Skip to main content

Posts

Showing posts from June, 2016

Understanding income and expenses to proactively manage finances

by Betty Berning, Extension Educator
Money. For many people, it’s a topic they’d rather avoid. Often times, money is something they’d like to have more of – especially in this farm economy. Crops, dairy, and livestock operators are all in the midst of tight margins. Data from FinBin, a database of farm-level financial and operation data, support this. For beef finishing operations in Minnesota, the average net return* per head from 2011-2015 was $82.99. The average number of cattle sold out was 223 head. In other words, the return for a farmer’s cattle feeding operation was ~$18,500/year. That’s not a bad return, particularly if there were additional sources of income such as crops, other livestock, or off-farm income. A positive return over a five-year period would make most people happy. Digging deeper into the data, though, reveals a different story. The return per head has varied dramatically by year. (See Table 1) In fact there have been four years with positive returns and only …

Prevented Planting Rules for Corn and Soybeans

By David Bau, Extension Educator

It has been another wet spring in 2016 and many farmers might have not been able to get all of their farmland planted on time, or by final planting dates for crop insurance of May 31st for Corn and June 10th for Soybeans, for most of Minnesota.  Producers have three choices when they are unable to plant the originally planned crop on time.

Plant the original crop with lower yields expectedPlant an alternative crop Abandon the acres and plant a cover crop. There were some areas that received a late frost on emerged crops.  Farmers have several options here:
Leave the damaged crop as isReplant the same cropPlant a different cropAbandon the acres and plant a cover crop. Multi-Peril Crop Insurance policies include a 25 day late planting period.

In Minnesota this period begins after the final planting date which is May 31st for corn and June 10th for soybeans, with June 1 - 25th as the late planting period for corn and June 11th - July 5th as the late plantin…

Minnesota Corn and Soybean Economics

By David Bau, Extension Educator

In Minnesota, corn and soybeans are major crops grown, with the largest acres planted and the highest sales values. Based on USDA/NASS data, the 2015 corn and soybean production values were $4.86 billion and $3.25 billion, respectively. In 2015, the planted acres for corn and soybeans were 8.1 and 7.6 million acres respectively out of a total of 25 million acres in Minnesota.  With over half the crop acres in corn and soybeans the profitability of these two crops drives the rural economy.

Figure 1 below indicates the corn and soybean average input costs per bushel, compared to average sales price received by the farmers in the FINBIN database from southern Minnesota.  The top two lines represent soybeans with the triangle line indicating the average price and diamond indicates the average input costs per bushel.  Farmers want to always see the average price line above the average input cost.  From 2007 through 2013 this was true and the gap between the…

Minnesota Land Rental Rates Document Now Available

By Gary A. Hachfeld, Extension Educator

The Land Rental Rates for Minnesota Counties document is now available on the Agricultural Business Management website at www.extension.umn.edu/agriculture/business. The document includes historical land rental data from farmers who are enrolled in the MnSCU Farm Business Management program and the Southwest Minnesota Farm Business Management Program.

Land rental rates are listed by county and by Minnesota Department of Agriculture regions. Average land rents for years 2011 through 2014 are listed. In addition, land rental rates for 2015 are listed including the average, the median and the 10th and 90th percentiles. The percentiles are a guide as to the range in land rental rates for that year.

Next to the column of 2015 rental rates are listed the 2014 USDA/NASS rental rates. These numbers will be updated later in 2016 and will be added to the document. They act as a comparison to the other rental data.

On the last page of the document is inclu…

How Do Farm Financial Decisions Impact Your Financial Strength?

By Don Nitchie, Extension Educator

It is a good time to evaluate your financial and profitability goals for 2016 and beyond.  Your balance sheet for your operation measures your financial strength, ability to bear business risks when opportunity knocks and your financial progress over time. Changes in your balance sheet directly occur as a result of your overall profitability and where you choose to invest or spend those profits. Profitability and the choices you make are the major drivers of these financial measures. While the financial measures discussed here for many Minnesota farms remain strong, they have also been declining since 2012 for most farms.

Goal--Improve your Liquidity.  Liquidity is the ability of your business to pay all current liabilities/obligations with only the current assets, (grain & market livestock), that are on the books at a point in time.  It is commonly measured by the current ratio = current assets/current liabilities with a ratio of 1.7 or 2.0 or ab…