farm/ranch business management education year 2010 jerry tuhy, instructor
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Farm/Ranch BusinessManagement Education
Year 2010
Jerry Tuhy, Instructor Bismarck State College at DREC
Gross Income (Accrual)$ Per farm for year
0
200000
400000
600000
800000
1000000
1200000
1400000
2006 2007 2008 2009 2010
Average20% High20% Low
Net Income Ratio (%)percentage of gross $ that is net $
-20
-10
0
10
20
30
40
2006 2007 2008 2009 2010
Average20% High20% Low
Net Income Ratio% of Gross available for Family living and Increasing Net Worth
0per expInt. & DeprNet Income Ratio
average high profit
64.5%9.3%
26.3%
57.9%
7.9%
34.1%
$ Net Farm Income “Profit”
-100000
0
100000
200000
300000
400000
500000
2006 2007 2008 2009 2010
Average 20% High20% Low
$ Net “Non-Farm” Income
0
10000
20000
30000
40000
50000
60000
2006 2007 2008 2009 2010
Average
20% High
20 % Low
Family Living & Income Taxes$ spent/year
0
10000
20000
30000
40000
50000
60000
70000
80000
2006 2007 2008 2009 2010
Average20% High20% Low
Change in Retained Earnings$ of equity gain per yr (cost basis)
-100000
0
100000
200000
300000
400000
500000
2006 2007 2008 2009 2010
Average20% High20% Low
Farm Debt/Asset Ratio (%) end yearcost basis
0
10
20
30
40
50
60
70
80
90
2006 2007 2008 2009 2010
AverageHigh 20%Low 20%
Term Debt Coverage Ratioa 100% ratio means “we can make all debt payments”
-100
0
100
200
300
400
500
600
2006 2007 2008 2009 2010
AverageHigh 20%Low 20%
Spring Wheat on Cash Rented(Bu.Yield/Acre)
0
10
20
30
40
50
60
2006 2007 2008 2009 2010
AverageHighLow
Spring Wheat Ave Yields and Net $ per Acre
-40
-20
0
20
40
60
80
100
2006 2007 2008 2009 2010
Ave YieldNet$/ A
Costs /acre for Spring Wheat comparing 06 to2010
020406080
100120140160180
'06'10
'06 9 27 16 6 15 106
'10 11 44 25 11 23 160
Seed Fert. Chem. Insur.Fuel+Repair
Total Direct
Crop Contributions to Overheads Year2010
0
50
100
150
200
250
300
350
400
Lentil
s
Corn S
il
Durum
Corn
S Wht
Peas
Hay A
lf
Barley
Sun Flw
r
GrossDirect CostGross Margin
Crop cost increased almost 50% from 2006 to 2010
• Spring Wheat total cost /A. in 2006 was $125, in 2010 was $187
• This is 49.6 % increase
• $125/ 30 bu = 4.16 Break Even, $187/ 30 bu= 6.23 Break Even
• Land rent ave. in 2006 was $26 / A. in 2010 rent was $31/A.
• Sunflower Cost/A in 2006 was$158 in 2010 total cost was $228
• This was 44% increase
• $158/12cwt = 13.15 BE price/cwt $228/12 = $19 BE price
• Land rent for S flowers went from 27/A to $33/ acre during this time
$ Net income /Beef Cow
-150
-100
-50
0
50
100
150
200
250
2006 2007 2008 2009 2010
AverageHigh 20%Low 20%
Beef cow costs, returns 2010per cow (fuel&repairs in OVRHD)
direct overheads net $
average high profit
$343$112
$109
$307$217
$96
How are low profit and high profitBeef herds different ? For 2010 year.
Low Profit High Profit
Value of calf/cow $567 $643
Depreciation per cow $139 $32
Direct cost/cow $451 $353
Overhead expense/cow $93 $50
Cost per cwt (D&Ovhd) $112 $75
Net Income per Cow -$95 +$217
More info on these websites
www.finbin.umn.edu- Sort data by State, region, year, etc.
Whole farm, crop or livestock enterprise data available
Ifsam.cffm.umn.edu- learn to use financial statements in day-to-day management. understand how to interpret financial statements.
www.ndfarmmanagement.com- Instructor contacts, regional data, news, resources for farm/ranch management.
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