Bismarck State College at DREC Region 4 West ND Farm/Ranch Business Management Education Year 2009 Jerry Tuhy, Instructor Bismarck State College 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

Family Living & Income Taxes $ spent/year

Change in Retained Earnings $ of equity gain per yr (cost basis)

Farm Debt/Asset Ratio (%) end year cost basis

Expense (oper+ Int) as % of Accrual Income

Term Debt Coverage Ratio a 100% ratio means “we can make all debt payments”

Cash Flow 2009 Average 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

Spring Wheat on Cash Rented (Bu.Yield/Acre)

Spring Wheat Ave Yields and Net $ per Acre

Costs /acre for Spring Wheat comparing 06,07,08.09

Crop Contributions to Overheads Year 2009

$ Net income /Beef Cow

Beef cow costs, returns 2009 per cow (fuel&repairs in OVHD) average high profit $.05 $72 $101 $349 $308 $100

How are low profit and high profit Beef herds different ? For 2009 year. 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!