2. Using Enterprise Budgets and Income Statements to Improve Efficiencies and Profitability of Catfish Farms Carole R. Engle Aquaculture/Fisheries Center University of Arkansas at Pine Bluff

3. Income Statement: Cash-based Accounting ItemValue Revenue$403,200 Cash expenses$610,322 Depreciation$42,707 Total operating expenses$653,029 Cash interest paid$150,579 Total expenses$803,608 Net farm income from operations - $400,408 Engle, UAPB

4. Income Statement: Cash-based Accounting Item20102011 Revenue$403,200$1,209,600 Cash expenses$610,322 Depreciation$42,707 Total operating expenses $653,029 Cash interest paid$150,579 Total expenses$803,608 Net farm income- $400,408$405,992 Engle, UAPB

5. Income Statement: Accrual-based Accounting Item20102011 Revenue$403,200$1,209,600 Change in fish inventory$403,200- $403,200 Total Farm Revenue$806,400 Total operating expenses$653,029 Cash interest paid$150,579 Total expenses$803,608 Net farm income$2,792 Engle, UAPB

6. What does it take to survive the short run? Must be able to sell fish at a price that covers its variable costs, not necessarily all its total costs. Must have adequate liquidity. Enough cash revenue to make payments when due. Must have adequate cash flow. Engle, UAPB

7. Fish Feed Prices Engle, UAPB

8. Realities of $300/ton Feed UAPB Base Budgets: 431-acre farm ($300/ton feed) Farm SizeCost/ VC Cost/ TC 131-acre farm$0.63/lb$0.83/lb 256-acre farm$0.64/lb$0.79/lb 431-acre farm$0.64/lb$0.78/lb 1,007-acre farm$0.64/lb$0.78/lb Engle, UAPB

9. Realities of $350/ton Feed UAPB Base Budgets: 431-acre farm ($350/ton feed) Farm SizeCost/ VC Cost/ TC 131-acre farm$0.69/lb$0.88/lb 256-acre farm$0.70/lb$0.85/lb 431-acre farm$0.70/lb$0.84/lb 1,007-acre farm$0.70/lb$0.83/lb Engle, UAPB

10. Breakeven Prices (based on budgets for 256-acre farm; $300/ton) Engle, UAPB

11. What would happen with different feed and catfish prices? To maximize profits: é At low fish prices, feed rates and stocking rates would decrease. é At low feed prices, feed and stocking rates would increase. é At high feed prices, feed and stocking rates would decrease. Engle, UAPB

12. Effects of Higher Fish Prices & Higher Feed Prices Higher feed prices $$$ Lower stocking & feeding Higher fish prices $$$ Higher stocking & feeding Engle, UAPB

13. Profit-maximizing stocking densities at different fish & feed prices. Engle, UAPB

14. How low should you go? Model results dropped profit- maximizing stocking rates to 5,000/ac at $0.60/lb. Farmers need to stock at rates that ensure financial payments are met. Engle, UAPB

15. Fish grow faster at lower densities. Engle, UAPB

16. Higher stocking rates produce higher yields of smaller fish. MayJune July AugustSept. Oct. Engle, UAPB

17. Difficult to get good growth, turnover Densities need to stay within a feasible range. 5,500/acre 7,500/acre Difficult to make debt payments on ponds Engle, UAPB

18. With High Feed Prices, Essential to get as much gain out of every pound of feed as possible. Engle, UAPB

19. Feed Prices, Economics, & Profitability: Feed Studies Engle, UAPB

20. Breakeven prices across farm sizes, 2009 feed costs. Farm size32% protein ($343/ton) 28% protein ($322/ton) BEP/VCBEP/TCBEP/VCBEP/TC 60-acre $0.67$0.89$0.65$0.87 131-acre $0.68$0.88$0.66$0.86 256-acre $0.69$0.84$0.67$0.82 431-acre $0.69$0.83$0.67$0.81 1,007-acre $0.69$0.83$0.67$0.81 Engle, UAPB

21. Breakeven prices across farm sizes, 2009 feed costs. Farm size32% protein ($343/ton) 28% protein ($322/ton) BEP/VCBEP/TCBEP/VCBEP/TC 60-acre $0.67$0.89$0.65$0.87 131-acre $0.68$0.88$0.66$0.86 256-acre $0.69$0.84$0.67$0.82 431-acre $0.69$0.83$0.67$0.81 1,007-acre $0.69$0.83$0.67$0.81 Engle, UAPB

22. What About Every Other Day Feeding? UAPB study: UAPB study:  Yield of carryover fish was 757 lb/ac less when fed every other lb/ac less when fed every other day. day.  Feed fed was 4,778 lb/ac less. Engle, UAPB

23. What About Every Other Day Feeding? Feed cost Net benefit ($0.65/lb) Net benefit ($0.70/lb) Net Benefit ($0.75/lb) $250/ton$106/ac$68/ac$30/ac $275/ton$165/ac$127/ac$89/ac $300/ton$225/ac$187/ac$149/ac $325/ton$285/ac$247/ac$209/ac $350/ton$344/ac$306/ac$268/ac Engle, UAPB

24. What’s the Down Side to Every Other Day Feeding?  Understocked fish grow very poorly. very poorly.  Every other day feeding better strategy for ponds better strategy for ponds with fish that are closer to with fish that are closer to market size. market size. Engle, UAPB

25. How do I look at my costs? Use the budget spreadsheets included in the training materials. Need to have EXCEL installed on your computer. Substitute your costs in and see the change in the breakeven costs and net returns. Engle, UAPB

26. THERE ARE EXERCISES AVAILABLE ON THIS SITE IF YOU WISH TO PRACTICE WHAT YOU HAVE LEARNED ABOUT INCOME STATEMENTS BEFORE MOVING ON TO THE LAST SEGMENT IN THIS MODULE. Engle, UAPB