Financial Characteristics of North Dakota Farms 2000-2009

Abstract

The performance of over 500 North Dakota farms, 2000-2009, is summarized using 16 financial measures. Farms are categorized by geographic region, farm type, farm size, gross cash sales, farm tenure, net farm income, debt-to-asset, and age of farmer to analyze relationships between financial performance and farm characteristics. Five-year averages, 2004-2008, are also presented. In 2009, median and average acreage per farm was 1,995 and 2,516, respectively. Median and average cash farm revenue was $430,321 and $558,305, respectively. Over 70% of farms were crop farms and 42 percent of farms had gross sales exceeding $500,000. Median age of farm operators was 47. Median net farm income in 2009, $47,547, was down sharply from $114,520 in 2008 and $127,791 in 2007. Financial measures for 2007-2008 were much superior to those in other years for the 2000-2009 period. The Red River Valley and crop farms typically had stronger profitability, solvency, and repayment capacity from 2000 to 2009 than other regions and farm types, respectively. Exceptions were 2007 and 2009 when the north central region had the best regional performance and 2005 when the south central region and livestock farms had better performance. The 2009 median net farm income was $70,912 for crop farms and $11,392 for livestock farms. Farms with sales less than $250,000 were over twice as likely to have debt-to-asset higher than 70 percent than were farms with sales greater than $250,000. Farms that own some crop land, but less than 40 percent were more likely to be crop farms, farm more acreage, have larger sales, and be more profitable. As expected, solvency and percent of crop land owned increased with farmer age. Rate of return on equity greater than rate of return on assets, which indicates that debt capital was employed profitably, was achieved nine years in the past decade by farms with greater than $500,000 gross cash income but never by the farm group with less than $100,000 gross cash income. Median net farm income as a percent of gross revenue was the lowest of the decade in 2009, 13.4 percent, after peaking at 30.6 percent in 2007. It ranged from 14.0 to 19.6 percent from 2001 to 2006.