1. 2005 Red River Valley Farm Averages
Ron Dvergsten, Dean Management Education
Keith Torgerson, NDSCS

2. Farms in the Annual Red River Valley Annual Report
FINAN, the analysis software, allows us to take a closer look at the farms in a region or state.
We can create summaries of:
Farm Size (based on Gross Income)
Type of Farm (based on 70% of gross income)
Age of Operator
Other special sorts based on location, production practices, enterprise selection and size, etc.

3. Farm Management Education Is Concerned With:
Creating an awareness of the need for accurate financial & enterprise records.
Stimulating individuals and families to establish goals and set priorities.
Developing the farm operator’s understanding of the function of management.

4. Farm Management Education Is Concerned With:
Developing fundamentals of resource management (Financial & Human).
Developing student skills in analyzing and interpreting farm business records.
Developing skills in analyzing data to improve the organization and efficiency of the farm business.

5. Ask Yourself these Questions.
How do I compare?
With my previous farm history?
With local or county information?
With area and statewide information?
Is my farm getting the financial returns that I want or need?
How do I go about making my farm business more efficient or profitable?
This year is more difficult because of how much input costs varied.

6. Total Farm Assets
Total farm assets increased $297,888 over last year. (Cost)
$1,109,799
$1,072,106
$1,162,753
$1,319,822
$1,594,701
$1,545,551
$1,843,439
Should this be a table?

7. Total Farm Liabilities
Total farm liabilities increased $51,356 from last year
$518,780
$516,592
$543,610
$576,908
$681,055
$683,852
$735,208
Should this be a table?

8. Net Worth Change
This year we had a positive Net Worth change of $269,511.
$40,762
$ 1,326
$96,816
$161,030
$165,651
$6,849
$269,511
Should this be a table?

9. Farm Receipts
Farm receipts increased by $88,254 due mainly to the overall good yields and higher commodity prices
$544,816
$599,921
$546,515
$604,651
$729,735
$897,727
$843,024
$931,278
Should this be a table?

10. Government Payments This includes direct, crp, and disaster payments.
$36,881
$54,301
$29,339
$26,431
$36,533
$23,746
$39,737
Table?

11. Farm Expenses Cash farm expenses were up $50,601 2003 $433,152
$433,152
$427,807
$454,623
$508,716
$602,429
$718,042
$651,196
$701,797
Table?

12. How the $791,172 was spent including family living and taxes
Take off the side bar that says “Cash farm expenses” It’s just taking up room, and makes everything smaller

13. Net Farm Income
This is the net cash farm income after being adjusted first for inventory change and than for depreciation
This is the calculated profit for the year
If more money than indicated on net farm income is spent on family living, personal taxes, and new investments, it must be taken from inventory sales, the capital replacement dollars, new borrowings, or from off farm income. It is also calculated under the cost balance sheet.

14. Net Farm Income For Valley
Net farm income for farms in the Valley averaged $374,642 which was a increase of $298,050 from 2009.
Net farm income for the low 20% of the farms averaged a positive $58,079
Net farm income for the high 20% of the farms averaged $875,947
Net farm income for the people in the 40%-60% averaged $287,634

15. Net Farm Income (Profit) By Year
Instead of bottom table, would data labels be easier to read?

16. Crops and Feed Inventory Change
This year we had a positive inventory change of $200,459 compared to a negative change of $70,541 last year

17. $ Expense/$ Income
This year and last year it cost a Valley farmer about 58 cents (accrual) compared to 80.5 cents (accrual) to make a dollar’s worth of income. This number is the operating expense ratio and does not include interest or depreciation expense.

18. Acres Farmed Stayed Steady

19. Machinery Purchased
Machinery purchased for the year was $130,691 up $5,670 from last year

20. Non-Farm Income and Family Living Information

21. Apparent Family Living
Format the data labels as currency

22. Non Farm Income
Average Non Farm Income was $19,157

23. Net Return for Crops
Does not include Government Transition Payments, Acre Payments, or Disaster Payments
Does include Crop Insurance and RA and CRC insurance

24. Crop Yields, Costs and Returns

25. Spring Wheat Yield
This year the spring wheat yield was up 1 bushel per acre bu bu bu bu bu bu bu

26. Spring Wheat Fertilizer Costs Per Acre
Include data labels?

27. Spring Wheat Net Return/Acre
The net return per acre of wheat on cash rented land was positive this year
2010
Average $103.20
Low 20% $30.66
High 20% $209.93

28. Soybeans Net Return/Acre
Soybeans returned $ per acre.
Average yield was 36 bu per acre
Take out the 3-D and lose the extra space at the end

29. Corn Yields & Net Return per Acre
Yield Net Return
bu $11.63
bu $37.54
bu $51.51
bu $140.54
bu $132.49
bu $47.95
bu $196.89

30. Corn Fertilizer Costs Per Acre
Data labels

31. Current Ratio
What is the 3-d column 4?

32. Current Ratio

33. Working Capital Increased

34. Working Capital/Group

35. Rate of Return on Equity/Year (Cost)

36. Rate of Return on Equity/Group

37. Capital Replacement Dollars/Year decreased for each group

38. Capital Replacement Dollars/Group

39. Operating Expense Ratio Increased from last year

40. Net Farm Income/Year

41. Net Farm Income/Group

42. Conclusions about the ratios
Start to compare your information to the last 3 to 5 years of data.
Determine your own trend lines.
Compare your data to the area averages.
How does your business stack up?
Evaluate possible changes if needed.

43. Where are we headed? Major increase in the use technology.
Precision agriculture
Biotechnologies (Livestock & Crops)
Internet
Find new Suppliers, products, markets
Evaluating new technologies or products
E-Commerce
Are you working with partners to use capital more efficiently?
Is your business a low cost producer?
How about value added industries???

44. For more information call 1-800-959-6282 ext. 0797
Farm Business
Management
For more information call ext. 0797
ext 2630

45. A Educational Program of North Dakota Career and Technical Education

46. Thank You