nd farm & ranch business management 2010 region 3 annual report steve metzger carrington...

ND Farm & Ranch Business Management 2010 Region 3 Annual Report

Steve Metzger

Carrington Research Extension Center and

Carrington Public Schools

Carrington, ND

Region IIIFarm Business Management

Programs

Bismarck (Eastern)

Carrington

Jamestown

Casselton (Western)

Wahpeton (Western)

North Dakota Farm Business Management Programs are located in four regions across North Dakota

WestSouth Central

North Central

RRV

WHAT TYPE OF FARMSMAKE UP THE

BASE OF INFORMATION?

Average Farmer Age in Region III

35

37

39

41

43

45

47

49

Ag

e

Crop Acres acres totaled 1,797 in 2010, Up 23% since 1997

0

200

400

600

800

1000

1200

1400

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Own Cash Rent Crop Share

Total Farm Assets, Cost Basis Total farm assets for enrolled farms increased

$167,025 from last year. An increase of 153% since 1997.

1997 $535,0151998 $554,4591999 $631,1962000 $626,6922001 $699,5362002 $657,201 2003 $693,4932004 $758,3142005 $747,6012006 $892,9862007 $1,007,4402008 $1,218,7362009 $1,188,3582010 $1,355,383

Growth of Farm Assets in Region 3, An increase of 153% since 1997

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

Total Farm Liabilities

Total average farm liabilities increased $55,970 from last year. Last decreased in 2009. This is an increase of 99% since 1997.

1997 $ 287,4931998 $ 294,2611999 $ 319,2132000 $ 317,2312001 $ 347,1382002 $ 338,7362003 $ 317,2422004 $ 356,3572005 $ 361,1932006 $ 432,1102007 $ 453,7002008 $ 521,8832009 $ 517,1102010 $ 573,080

Growth of Farm Liabilities Region 3, An increase of 99% since 1997

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Comparing 1997 to 2010Cost Basis Values

Crop land acres, including haylands, have increased 334 acres per farm, up 23%

Asset value per acre has increased from $365.70 to $754.25 per acre of cropland, up 106%

Liabilities have increased from $196.51 to $318.91 per acre of crop land, up 62%

Money Borrowed per Farm Region 3

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

Principal Paid Per Farm Region 3

$0

$100,000

$200,000

$300,000

$400,000

$500,000

Money Borrowed & Repaid, Region 3

$0

$100,000

$200,000

$300,000

$400,000

$500,000

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

BorrowedPaid

CAPITAL ASSETS, REPLACEMENT and

DEPRECIATION

Capital Purchases of Machinery,

Equipment & Farm Vehicles

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000Ave. Low 20% High 20%

Capital Replacement Margin compared to Depreciation/Capital Adjustment

$0

$50,000

$100,000

$150,000

$200,000

$250,000Cap.Available

Cap. Deprec.

Net Worth Change(Change in Retained Earnings)This year we saw a positive net worth change of $199,176 as measured on a cost basis balance sheet.1997 $ -2,9941998 $ 19,8341999 $ 37,7452000 $ 27,8342001 $ 10,7922002 $ 16,8482003 $ 55,1232004 $ 29,2282005 $ 64,1092006 $ 23,4522007 $ 169,3172008 $ 132,7142009 $ 60,5772010 $ 199,176

Net Worth Change, (Retained Earnings Change) Region III

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Cash Farm ReceiptsFarm cash receipts increased approximately $53,142 on the enrolled farms.

1997 $ 222,208 + 0.4%1998 $ 232,647 + 4.7%1999 $ 274,297 + 17.9%2000 $ 264,560 - 3.7%2001 $ 307,971 + 16.4%2002 $ 274,731 - 10.8%2003 $ 312,889 + 13.8%2004 $ 355,869 + 13.7%2005 $ 382,304 + 7.4%2006 $ 395,617 + 3.5%2007 $ 452,249 + 14.3%2008 $ 694,575 + 53.6%2009 $ 597,240 - 14.0%2010 $ 650,382 + 8.9%

Total Change ’97 to ’10 = + 193%

Cash Farm Receipts Region 3

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Where does the money come from? Where does the money come from? $650,382 Cash Income for 2010$650,382 Cash Income for 2010

All Wheats (18%)

Soybeans (25%)

Corn (10%)Barley (4%)

All Sunf. (4%)

Canola (2%)Flax (1%)

Edible Beans (2%)

Other Crops (1%)CRP (0%)

Direct & CC (3%)

LDP & Other (5%)

Bckgrd Beef (4%)

Finish Beef (2%)

Oth.Beef (2%)

All Dairy (4%)

Swine (0%)Cull Lvstk. (1%)

Insur. (5%)Other (2%)

Oth.Lvstk. 1%

Custom2%

Beef Calves 3%

All WheatsSoybeansCornBarleyAll Sunf.CanolaFlaxEdible BeansOther CropsCRPDirect & CCLDP & OtherBeef CalvesBckgrd BeefFinish BeefOth.BeefAll DairySwineCull Lvstk.Oth.Lvstk.CustomInsur.Other

Cash Farm Expenses

1997 $ 183,110 + 11.8%1998 $ 193,613 + 5.7%1999 $ 212,058 + 9.5%2000 $ 220,003 + 3.7%2001 $ 242,972 + 10.4%2002 $ 220,044 - 9.4%2003 $ 241,392 + 9.7%2004 $ 270,147 + 11.9%2005 $ 305,543 + 13.1%2006 $ 314,372 + 2.9%2007 $ 376,242 + 19.7%2008 $ 540,226 + 43.6%2009 $ 444,962 - 17.6%2010 $ 475,020 + 9.8%

Total increase ’97 to ’10 = + 159%

Cash Farm Expenses Region 3

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

Where is the money spent ? Where is the money spent ? Cash Expenses of $475,020 in 2010Cash Expenses of $475,020 in 2010

Land Rent13%

Seed13%

Fertilizer14%

Chemical8%Interest

5%

Fuel & Oil7%

Repairs8%

Fdrs,Pur.5%

Feed5%

Crop Ins.5%

Custom3%

Labor4%

Farm Ins2%

Utilities1%

CCC Buy.0%

Lvstk.Oth.2%

RE Taxes1%

Misc.3%

Leases1% Land Rent

SeedFertilizerChemicalInterestFuel & OilRepairsFdrs,Pur.FeedCrop Ins.CustomLaborFarm InsUtilitiesCCC Buy.Lvstk.Oth.RE TaxesMisc.Leases

Gross Cash Income and Cash Expenses

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Receipts Expense

Total inventory change per farm, Region 3

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Net Farm Income

This is the net cash farm income after being adjusted first for inventory change and then for depreciation.This is the calculated profit for the yearIf more money than indicated on net farm income is spent on family living, personal taxes, and new investments, it must be taken from inventory sales, the capital replacement dollars, new borrowings, or from off farm income. It is also calculated under the cost balance sheet to avoid the effects of inflation or deflation of asset values.

Net Farm Income For Region III

Net farm income for farms in Region III

averaged $273,012

Net farm income for the low 20% of the

farms averaged $18,966

Net farm income for the high 20% of the

farms averaged $812,055

Average Net Farm Income

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Net Farm Income by Profitability Groups

-$300,000

-$100,000

$100,000

$300,000

$500,000

$700,000

$900,000

Ave. Low 20% High 20%

Profitability Based on Crop Acres Only

Average Profit, based on 1,797 acres is $151.93 per acre.

Low Profit, based on 581 acres is $32.64 per acre.

High Profit, based on 4,261 acres is $190.58 per acre.

Average Net Farm IncomeND Farm Business Management, Region 3

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Avg NFI Excl Govt Pmts Excl Govt Pmts & Ins

Cost to produce $1.00 of Accrued Income

This year it cost a Region 3 farmer $.60 (accrual) to produce a dollar’s worth of income, compared to $.77 last year.

High profit farms created a dollar of income for $.55 down from $.65 cents in 2009.

Low profit farms created a dollar of income for $.80 of expenses,down from $1.12 in 2009.

These figures do not include depreciation $.05-$.07

Average Cost per Dollar of Income

0

10

20

30

40

50

60

70

80

90

100Cost per Dollar

Current Ratio by Profitability Group

0

0.5

1

1.5

2

2.5

3

3.5

Ave. Low 20% High 20%

% Return on Assets, Cost BasisND Farm Business Management, Region 3

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

35

Average Low 20% High 20%

% Return on Equity, Cost Basis

-50

-40

-30

-20

-10

0

10

20

30

40

50

Average Low 20% High 20%

Crop Yields, Costs and

Returns for 2010

Net Return for Crops

Does not include Direct or Counter-Cyclical Government Payments.

Does include LDP and Insurance which shows up in the price of the commodity and the other crop income

HRSW Average Yields, Region 3

32 31.2

35.8

25.3

47.251.4

43.839.5

43.847.2

60.3

54.1

36.436.3

25.4

0

10

20

30

40

50

60

70HRSW

HRSW Net Return per Acre onCash Rented Land

26.35

-24.12

-11.96-9.55

9.07

-18.25

3.79

37.4138.03

10.06

22.04

110.69

141.56

65.5

136.96

-$30

-$10

$10

$30

$50

$70

$90

$110

$130

$150

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Spring Wheat Net Return/Acreon Cash Rented Land

Average $ 136.96 at 55.7 Bu.

High 20% $ 228.52 at 42.4 Bu.

Low 20% - $ 3.40 at 62.1 Bu.

Average Price Received, Cash Sales Spring Wheat

1994 3.72 1995 4.04 1996 4.53 1997 3.87 1998 3.33 1999 3.05 2000 2.90 2001 2.99 2002 3.26 2003 3.46 2004 3.48 2005 3.34 2006 3.89 2007 5.05 2008 7.48 2009 6.14 2010 5.45 '94'95'96'97'98'99'00'0102''03'04'05'06'07'08'09'10

Barley Average Yields, Region 3

57.853.5

61.3

55 57.2 59.2

47.7

73.7 71.368

58.5 60.3

76.781.4

77.5

0

20

40

60

80

100

Barley Net Return per Acre onCash Rented Land

28.76

-10.743.46

17.78

-4.66-0.64

51.35

81.4

52.34

16.44

39.1

62.91

241.65

102.99109.32

-$50

$0

$50

$100

$150

$200

$250

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Average Received for Cash Sales

Barley

1994 1.82 1995 2.46 1996 2.80 1997 2.13 1998 1.82 1999 1.91 2000 1.83 2001 1.85 2002 2.14 2003 2.70 2004 2.50 2005 1.95 2006 2.26 2007 3.12 2008 4.75 2009 5.32 2010 4.05

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

'94'95'96'97'98'99'00'01'02'03'04'05'06'07'08'09'10

Soybean Average Yields, Region 3

26.829.1

34.632.9 33.4 33.4

30.0

22.9

35.6

26.3

38.1

32.1 32.1

34.9

0

10

20

30

40

Soybean Net Return per Acre onCash Rented Land

2.1 0.8 1.4711

16.2517.07

56.3847.15

9.51

41.02

-6.22

157.49

77.92

66.69

132.95

-20

0

20

40

60

80

100

120

140

160

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Soybeans Net Return per Acre on Cash Rented Land

Average $ 132.95 at 35.3 Bu.

High 20% $ 249.07 at 38.8 Bu.

Low 20% $ 2.10 at 30.2 Bu.

Average Price Received for Cash Sales

Soybeans

1997 6.26

1998 5.24

1999 4.05

2000 4.19

2001 3.97 2002 4.75 2003 5.59 2004 5.84 2005 5.56 2006 5.45 2007 7.06 2008 9.73 2009 9.30 2010 9.64 $0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

'97'98'99'00'01'02'03'04'05'06'07'08'09'10

Corn Average Yields, Region 3

88.195.5

101.5

114105.6

98.3102.8

63.6

128.8

89.3

119.22

106.78107.7

130.5

108.2

0

20

40

60

80

100

120

140

Corn Net Return/Acre on Cash Rented Land

Average $ 234.21 at 134.2 Bu. Low 20% $ 29.83 at 118.1 Bu.

High 20% $ 411.94 at 146.7 Bu.

Corn Net Return per Acre onCash Rented Land

48.5

29.69

10.6919.34

9.5510.13

45.830.15

-62.24

33.2533.51

192.28

39.53

-32.63

234.21

-80.00

-40.00

0.00

40.00

80.00

120.00

160.00

200.00

240.00

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Average Price Received Cash Sales

Corn

1997 2.33

1998 1.91

1999 1.70

2000 1.64

2001 1.70 2002 1.90 2003 2.03 2004 2.18 2005 1.70 2006 2.09 2007 3.13 2008 4.31 2009 3.14 2010 3.46

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Oil Sunflower Average Yields, Region 3

1523

1378

1646

1066

147613591329

12611173

1841

14121473

160817281715

0

200

400

600

800

1000

1200

1400

1600

1800

2000

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Oil Sunflowers Net Return per Acre

Average $ 107.49 at 1739#

High Profit $ 186.77 at 1999#

Oil Sunflower Net Return per Acre onCash Rented Land

36.57

8.05

33.61

-13.66

15.9515.44

41.63

16.5615.61

75.19

33.34

108.47

121.64

12.46

107.49

-$20

$0

$20

$40

$60

$80

$100

$120

$140

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Average Price Received Cash Sales

Oil Sunflowers

1994 14.84

1995 10.65

1996 11.40 1997 10.94 1998

10.66 1999 8.90 2000

6.50 2001 7.73 2002 10.71 2003 11.32 2004 12.41 2005 12.94 2006 12.68 2007 16.74 2008 21.74 2009 18.18 2010 17.32

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

'94'95'96'97'98'99'00'01'02'03'04'05'06'07'08'09'10

Canola Average Yields, Region 3

1369

12251160

1291 1318

1629

19451852

11901281

1198

1910

1782

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Canola Net Return per Acre onCash Rented Land

10.0815.1316.98

-2.53

-11.93-7.07

7.18

45.2547.13

30.03

-20.13

65.3958.2

74.2

118.33

-$40

-$20

$0

$20

$40

$60

$80

$100

$120

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Average Price Received Cash Sales

Canola

1997 11.20 1998 11.38 1999 8.78 2000 7.03 2001 7.98 2002 9.97 2003 10.34 2004 11.10 2005 9.95 2006 10.68 2007 13.52 2008 17.85 2009 19.57 2010 17.71

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00

$20.00

'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

2010 Income, Expenses & Net Return/Acre on Cash Rented, Does not included direct or counter-cyclical payments.

617

431

378 373360

389

349363

302

164149

257

383

219241 240 241

271240

255237

107 112

221234

212

137 133118 118 109 107

65 5736 35

-50.000.00

50.00100.00150.00200.00250.00300.00350.00400.00450.00500.00550.00600.00650.00700.00

Income Expense Net Return

Return to Overhead per Cash Rented Acre without Direct or Counter-Cyclical Payments, Region 3, 2010

298

182 181172 168

160150

105

8477

6964

44 49 4454 59

42 43 4149

2132

256

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00Return to Ovhd.

Overhead Exp.

2009 Income, Expenses & Net Return/Acre on Cash Rented, Does not included direct or counter-cyclical payments.

491.14

333.37 325.78

297.29310.44

163.37

231.38

276.9252.03

332.09

298.11

230.38251.58

230.6244.94

100.46

207.68

264.43250.11

364.72

193.03

102.99

74.2 66.69 65.5 62.91

23.712.46 1.92

-32.63-50.00

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

500.00

550.00Income Expense Net Return

Return to Overhead per Cash Rented Acre without Direct or Counter-Cyclical Payments, Region 3, 2009

242.31

111.84 111.07101.99

86.02

63.9952.84

34.3419.55

49.2942.61 37.64 44.38

36.4823.11

40.29 40.3832.42

52.18

145.6

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00Return to Ovhd.

Overhead Exp.

Machinery Costs per Acre

Fuel

Repairs

Custom Hire

Equipment Leases

Interest on Intermediate Debt (Machinery portion)

Machinery Depreciation (Crop portion only)

Small Grains at $50-$60, Row Crops $80-$110

Machinery Costs per acre, Cash Rented

66.5860.42

66.6357.63

71.39

54.87

102.58

64.8871.16

60.9852.32

$0.00$10.00$20.00$30.00$40.00$50.00$60.00$70.00$80.00$90.00

$100.00$110.00$120.00

Beef Production in 2010

Direct & Overhead Expenses per Cow, does not include inventory change of $45.72

$0

$100

$200

$300

$400

$500

$600

Other Beef Cow Items:

Total average costs are $524.99/cowAverage Profit per cow at $102.8720% High Profit netted $186.01 per cow20% Low Profit netted -$17.35 per cowAvg. weaning wt. 548 lbs. (20# less than 2009)Pounds weaned per exposed female 500 lbs.Avg. feed cost per cow of $300.88Avg. range or pasture cost per cow $106.65Avg. cost per aum was $16.41Avg. cost to produce a ton of grass hay $50.27Avg. cost to produce a ton of alfalfa hay $41.78Avg. cost to produce a ton of corn silage $24.52 wet, or approximately $60-65/ton for 90% dry matter

Net Return per Cow, Beef Cow Calf

Beef Cow/Calf

1994 47.67 1995 -40.46 1996 -50.16 1997 20.21 1998 8.52 1999 92.51 2000 114.80 2001 101.03 2002 62.82 2003 117.38 2004 187.63 2005 217.72 2006 98.40 2007 108.46 2008 37.75 2009 -11.35 2010 102.87 -$100

-$50

$0

$50

$100

$150

$200

$250

'94'95'96'97'98'99'00'01'02 '03'04'05'06'07'08'09'10

Beef Backgrounding, Net Return/Head

Per Calf

1994 39.35 1995 21.43 1996 .56 1997 26.71 1998 26.62 1999 34.56 2000 16.23 2001 15.52 2002 17.37 2003 -4.35 2004 4.29 2005 26.62 2006 28.90 2007 24.74 2008 .49 2009 11.54 2010 84.63

-$10.00

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

$100.00

'94'95'96'97'98'99'00'01'02'03'04'05'06'07'08'09'10

Net Return per Dairy Cow

Dairy Cow

1994 634.22 1995 640.49 1996 457.99 1997 409.67 1998 799.50 1999 497.41 2000 370.63 2001 403.94 2002 413.60 2003 422.63 2004 713.67 2005 501.60 2006 2007 2008 115.65 2009 -543.74 2010 -$600.00

-$400.00

-$200.00

$0.00

$200.00

$400.00

$600.00

$800.00

'94'95'96'97'98'99'00'01'02'03'04'05'06'07'08'09

Non-Farm Income and

Family Living Information

Non-Farm Income Per Farm

$0$5,000

$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000

Net Non-Farm

Average Family Living Expenditures and Income Taxes for Region 3

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Family Living Expenses Income Taxes

Family Living Expenses, 2.6 members, Based on itemization from 81 Farms

Food & Meals $ 7,222Medical Care $ 3,647Health Insur. $ 4,297Donations $ 1,506Household $ 5,021Clothing $ 1,577Personal $ 6,063Child Care $ 437Gifts $ 1,476Education $ 1,368

Utilities $ 2,332Veh. Exp. $ 3,034Household Rep $ 1,779NF Interest $ 576Life Insurance $ 1,703Miscellaneous $ 1,656Recreation $ 2,723 Prop. Insurance $ 79Other Items $ 650Total of all $47,146

For More Information:

Steve Metzger701-652-2951

s.metzger@ndsu.edu

The North Dakota Farm Business Management Education Program is sponsored by the

North Dakota Department of Career and Technical Education

Thank You!