1999 business analysis summary for cash grain farms.

Abstract

The sources of the 51 cash grain farms analyzed in this report were Telfarm/MicroTel at Michigan State University, plus the AgriSolutions offices in East Lansing, Adrian, Mt. Pleasant, and Alpena. Farm types were assigned using the 1992 Census of Agriculture's Standard Industrial Classification (SIC) definitions. Basically, any farm with 50 percent or more of value of farm sales from one item becomes a farm of that type. Cash grain farms have 50 percent or more of value of combined sales from corn, soybeans, wheat, all varieties of navy beans, oats, and other small grains. This report is a summary of the financial and production records kept by cash grain farmers enrolled in the Telfarm/MicroTel record program through Michigan State University Extension., or were accounting clients of AgriSolutions in Michigan. Farm records were included if a Finan summary was completed on 1999 data including beginning and ending balance sheets, plus income and expenses. The summary was included if cash discrepancy was less than 10% of gross cash inflow, and if the debt discrepancy was less than $1,000. The averages are reported in the tables below; it should be recognized that considerable variability exist in the data. The unweighted mean of the net farm income for the 51 farms was $39,049; the standard deviation of the mean was $92,641; and the median was $16,184. The unweighted mean of acrescropped (owned plus rented) on the 46 farms that reported crops and yields was 1,153 acres; the standard deviation of the mean was 1,083 acres and the median was 805 acres. This report has three purposes: 1)to provide statistical information about the financial results on cash grain farms during 1999; 2)to provide production costs for comparative analysis and forward planning; and 3)to provide information on the trends in resource use, income and costs during the last few years. For cash grain farm averages for 1995, see Staff Paper No. 96-86, Michigan Farm Database, New Directions for 1995; it contains averages of 48 cash grain farms calculated with Finansum. Staff Paper No. 97-27, Business Analysis Summary for Cash Grain Farms, contains averages of 37 cash grain farms for 1996. Staff Paper No. 98-21, 1997 Business Analysis Summary for Cash Grain Farms, contains averages of 38 cash grain farms for 1997. Staff Paper No. 99-35, 1998 Business Analysis Summary for Cash Grain Farms, contains averages of 60 cash grain farms for 1998. These staff papers are available from the author, or from the bottom of the list at: http://www.msu.edu/user/nott Finansum allows rapid analysis of group averages with some degree of choice over how the results are presented. I prefer to show the average of the high or low 25 percent by net income, but only if the 25 percent means 6 or more farms. The farm was accepted in the average regardless of whether the farm was a proprietorship, partnership, limited liability company, or corporation. Finansum will produce a variety of report options; I included a subset in this publication. The farms included in the averages below are not a random sample. They kept their financial records with Michigan State University's Telfarm/MicroTel accounting project, or had their accounting supervised by AgriSolutions. A higher percentage of these farms use debt capital than do all farms in the state. The averages may be representative of bigger and better managed cash grain farms. This document may be found and downloaded from the following: http://www.msu.edu/user/nott