finbin benchmarking for success 2007 national extension risk management education conference...

FINBINBenchmarking For Success

2007 National Extension Risk Management Education Conference

Phoenix, Arizona

Dale NordquistCenter for Farm Financial

Management

University of Minnesota

[email protected]

Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.

Farm Financial Database

www.finbin.umn.edu


Benchmark

A measurement or standard that serves as a point of reference by which process performance is measured.


Comprehensive Farm Financial Information System

FINPACK – Individual Farm Financial Analysis

RankEm – Benchmark Individual vs Group

RankEm Central – Group Summary Reports

FINBIN – Dynamic Web-Based Financial Reports


FINBIN Includes Data From:

• Minnesota

• North Dakota

• Nebraska

• Ohio

• Missouri

• Utah

• Wisconsin

• South Carolina


FINBIN Includes:

•3300 producers (70 organic)

•2.88 million acres of cropland

•65,000 dairy cows

•35,500 sows

•654,000 grow/finish pigs


FINBIN Is a Partnership With:

• MN Farm Bus Mgt 2200 farms 1996-pres

• SW MN Farm Mgt Assn 125 farms 1993-pres

• SE MN Farm Mgt Assn 50 farms1993-pres

• ND Farm Bus Mgt 550 farms 1993-pres

• Nebraska Farm Bus Assn 160 farms 1995-pres

• Ohio Extension 50 farms 1997-pres


FINBIN Is a Partnership With:

• Utah Farm Business Mgt 50 farms2004-pres

• Missouri Farm Bus Mgt 100 farms 2003-pres

• Wisc Farm Bus & Prod Mgt 50 farms2002-pres

• South Carolina Farm Mgt Assn 35 farms2005

• Total for 2005 analysis 3300 farms


Data Security

• Whole farm reports -- minimum of 10 farms in each report

• Enterprise reports -- minimum of 5 farms in each report

• Benchmark reports – minimum of 30 farms in each report


5 Steps to Generating a FINBIN Report

• Select a report type/enterprise




• Select location– State

– Group

– Region

– Counties




• Select location

• Select column format– Any characteristic can be chosen as a

column format




• Select location

• Select column format

• Select characteristics– Years

– Type of farm

– etc




• Select location

• Select column format

• Select characteristics

• Run the report


Whole Farm Reports

FINBIN Key Ratios2004 - 2006

<30 Yr Old Crop Farms

51-60 Yr Old Crop

Farms

LiquidityCurrent Ratio 1.25 1.50

Working Cap to Gross 13.2 % 20.7 %

Solvency Debt to Asset Ratio 64 % 46 %

ProfitabilityROA 9.5 % 7.5 %

ROE 16.1 % 9.0 %

RepaymentTerm Debt Coverage 180 % 175 %

Efficiency Asset Turnover Rate 64.6 % 46.2 %


Beef Farms Sales

<$250,000

Beef Farms Sales

>$250,000


Working Cap to Gross 27.4 % 19.9%


ProfitabilityROA 1.7 % 8.1 %

ROE -1.3 % 10.8 %




<50 Yr Old Dairy 200

+Cows

>50 Yr Old Dairy <

100 Cows


Working Cap to Gross 1.7 % 16.2 %


ProfitabilityROA 9.6 % 6.3%

ROE 14.6 % 6.5 %




Crop Enterprise Reports

Corn, Cash Rented, 2006FINBIN Database, So MN

Cost of productionHigh Cost

20 % 20-40% 40-60% 60-80%Low Cost

20%

Yield 158 175 178 180 186

Gross return $476.05 $514.61 $518.48 $517.81 $536.57

Seed 51.96 55.95 54.62 52.99 53.41

Fertilizer 76.58 79.74 73.03 71.52 60.96

Chemicals 27.65 25.79 24.31 22.62 19.92

Rent 113.76 120.11 119.06 111.73 109.41

Total direct cost 388.67 386.83 362.01 340.58 314.36

Total costs 472.36 449.41 420.83 395.43 361.66

Net return to operator lbr & mgt 36.92 98.24 128.61 153.84 205.30

Cost of production 2.95 2.54 2.34 2.16 1.92


Corn, Bt vs Conventional Cash Rented, 2003-2006, FINBIN Database, So MN

100% Bt No Bt

Yield 177.5 166.3

Seed 49.91 41.37

Chemicals 24.09 29.13

Drying fuel 13.20 14.14

Total cost 382.00 368.89

Cost of production 2.09 2.54


Corn, Cash RentedFINBIN Database, All MN

2001 2002 2003 2004 2005 2006 % Diff. 05 vs

01

Seed 36.86 37.08 41.03 43.33 48.49 52.95 44

Fertilizer 49.64 44.60 48.79 56.23 63.66 71.42 44

Chemicals 26.16 26.24 26.54 26.16 24.10 22.32 -15

Fuel & drying

20.08 22.19 17.76 35.38 32.48 32.80 63

Rent 90.05 91.10 93.46 95.38 100.47

103.08

14

Other 97.99 97.21 98.82 100.98

107.85

115.20

18

Total cost 320.78

318.42

322.40

357.43

377.02

397.77

24


Quiz Time!

What is the single most important factor in determining your cost of production? A. Land costB. Family livingC. YieldD. Government paymentsE. Color of your equipment

Soybeans, Cash Rented, 2006

FINBIN Database, So MNCost of Production

High Cost 20% 20-40% 40-60% 60-80%

Low Cost 20%

Yield 46.7 51.8 52.7 53.9 55.7

Gross return 287.96 320.69 325.61 325.39 337.59

Seed 31.07 30.46 29.20 29.03 28.68

Repairs 23.97 19.69 19.98 17.78 15.58

Chemicals 21.05 20.95 17.66 19.51 17.35

Rent 118.39 120.49 116.47 110.40 100.67

Machinery cost 86.51 71.75 68.44 59.83 53.57

Total direct cost 256.47 250.98 233.62 222.52 199.76

Total costs 320.86 303.95 280.99 264.35 236.32

Net return to operator lbr & mgt -3.01 45.36 73.04 88.71 130.97


Soybeans, Roundup vs Conventional

Cash Rented, 2003-2006, FINBIN Database, So MN100% RR No RR

Yield 46.72 45.07

Price 5.92 5.89

Gross return $287.37 $277.74

Seed 27.88 16.71

Chemicals 19.10 26.56

Total direct cost 218.37 212.06

Total costs 264.00 251.54

Net return to operator lbr & mgt 52.11 48.99


Soybeans, Conventional vs. Organic

Owned & Cash Rented, 2006, FINBIN Database, MNConventional Organic

Yield 45.69 14.05

Price 6.03 14.57

Gross return $281.78 $256.40

Seed 30.64 31.86

Chemicals 18.39 --

Total direct cost 181.79 197.34

Total costs 239.61 260.19

Net return to operator lbr & mgt 41.68 -3.78



Livestock Enterprise Reports

Dairy, 2006FINBIN Database, MN

No. of Cows 1-50 51-100 101-200 201-500 >500

Milk per cow 17417 19320 20522 23432 23974

Avg. milk price per cwt. 13.22 13.04 13.26 13.41 13.66

Gross return 2,319 2,546 2,729 3,131 3,095

Feed cost 1,039 1,082 1,124 1,215 1,198

Breeding, vet, supplies 250 242 245 308 288

BST 8 11 20 37 76

Hired labor 59 109 235 409 460

Depreciation and Interest 199 218 270 244 231

Total costs 2,090 2,183 2,424 2,788 2,857

Net return to operator lbr & mgt 229 363 305 343 239


Dairy, 2006FINBIN Database, MN

Production System Conventional Organic

Milk per cow 21,647 12,323

Avg. milk price per cwt. 13.23 22.15

Gross return 2,830 2,802

Feed cost 1,150 942

Breeding, vet, supplies 286 174

BST 33 --

Hired labor 282 236

Depreciation and Interest 239 181

Total costs 2,533 1,980

Net return to operator lbr & mgt 297 822



Farm Financial Database

www.finbin.umn.edu

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