ND Farm & Ranch Business Management 2009 Region 3 Annual Report Steve Metzger Carrington Research Extension Center and Carrington Public Schools Carrington, ND

Region 3 Farm Business Management Programs Bismarck (Eastern) Carrington Jamestown Casselton (Western) Napoleon Wahpeton (Western)

North Dakota Farm Business Management Programs are located in four regions across North Dakota West South Central North Central RRV

WHAT TYPE OF FARMS MAKE UP THE BASE OF INFORMATION?

Crop Acres acres totaled 1,933 in 2009, Up 32% since 1997

Average Farmer Age Region III

Total Farm Assets, Cost Basis Total farm assets for enrolled farms decreased $30,378 from last year. (Cost Basis) An increase of 122% since $535, $554, $631, $626, $699, $657, $693, $758, $747, $892, $1,007, $1,218, $1,188,358

Growth of Farm Assets in Region 3, An increase of 122% since 1997

Total Farm Liabilities Total average farm liabilities decreased $4,773 from last year. Last decreased in This is an increase of 80% since $ 287, $ 294, $ 319, $ 317, $ 347, $ 338, $ 317, $ 356, $ 361, $ 432, $ 453, $ 521, $ 517,110

Growth of Farm Liabilities Region 3, An increase of 80% since 1997

Comparing 1997 to 2009 Cost Basis Values Crop land acres have increased 470 acres per farm, up 32% Asset value per acre has increased from $ to $ per acre of cropland, up 68 % Liabilities have increased from $ to $ per acre of crop land, up 36%

Money Borrowed per Farm Region 3

Principal Paid Per Farm Region 3

Money Borrowed & Repaid, Region 3

CAPITAL ASSETS, REPLACEMENT and DEPRECIATION

This is not what they mean by “rolling your equipment inventory”!

Capital Purchases of Machinery, Equipment & Farm Vehicles

Capital Replacement Margin compared to Depreciation/Capital Adjustment

Net Worth Change (Change in Retained Earnings) This year we saw a positive net worth change of $60,577 as measured on a cost basis balance sheet $ -2, $ 19, $ 37, $ 27, $ 10, $ 16, $ 55, $ 29, $ 64, $ 23, $ 169, $ 132, $ 60,577

Net Worth Change, (Retained Earnings Change) Region III

Cash Farm Receipts Farm receipts decreased approximately $97,355 on the enrolled farms $ 222, % 1998 $ 232, % 1999 $ 274, % 2000 $ 264, % 2001 $ 307, % 2002 $ 274, % 2003 $ 312, % 2004 $ 355, % 2005 $ 382, % 2006 $ 395, % 2007 $ 452, % 2008 $ 694, % 2009 $ 597, % Total Change ’97 to ’09 = + 169%

Cash Farm Receipts Region 3

Cash Farm Expenses 1997 $ 183, % 1998 $ 193, % 1999 $ 212, % 2000 $ 220, % 2001 $ 242, % 2002 $ 220, % 2003 $ 241, % 2004 $ 270, % 2005 $ 305, % 2006 $ 314, % 2007 $ 376, % 2008 $ 540, % 2009 $ 444, % Total increase ’97 to ’09 = + 143%

Cash Farm Expenses Region 3

Gross Cash Income and Cash Expenses

Total inventory change per farm, Region 3

Net Farm Income This is the net cash farm income after being adjusted first for inventory change and then 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 to avoid the effects of inflation or deflation of asset values.

Net Farm Income For Region 3 Net farm income for farms in Region 3 averaged $99,091 Net farm income for the low 20% of the farms averaged a negative -$80,051 Net farm income for the high 20% of the farms averaged $411,327

Average Net Farm Income

Net Farm Income by Profitability Groups

Profitability Based on Crop Acres Only Average Profit, based on 1,933 acres is $51.26 per acre. Low Profit, based on 1,390 acres is a negative $57.59 per acre. High Profit, based on 4,501 acres is $91.39 per acre.

Net Farm Income in Region 3 Excluding Non CRP Government Payments

Net Farm Income Excluding Non-CRP Gov’t. Payments & Insurance Payments

Average Net Farm Income ND Farm Business Management, Region 3

$ Of Expense per $ of Accrued Income This year it cost a Region 3 farmer 77 cents (accrual) to produce a dollar’s worth of income, compared to 67 cents last year. High profit farms created a dollar of income for 66 cents, up from 60 cents in Low profit farms created a dollar of income for $1.12 of expenses, up from $1.00 in These figures do not include depreciation.

Average Cost per Dollar of Income

Current Ratio by Profitability Group

% Return on Assets, Cost Basis ND Farm Business Management, Region 3

% Return on Equity, Cost Basis

Crop Yields, Costs and Returns for 2009

Net Return for Crops Does not include Direct or Counter- Cyclical Government Payments. Does include LDP and Insurance which shows up in the price of the commodity and the other crop income

Hard Red Spring Wheat

HRSW Average Yields, Region 3

Spring Wheat Net Return/Acre Average $ High 20% $ Low 20% - $ 24.05

HRSW Net Return per Acre on Cash Rented Land

Average Price Received Cash Sales Does include all cash sales. Does not include loan deficiency payments or the direct or counter- cyclical payments.

Average Price Received, Cash Sales Spring Wheat

Barley

Barley Average Yields, Region 3

Barley Net Return per Acre Average $ High Profit $

Barley Net Return per Acre on Cash Rented Land

Average Received for Cash Sales Barley

Soybeans

Soybean Average Yields, Region 3

Soybeans Net Return per Acre Average $ High 20% $ Low 20% - $

Soybean Net Return per Acre on Cash Rented Land

Average Price Received for Cash Sales Soybeans

Soybean Row Width & Production, Carrington Area All Cash Rented Acres Farm Mgmt. Data 02, 03, 04, 05 and 06 <10"10"-18" No. of Fields for 5 Yrs No. of Farms for 5 Yrs.5681 Total Acres for 5 Years23,09157,473 Avg. Yield in Bu Avg. Net Return/Acre$ Excluding Gov't.Pay.

Corn

Corn Average Yields, Region 3

Corn Net Return/Acre Average - $ High 20% $ Low 20% - $

Corn Net Return per Acre on Cash Rented Land

Average Price Received Cash Sales Corn

Oil Sunflowers

Oil Sunflower Average Yields, Region 3

Oil Sunflowers Net Return per Acre Average $ High Profit $ 86.05

Oil Sunflower Net Return per Acre on Cash Rented Land

Average Price Received Cash Sales Oil Sunflowers

To acquire knowledge, one must study; but to acquire wisdom, one must observe. Marilyn vos Savant Canola

Canola Average Yields, Region 3

Canola Net Return per Acre on Cash Rented Land

Average Price Received Cash Sales Canola

Comparing Crop Profitability

2009 Income, Expenses & Net Return/Acre on Cash Rented, Does not included direct or counter-cyclical payments.

Return to Overhead per Cash Rented Acre without Direct or Counter-Cyclical Payments, Region 3, 2009

2008 Income, Expenses & Net Return/Acre on Cash Rented, Does not included direct or counter-cyclical payments.

Machinery Costs per Acre Fuel Repairs Custom Hire Equipment Leases Interest on Intermediate Debt (Machinery portion) Machinery Depreciation (Crop portion only) Small Grains at $45-$60, Row Crops $65-$85

Machinery Costs per acre, Cash Rented

Beef Production in 2009

Direct & Overhead Expenses per Cow, does not include inventory change of $53.99

Other Beef Cow Items: Total average costs are $530.18/cow Average Profit per cow was -$ % High Profit netted $67.17 per cow 20% Low Profit netted -$ per cow Avg. weaning wt. 568 lbs. Pounds weaned per exposed female 511 lbs. Avg. feed cost per cow of $ Avg. range or pasture cost per cow $ Avg. cost per aum was $15.20 Avg. cost to produce a ton of grass hay $33.06 Avg. cost to produce a ton of alfalfa hay $48.29 Avg. cost to produce a ton of corn silage $19.01 wet, or approximately $51-54/ton for 90% dry matter

Net Return per Cow, Beef Cow Calf Beef Cow/Calf

Beef Backgrounding, Net Return/Head Per Calf

Net Return per Dairy Cow Dairy Cow

Non-Farm Income and Family Living Information

Non-Farm Income Per Farm

Average Family Living Expenditures for Region 3

Family Living Expenses, 2.6 members, Based on itemization from 68 Farms Food & Meals $ 6,621 Medical Care $ 3,624 Health Insur. $ 5,076 Donations $ 1,491 Household $ 3,941 Clothing $ 1,617 Personal $ 6,495 Child Care $ 230 Gifts $ 1,748 Education $ 1,160 Utilities $ 2,119 Veh. Exp. $ 2,248 Household Rep $ 1,859 NF Interest $ 634 Life Insurance $ 1,833 Miscellaneous $ 610 Recreation $ 2,566 Prop. Insurance $ 146 Other Items $ 1,008 Total of all $ 45,026

To acquire knowledge, one must study; but to acquire wisdom, one must observe. Marilyn vos Savant

For More Information: Steve Metzger

The North Dakota Farm Business Management Education Program is sponsored by the North Dakota Department of Career and Technical Education

Thank You!