2007 Analysis Presentation2007 Analysis Presentation

This presentation is designed to show the average financial and production trends for Iowa farms. All of the farmand production trends for Iowa farms. All of the farm operators that contributed data for this presentation are members of the Iowa Farm Business Association and received the benefit of an individual report showing howreceived the benefit of an individual report showing how their farm data compared to these averages. If you feel that you could benefit from knowing these numbers for your operation or if you know someone else who could benefit,operation or if you know someone else who could benefit, please contact one of the consultants listed at www.iowafarmbusiness.org or call the IFBA State Office at 515-233-5802 for more information.at 515 233 5802 for more information.

Presentation SummaryPresentation Summary

General InformationCorn Enterprise DatapSoybean Enterprise DataPork Production Data

Farrow to Finish & Feeder Pig Beef Production DataBeef Production Data

Cow/Calf & Feeder Cattle Financial DataFinancial Data

Accrued Net Farm IncomeAccrued Net Farm Income

140000

160000

180000

80000

100000

120000

20000

40000

60000

01997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Accrued Net Farm Income includes the value of home used products, change in inventory (both value and volume on hand will affect this), and a depreciation charge based on 10% straight line rate with a 10% salvage value on all depreciable items.

Gross Profit Per $1 of ExpenseGross Profit Per $1 of Expense

1 4

1.6

1.8

1

1.2

1.4

0.6

0.8

0.2

0.4

01997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Gross Profits/$ Expense

Power Mach Cost vs Invest. CostPower Mach Cost vs Invest. Cost(Per Acre)

350

250

300

350

150

200

250

50

100

150

0

50

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Mach & Power Cost Mach & Power Investment

Gross Profit Per ManGross Profit Per Man

350000

400000

450000

250000

300000

100000

150000

200000

0

50000

100000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Gross Profits/Man Year Equivalent

IFBA Statewide DataIFBA Statewide Data

Corn Enterprisep

Corn YieldsCorn Yields200

140

160

180

200

80

100

120

140

20

40

60

01997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Corn Yield/Acre

Avg Corn Selling PriceAvg. Corn Selling Price

3

3.5

2

2.5

1

1.5

0

0.5

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Avg Selling Corn Price

Corn Production Value vs Expenses

3

3.5

4

2

2.5

3

1

1.5

2

0

0.5

1998 1999 2000 2001 2002 2003 2004 2005 2006 20071998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Production Value ($/bu.) Total Cash Expense ($/bu.) Depr Cost ($/bu.)

Direct Corn ExpensesDirect Corn Expenses

80

100

40

60

0

20

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Seed Insecticide HerbicideFertilizer & Lime Drying & Storage

IFBA Statewide DataIFBA Statewide Data

Bean EnterpriseBean Enterprise

Bean YieldsBean Yields

50

60

30

40

20

30

0

10

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Bean Yield

Avg Bean Selling PriceAvg. Bean Selling Price

7

8

4

5

6

2

3

4

0

1

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20071997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Avg Selling Bean Price

Bean Production Value vs Expenses

10

12

6

8

2

4

0

2

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Prod ction Val e ($/b ) Total Cash E pense ($/b ) Depr Cost ($/b )Production Value ($/bu.) Total Cash Expense ($/bu.) Depr Cost ($/bu.)

Direct Bean ExpensesDirect Bean Expenses

30

35

15

20

25

5

10

15

01997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Seed Insecticide HerbicideFertilizer & Lime Drying & Storage

IFBA Statewide DataIFBA Statewide Data

Hog EnterprisesHog Enterprises

Farrow/Finish Feed ConvFarrow/Finish Feed Conv.

3.85

3.9

3.95

3.7

3.75

3.8

3.6

3.65

3.45

3.5

3.55

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20071997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Feed Lbs/Gain

Farrow/Finish ReturnsFarrow/Finish Returns

200

250

150

100

0

50

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20071997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Feed Return $100/fed

Feeder Pig ReturnsFeeder Pig Returns

160

180

100

120

140

40

60

80

0

20

40

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Feed Return $100/fed

Farrow/Finish ProfitabilityFarrow/Finish Profitability

50

60

30

40

20

0

10

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Value Cwt Feed Cost/Cwt Produced Cash Cost $/Cwt Depr Cost $/Cwt.

Feeder Pig Feed ConvFeeder Pig Feed Conv.

3.5

3.6

3.3

3.4

3.1

3.2

2.9

3

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Feed Lbs/Gain

Feeder Pig ProfitabilityFeeder Pig Profitability

30

35

40

20

25

30

10

15

0

5

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Value Cwt Feed Cost/Cwt Produced Cash Cost $/Cwt Depr Cost $/Cwt.

IFBA Statewide DataIFBA Statewide Data

Cattle EnterprisesCattle Enterprises

Cow/Calf Feed ReturnsCow/Calf Feed Returns

200

250

150

200

100

0

50

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Feed Return $100/fed

Cow/Calf ProfitabilityCow/Calf Profitability

80

90

100

60

70

30

40

50

10

20

01998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Value Cwt Feed Cost/Cwt Produced Cash Cost $/Cwt Depr cost $/Cwt.

Feeder Cattle ReturnsFeeder Cattle Returns

180

200

120

140

160

60

80

100

0

20

40

01997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Feed Return $100/fed

Feeder Cattle Feed ConvFeeder Cattle Feed Conv.

12

14

8

10

4

6

0

2

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Feed Lbs/Gain

Feeder Cattle ProfitabilityFeeder Cattle Profitability

60

70

80

40

50

60

20

30

0

10

1998 1999 2000 2001 2002 2003 2004 2005 2006 20071998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Value Cwt. Feed Cost/Cwt Produced Cash Cost $/Cwt Depr Cost $/Cwt.

IFBA Statewide DataIFBA Statewide Data

Financial DataFinancial Data

Income vs Net Worth

1400000

1200000

1400000

800000

1000000

400000

600000

0

200000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total Net Worth Accrued Net Farm Income Nonfarm Income

Management ReturnManagement Return

80000100000120000140000

200000

200004000060000

-60000-40000-20000

997

998

999

000

001

002

003

004

005

006

007

199

199

199

200

200

200

200

200

200

200

200

Management Return takes Net Farm Income and subtracts out the following opportunity costs:4% charge on operator’s equity invested in the operation$2000/ th l f th t ’ l b$2000/month salary for the operator’s labor$1300/month salary for operator’s family labor

Management Return vs Accrued Net F I f 2006 b Si GFarm Income for 2006; by Size Group

300000400000 500000

0100000 200000 300000

1 2 3 4 5MR Avg 27506 61524 93106 164829 291298 NFI Avg 57127 107097 154846 243220 399722

0

Size groups 1 to 5 are based on Acres:

Group 1: 0 to 320; Group 2: 321 to 479, Group 3: 480 to719, Group 4: 720 to 1299: Group 5 1299 and up

Current Ratio (CA/CL)Current Ratio (CA/CL)

3

4

2

3

0

1

0Current Ratio 2.742 2.101 2.189 2.535 2.37 2.288 2.43 2.55 2.45 2.79 3.405

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

This ratio looks at the net payment obligation in the next 12 month from cash or assets quickly converted to cash.

Analysis: 2.0 Excellent, 1.5 Fair, 1.0 Weak

Net Farm Income, Income before Depreciation, and I P idInterest Paid

200000250000

50000100000150000

050000

97 99 01 03 05 07

1997

1999

2001

2003

2005

2007

Accrued Net Farm IncomeInterestAccrued Income Before Economic Depr.

Debt to Asset Ratio (TL/TA)Debt to Asset Ratio (TL/TA)

0 3

0.4

0.2

0.3

0.1

0.2

0Debt to Asset Ratio 0.23 0.31 0.31 0.29 0.29 0.3 0.29 0.28 0.28 0.27 0.24

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Debt to Asset RatioTL/TA

0.23 0.31 0.31 0.29 0.29 0.3 0.29 0.28 0.28 0.27 0.24

This represents the proportion of total farm assets owed to creditors, a higher ratio would be an indication of greater risk.

Analysis: <30% Excellent, 30% to 60% Fair, >60% Weak

Rate of Return on EquityRate of Return on Equity

Return on Equity (NFI-UL)/NWReturn on Equity (NFI-UL)/NW

0.15

0 05

0.1

0

0.05

-0.05Return on Equity (NFI-UL)/NW 0.083 -0.03 0.031 0.08 0.029 0.048 0.065 0.091 0.083 0.123 0.135

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Represents rate of return on your equity, ((Net Farm Income - unpaid family labor) / Total Farm Net Worth)

Analysis: >7% Excellent, 7% to 2% Fair, < 2% Weak

Rate of Return on InvestmentRate of Return on Investment

0.10.120.14

0.060.08

0.1

00.020.04

0Return on Investment(NFI+IN-UL)/TA

0.083 0.002 0.045 0.08 0.043 0.053 0.064 0.082 0.076 0.106 0.119

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Represents rate of return on all assets, ((Net Farm Income + interest pd - unpaid family labor) / Total Assets)

Analysis: >7% Excellent, 7% to 2% Fair, < 2% Weak