farm/ranch business management education year 2009 jerry tuhy, instructor bismarck state college at...
TRANSCRIPT
Farm/Ranch BusinessManagement Education
Year 2009
Jerry Tuhy, Instructor Bismarck State College at DREC
Gross Income (Accrual)Per farm for year
0
200000
400000
600000
800000
1000000
1200000
2005 2006 2007 2008 2009
Average20% High20% Low
Net Income Ratio (%)percentage of gross $ that is net $
-20
-10
0
10
20
30
40
2005 2006 2007 2008 2009
Average20% High20% Low
$ Net Farm Income “Profit”
-100000-50000
0
50000100000
150000200000
250000300000
350000400000
2005 2006 2007 2008 2009
Average 20% High20% Low
$ Net “Non-Farm” Income
0
5000
10000
15000
20000
25000
30000
35000
40000
2005 2006 2007 2008 2009
Average
20% High
20 % Low
Family Living & Income Taxes$ spent/year
0
10000
20000
30000
40000
50000
60000
70000
80000
2005 2006 2007 2008 2009
Average20% High20% Low
Change in Retained Earnings$ of equity gain per yr (cost basis)
-100000-50000
0
50000100000
150000200000
250000300000
350000400000
2005 2006 2007 2008 2009
Average20% High20% Low
Farm Debt/Asset Ratio (%) end yearcost basis
0
10
20
30
40
50
60
70
80
90
2005 2006 2007 2008 2009
AverageHigh 20%Low 20%
Expense (oper+ Int) as % of Accrual Income
0
20
40
60
80
100
120
2005 2006 2007 2008 2009
Average
High 20 %
Low 20 %
Term Debt Coverage Ratioa 100% ratio means “we can make all debt payments”
-100
0
100
200
300
400
500
600
2005 2006 2007 2008 2009
AverageHigh 20%Low 20%
Cash Flow 2009Average 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
0500
10001500200025003000350040004500
CROP
Avera
geHigh Low
PASTURE
Avera
geHigh Low
20052006200720082009
Spring Wheat on Cash Rented(Bu.Yield/Acre)
0
10
20
30
40
50
60
2005 2006 2007 2008 2009
AverageHighLow
Spring Wheat Ave Yields and Net $ per Acre
-30
-20
-10
0
10
20
30
40
50
2005 2006 2007 2008 2009
Ave YieldNet$/ A
Costs /acre for Spring Wheat comparing 06,07,08.09
020406080
100120140160180
'06'07'08'09
'06 9 27 16 6 15 106
'07 10 28 22 9 19 121
'08 19 47 24 19 23 169
'09 13 40 27 14 22 157
Seed Fert. Chem. Insur.Fuel+Repair
Total Direct
Crop Contributions to Overheads Year 2009
0
50
100
150
200
250
300
Barley
Durum
Corn
Corn S
il
S Wht
Sun Flw
r
Alf Hay
Peas
Hay M
xd
GrossDirect CostGross Margin
$ Net income /Beef Cow
-150-100
-500
50100150200250300350
2005 2006 2007 2008 2009
AverageHigh 20%Low 20%
Beef cow costs, returns 2009per cow (fuel&repairs in OVHD)
direct overheads net $
average high profit
$349$101
$.05
$308
$100
$72
How are low profit and high profitBeef 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 Rankem-
50 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!