farm/ranch business management education year 2009 jerry tuhy, instructor bismarck state college at...

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!