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Showing posts from May, 2018

Managing Farm Profit Margins - The 5% Club Update

By Don Nitchie, Extension Educator

A single 5% improvement may be easy to overlook, but you should not take this small improvement for granted. Increasing revenue 5% while also decreasing costs 5% can have a big impact on your bottom line.  We have studied the potential impact this can have on a Southwest Minnesota Farm Business management Association average farm in 2017.

The table below compares actual outcomes for the average Southwest Minnesota Farm Business Management Association farm in 2017, to the projected 2018 results for the average association farm if it joins “The 5% Club”. Our analysis of “The 5% Club” compares farm performance if the average association farm improves gross revenues by 5% and lowers operating costs by 5% over 2017 for 2018.

It is impressive how just these small changes result in Net Farm Income of an average farm doubling and Term Debt Repayment Capacity improves from 1.3 in 2017 to 2.3 in 2018.  In 2016, the same 5% changes would have almost tripled Net…

Outlook 2018 for Corn and Soybean Crops

By David Bau, Extension Educator

With heavy April snowfall farmers are just getting started planting their 2018 crops with hopes of good yields and good prices.  There has been plenty of spring moisture and now the cropping season will take off in full swing when the soil dries out.  Farmers have been blessed with three years in a row of above average crops. Will 2018 continue the trend?  The good yields helped many farmers survive the low prices and small profits the past couple of years. In Southern Minnesota corn farmers in the Adult Farm Management programs have averaged losses on corn production since 2014, while they were able to generate small profits on soybean from 2014 through 2016 turning to a loss in 2017.

Cash crop prices for 2018 corn are at $3.70 and soybean prices are $9.60 depending on local basis. These prices are 30ȼ better than a year ago for corn and 70ȼ higher for soybeans. December corn futures rallied 25ȼ from the April low price and soybeans futures have incre…