farm/ranch business management education year 2008 jerry tuhy, instructor dickinson nd at drec
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Region 4 West ND. Farm/Ranch Business Management Education Year 2008 Jerry Tuhy, Instructor Dickinson ND at DREC. Gross Income (Accrual) Per farm for year. Net Income Ratio (%) percentage of gross $ that is net $. $ Net Farm Income “Profit”. $ Net “Non-Farm” Income. - PowerPoint PPT PresentationTRANSCRIPT
Farm/Ranch BusinessManagement Education
Year 2008
Jerry Tuhy, Instructor Dickinson ND at DREC
Gross Income (Accrual)Per farm for year
0100000
200000300000400000
500000600000
700000800000
9000001000000
2004 2005 2006 2007 2008
Average20% High20% Low
Net Income Ratio (%)percentage of gross $ that is net $
-20
-10
0
10
20
30
40
2004 2005 2006 2007 2008
Average20% High20% Low
$ Net Farm Income “Profit”
-100000-50000
0
50000100000
150000200000
250000300000
350000400000
2004 2005 2006 2007 2008
Average 20% High20% Low
$ Net “Non-Farm” Income
0
5000
10000
15000
20000
25000
30000
35000
2004 2005 2006 2007 2008
Average
20% High
20 % Low
Family Living & Income Taxes$ spent/year
0
10000
20000
30000
40000
50000
60000
70000
80000
2004 2005 2006 2007 2008
Average20% High20% Low
Change in Retained Earnings$ of equity gain per yr (cost basis)
-100000-50000
0
50000100000
150000200000
250000300000
350000400000
2004 2005 2006 2007 2008
Average20% High20% Low
Farm Debt/Asset Ratio (%) end year
0
10
20
30
40
50
60
70
80
90
2004 2005 2006 2007 2008
AverageHigh 20%Low 20%
Expense (oper+ Int) as % of Accrual Income
0
20
40
60
80
100
120
2004 2005 2006 2007 2008
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
2004 2005 2006 2007 2008
AverageHigh 20%Low 20%
Cash Flow 2008Average Low Profit High Profit
Gross Farm Income 457323 385759 1057203
Non-Farm Income 32410 33376 27847
Cash Farm Expenses 348463 359452 755158
Family Living 48313 47328 72161
Income, SS Tax 4013 3231 4473
Net Capital Purchases
96291 92474 202668
Money Borrowed 288019 378448 443679
Principal Payments 272368 292852 484073
For more info – see www.finbin.umn.edu
Crop and Pasture Acres
0500
10001500200025003000350040004500
CROP
Avera
geHigh Low
PASTURE
Avera
geHigh Low
20042005200620072008
Spring Wheat Ave Yields and Net $ per Acre
-30
-20
-10
0
10
20
30
40
50
2004 2005 2006 2007 2008
Ave YieldNet$/ A
Costs /acre for Spring Wheat comparing 06,07,08
020406080
100120140160180
'06'07'08
'06 9 27 16 6 15 106
'07 10 28 22 9 19 121
'08 19 47 24 19 23 169
Seed Fert. Chem. Insur.Fuel+Repair
Total Direct
Crop Contributions to Overheads Year 2008
0
50
100
150
200
250
300
Sunflr
Safflr
Durum
Corn S
il
Wntr
Wht
Spr Wht
Barley Pea
s
Alf Hay
GrossDirect CostGross Margin
All Crops combined in 2008 Ave Gross=$196
Cash rented crops, not hay, cost=$182/A
$96
$86
$14
Seed,Fert,Chem,InsOverhead CostsFamily Living
$ Net income /Beef Cow
-150-100
-500
50100150200250300350
2004 2005 2006 2007 2008
AverageHigh 20%Low 20%
Beef cow costs, returns 2008per cow (fuel,repairs in OVHD)
direct overheads net $
average high profit
$351$106
$24
$312
$84
$135
How are low profit and high profitBeef herds different ? For 2008 yr
Low Profit High Profit
Value of calf/cow $470 $595
Depreciation per cow $68 $64
Direct cost/cow $408 $312
Overhead expense/cow $141 $84
Net Income per Cow -$146 +$135