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.