16849
Cash Farm Expenses
369086
302768
748578
Family Living
48043
36438
67711
Income, SS Tax
5893
3683
9594
Net Capital Purchases 101287
48219
251411
Money Borrowed
432389
356792
906069
Principal Payments
340912
317932
678329
For more info – see
www.finbin.umn.edu
Crop and Pasture Acres
4500
4000
3500
3000
2500
2000
1500
1000
500
0
w
Lo
ig
h
H
PA Low
ST
U
RE
A
ve
ra
ge
ag
e
H
ig
h
ve
r
A
C
RO
P
2005
2006
2007
2008
2009
Spring Wheat on Cash Rented
(Bu.Yield/Acre)
60
50
40
Average
High
Low
30
20
10
0
2005
2006
2007
2008
2009
Spring Wheat Ave Yields and
Net $ per Acre
50
40
30
20
Ave Yield
Net$/ A
10
0
-10
-20
-30
2005
2006
2007
2008
2009
Costs /acre for Spring Wheat comparing 06,07,08.09
180
160
140
120
100
80
60
40
20
0
'06
'07
'08
'09
Seed
'06
'07
'08
'09
9
10
19
13
Fert. Chem. Insur.
27
28
47
40
16
22
24
27
6
9
19
14
Fuel+ Total
Repair Direct
15
19
23
22
106
121
169
157
Crop Contributions to Overheads Year
2009
300
250
200
150
100
50
C
or
n
Si
l
S
W
Su ht
n
Fl
w
r
A
lf
H
ay
Pe
as
H
ay
M
xd
n
or
C
um
ur
D
Ba
rl
ey
0
Gross
Direct Cost
Gross Margin
$ Net income /Beef Cow
350
300
250
200
150
100
50
0
-50
-100
-150
Average
High 20%
Low 20%
2005
2006
2007
2008
2009
Beef cow costs, returns 2009
per cow (fuel&repairs in OVHD)
average
high profit
$.05
$101
$72
$349
$308
$100
direct
overheads
net $
How are low profit and high profit
Beef herds different ? For 2009 year.
Low Profit High Profit
Value of calf/cow
$469
$521
Depreciation per cow
$66
$64
Direct cost/cow
$465
$355
Overhead expense/cow
$79
$53
Cost per cwt (D&Ovhd)
$112
$78
Net Income per Cow
-$141
+$72
Observations from Dickinson/Glen Ullin combined Rankem50 Farms/Ranches
• NFI median was $ 25,039, 19 farms were negative, 26
were less than $30K. Median FL exp reported was $43K
• Current Ratio median 1.29, 11 farms had less than 1.00
• WC/GR median was 17.1, 28 farms had less than 20%
• Term Debt Coverage Ratio median was .69. 30 farms less
than 1.00
• Operating expense Ratio median was 85% .29 farms over
80%. Interest exp ratio median 6.5%
• Net Farm Income Ratio median was 5.2%, 35 farms under
20%
… Be a student so long as you still have
something to learn, and this will mean all
your life.
~Henry L. Doherty
Thank You!