A.E. Ext. 92·6
MAY 1992
>
a:
<C
en
>en
WEST RN PLAI
REGION
1991
t -..
_
1951
en
. ;.• .• .•. . . .•. . •.•.•.• • • • • • • • • I•I:'m:E.B~:sl.I
....... i i
\~H/
·..···}!:·~'Dffi··
en
• •lt't~:l: :I:!1
• • 'I!!
.!! •••••••••••••
:.~
:,;; ,: .: :., ';,.: :;: : ';.;.;;.: .: .: .: ;:::.: .: .: : .:;: : .: .: .: , : : .: .: .',: ..:>;:;:::::;:;:::;:
: : : : -:-:-:-:
,/.;," :•• /
~1.Jfi!ii~i~t(~l:11
Stuart F. Smith
Linda D. Putnam
George Allhusen
Jason Karszes
David Thorp
Department of Agricultural Economics
New York State College of Agriculture and life Sciences
A Statutory College of the State University
Cornell University, Ithaca, New York 14853-7801
•
It is the policy of Cornell University actively to support equality
of educational and employment opportunity. No person shall be
denied admission to any educational program or activity or be
denied mployment on the basis of any legally prohibited dis­
crimination involving, but not limited to, such factors as race,
color, creed, religion, national or ethnic origin, sex, age or
handicap. The University is committed to the maintenance of
affirmative action programs which will assure the continuation
of such equality of opportunity.
1991 DAIRY FARM BUSINESS SUMMARY
WESTERN PLAIN REGION
Table of Contents
Page
.
1
Program Obj ectives
.
1
Format Features
.
1
.
2
Business Characteristics
.
2
Income Statement
.
2
Profitability Analysis
.
4
Farm and Family Financial Status
.
7
Cash Flow Statement
.
10
Repayment Analysis
.
11
Cropping Analysis
.
13
Dairy Analysis
.
15
INTRODUCTION
SUMMARY AND ANALYSIS OF THE FARM BUSINESS
Capital and Labor Efficiency Analysis
17
COMPARATIVE ANALYSIS OF THE FARM BUSINESS
18
Progress of the Farm Business
.
18
19
Regional Farm Business Chart
New York State Farm Business Chart
.
20
Financial Analysis Chart
.
22
Comparisons by Type of Barn and Herd Size
.
23
Herd Size Comparisons
.
23
IDENTIFY AND SET GOALS
.
29
GLOSSARY AND LOCATION OF COMMON TERMS
.
31
INDEX
.
34
•
1991 DAIRY FARM BUSINESS SUMMARY
WESTERN PLAIN REGION*
INTRODUCTION
Dairy farmers throughout New York State have been participating in
Cornell Cooperative Extension's farm business summary and analysis program
since the early 1950's. Managers of each participating farm business
receive a comprehensive summary and analysis of the farm business. The
information in this report represents an average of the data submitted from
dairy farms in the Western Plain region.
Program Ob1ective
The primary objective of the dairy farm business summary, DFBS, is to
help farm managers improve the business and financial management of their
business through appropriate use of historical farm data and the
application of modern farm business analysis techniques. In short, DFBS
identifies business and financial information farmers need and demonstrates
how it should be used in identifying and evaluating strengths and
weaknesses of the farm business.
Format Features
This regional report follows the same general format as in the 1991
DFBS printout received by all participating dairy farmers. The analysis
tables have an open column or section labeled My Farm. It may be used by
any dairy farm manager who wants to compare his or her business with the
average data of this region. A DFBS Data Check-in Form can be used by non­
DFBS participants to summarize their businesses.
This report features:
(1) an income statement including accrual adjustments for farm business
expenses and receipts, as well as measures of profitability with and
without appreciation,
(2) a complete balance sheet with analytical ratios;
(3) a cash flow summary including debt repayment ability;
(4) an analysis of crop acreage. yields. and expenses;
(5) an analysis of dairy livestock numbers. production. and expenses; and
(6) a capital and labor efficiency analysis.
Micro DFBS, a computer program which enables Cooperative Extension
agents and specialists to calculate and print individual farm business
reports in their offices, is now being used by the dairy farm management
field staff for nearly. 100 percent of the farms cooperating. This
innovative approach provides faster processing of farm record data and
increased use of the DFBS in farm management programs.
*The Western Plain Region of New York State, with the number of participat­
ing farms in parentheses, is comprised of Erie (5), Genesee (8),
Livingston (9), Monroe (1), Niagara (2), Orleans (2), and Wyoming (21)
counties. This report was written by Stuart F. Smith, Senior Extension
Associate, Farm Management. Linda Putnam was in charge of data
preparation. Cindy Farrell and Beverly Carcelli prepared the publication.
Farm business data were collected by Cooperative Extension agents Jason
Karszes, David Thorp and Regional Specialist George Allhusen.
2
SUMMARY AND ANALYSIS OF THE FARM BUSINESS
Business Characteristics
Planning the optimal management strategies is a crucial component of
operating a successful farm. Various combinations of farm resources,
enterprises, business arrangements, and management techniques are used by the
dairy farmers in this region. The following table shows important farm
business characteristics and the number of farms with these characteristics.
BUSINESS CHARACTERISTICS
48 Western Plain Region Dairy Farms, 1991
Type of Farm
Number
Dairy
46
Part-time dairy
o
Dairy cash-crop
2
Part-time cash-crop dairy
0
Type of Ownership
Owner
Renter
Number
44
Type of Business
Single proprietorship
Partnership
Corporation
Number
Business Record System
ELFAC II
Account Book
Agrifax (mail-in only)
On-Farm Computer
Other
Number
4
Type of Barn
Stanchion/Tie-Stall
Freestall
Combination
Number
Milking System
Bucket & carry
Dumping station
Pipeline
Herringbone parlor
Other parlor
Number
Milking Freguency
2x/day
3x/day
Other
Number
Production Records
DHIC
Owner-Sampler
Other
None
Number
39
7
2
6
33
9
o
o
15
27
6
24
12
12
1
13
8
22
4
30
14
4
o
The averages used in this report were compiled using data from all the
participating dairy farms in this region unless noted otherwise. There are
full-time dairy farms, part-time farms, dairy cash-crop farms, farm renters,
partnerships, and corporations included in the average. Average data for
these specific types of farms are presented in the State Business Summary.
Income Statement
In order for an income statement to accurately measure farm income, it
must include cash transactions and accrual adjustments (changes in accounts
payable, accounts receivable, inventories, and prepaid expenses).
Cash paid is the actual cash outlay during the year and does not necessarily
represent the cost of goods and services actually used in 1991.
Change in inventory: Increases in inventories of supplies and other purchased
inputs are subtracted in computing accrual expenses because they represent an
increase in purchased inputs not actually used during the year. Decreases in
purchased inventories are added to expenses because they represent inputs
purchased in a prior year and used this year.
•
3
CASH AND ACCRUAL FARM EXPENSES
48 Western Plain Region Dairy Farms, 1991
Change in
Inventory
Change in
Cash
or Prepaid
Accounts
Paid +
Payable
Expense* +
$598
$98,989
$-174 «
Expense Item
Hired Labor
Feed
Dairy grain & cone.
Dairy roughage
Nondairy
Machinery
Mach. hire, rent/lease
Machinery repairs/parts
Auto expo (farm share)
Fuel, oil & grease
Livestock
Replacement livestock
Breeding
Vet & medicine
Milk marketing
Cattle lease/rent
Other livestock expense
Crops
Fertilizer & lime
Seeds & plants
Spray, other crop expo
Real Estate
Land/b1dg./fence repair
Taxes
Rent & lease
Other
Insurance
Telephone (farm share)
Electricity (farm share)
Interest paid
Miscellaneous
Total Operating
Expansion livestock
Machinery depreciation
Building depreciation
TOTAL ACCRUAL EXPENSES
153,628
5,736
308
6,865
28,408
561
13,718
6,755
6,543
17,950
20,381
191
30,444
14,973
9,339
9,695
6,309
354
Accrual
Expenses
$99,413
1,754
66
161,691
6,156
308
-243 «
-142
186
298
-238
178
6,808
28,564
561
13,658
o
o«
o«
o
o
-18
118
12 «
266
88
416
109
250
357
6 ,613
18,484
20,502
191
31,051
1,333
-77
735
1,017
310
-15
17,323
9,572
10,415
o«
o
7 ,021
7,300
11,096
14,864
-28
143 «
64 «
179
185
77
7,451
11 ,424
15,005
7,841
68 «
-14
-15
160
783
59
$7,042
7,895
982
12,322
48,711
f197
12,162
47,928
9,607
$536,279
20,578
o«
o«
o«
-45
$8,421
o«
9
9,621
$551,742
20,587
30,696
29,204
$632,229
Change in prepaid expenses (noted above by «) is a net change in non-inven­
tory expenses that have been paid in advance of their use, for example, 1992
rent paid in 1991. If 1991 funds used to prepay 1992 rent exceeded the
amount of 1991 rent prepaid in 1990, the amount of this excess is entered as
a negative number to exclude it from 1991 accrual rental expenses. The
excess prepaid rent should be charged against the future year's business
operation. A decrease in prepaid rent is added to accrual expenses because
it represents use of resources during this year that were paid for in past
years.
Change in accounts payable: An increase in accounts payable from beginning to
end of year is added and a decrease is subtracted when calculating accrual
expenses.
Accrual expenses are the costs of inputs actually used in this year's produc­
tion. They are the total of cash paid, as well as changes in inventory,
prepaid expenses, and accounts payable.
•
4
Receipt Item
CASH AND ACCRUAL FARM RECEIPTS
48 Western Plain Region Dairy Farms, 1991
Change in
Cash
Change in
Accounts
Receipts + Inventory + Receivable
Milk sales
$570,518
Dairy cattle
44,731
$26,005
Dairy calves
12,426
livestock
71
Other
955
Crops
4,435
6,751
Government receipts
-182*
7,048
Custom machine work
887
Gas tax refund
258
Other
8,130
Less nonfarm noncash cap.**
94
( -)
Total Receipts
$30,235
$651,704
$3,292
110
6
0
89
-11
0
112
359
$3,957
Accrual
Receipts
$573,810
70,846
12,432
1,026
11,275
6,855
887
370
8,489
(-)
94
$685,896
*Change in advanced government receipts.
**Gifts or inheritances of cattle or crops included in inventory.
Cash receipts include the gross value of milk checks received during the year
plus all other payments received from the sale of farm products, services,
and government programs. Nonfarm income is not included in calculating farm
profitability.
Changes in inventory of assets produced by the business are calculated by
subtracting beginning of year values from end of year values excluding appre­
ciation. Increases in livestock inventory caused by herd growth and/or qual­
ity are added, and decreases caused by herd reduction and/or quality are
subtracted. Changes in inventories of crops grown are also included.
Changes in advanced government receipts are calculated by subtracting the end
year balance from the beginning year balance (balances are listed with the
current liabilities on the Balance Sheet).
Changes in accounts receivable are calculated by subtracting beginning year
balances from end year balances. The January milk check for this December's
marketings compared with the previous January/s check is included as a change
in accounts receivable.
Accrual receipts represent the value of all farm commodities produced and
services actually generated by the farm business during the year.
Profitability Analysis
Farm operators contribute labor, management, and capital to their
businesses and the combination of these resources selected determines income.
Farm profitability can be measured as the return to all family resources or
as the return to one or more individual resources such as labor and
management.
•
5
Net farm income is the return to the farm operators and other unpaid family
members for their labor, management, and equity capital. It is the farm
family's net annual return from working, managing, financing, and owning the
farm business. This is not a measure of cash available from the year's
business operation. Cash flow is evaluated later in this report.
Net farm income is computed both with and without appreciation. Appreciation
represents the change in values caused by annual changes in prices of live­
stock, machinery, real estate inventory, and stocks and certificates (other
than Farm Credit). Appreciation is a major factor contributing to changes in
farm net worth and must be included for a complete profitability analysis.
NET FARM INCOME
48 Western Plain Region Dairy Farms, 1991
Item
Average
Total accrual receipts
Appreciation: Livestock
Machinery
Real Estate
Other Stock/Certificates
Total Including Appreciation
Total accrual expenses
Net Farm Income (with appreciation)
Net Farm Income (without appreciation)
My Farm
$685,896
4,548
1,239
21,477
1,901
$715,061
- 632,229
$82,832
$53,667
$--­
$--­
$--­
$---­
The chart below shows the relationship between net farm income per cow
(with appreciation) and pounds of milk sold per cow. Generally, farms with a
higher production per cow have higher profitability per cow.
Net Farm Income/CoW' and Milk/CoW'
48 Western Plain Farms, 1991
1400 . - - - - - - - - - - - - - - - - - - - - - - - - - - ,
1200
..-=
•
•
1000
:;
...
"i
~
S
•
•
•
800
•
•
•
600
~
i!!
j
--.
~
400
200
•
Z
•
•
0
•
•
-200
•
•
-400
14000
16000
18000
20000
Pounds Milk Per Co,"",
22000
24000
6
Return to operators' labor, mana~ement, and equity capital measures the total
net farm income for the farm operator(s), It is calculated by deducting a
charge for unpaid family labor from net farm income. Operators' labor is not
included in unpaid family labor. Return to operators' labor, management, and
equity capital has been calculated both with and without appreciation.
Appreciation is an important part of the return to ownership of farm assets.
RETURN TO OPERATORS' LABOR. MANAGEMENT. AND EQUITY
48 Western Plain Region Dairy Farms, 1991
Item
Net farm income
Family labor unpaid
@ $1,300 per month
Return to operators' labor,
management, & equity
With
Apprec.
Without
Apprec.
$82,832
$53,667
- 2,080
- 2,080
$80,752
$51,587
My Farm
With
Without
Apprec.
Apprec.
$---­
$--­
$---­
$---­
Labor and mana~ement income is the return which farm operators receive for
their labor and management used in operating the farm business. Appreciation
is not included as part of the return to labor and management because it
results from ownership of assets rather than management of the farm business.
Labor and management income is calculated by deducting the opportunity cost
of using equity capital, at a real interest rate of five percent, from the
return to operators' labor, management, and equity capital excluding
appreciation. The interest charge of five percent reflects the long-term
average rate of return above inflation that a farmer might expect to earn in
comparable risk investments.
LABOR AND MANAGEMENT INCOME
48 Western Plain Region Dairy Farms, 1991
Item
Return to operators' labor, management,
& equity without appreciation
Real interest @ 5% on $845,810
average equity capital
Labor & Management Income
Labor & Management Income per
1.66 Operator/Manager
My Farm
$51,587
$---­
- 42,291
$9,296
$---­
$5,600
$---­
•
7
Return on equity capital measures the net return rema1n1ng for the farmer's
equity or owned capital after a charge has been made for the owner-operator's
labor and management. The earnings or amount of net farm income allocated to
labor and management is the opportunity cost of operators' labor and
management estimated by the cooperators. Return on equity capital is
calculated with and without appreciation. The rate of return on equity
capital is determined by dividing the amount returned by the average farm net
worth or equity capital. Return on total capital is calculated by adding
interest paid to the return on equity capital and then dividing by average
farm assets to calculate the rate of return on total capital.
RETURN ON EQUITY CAPITAL AND RETURN ON TOTAL CAPITAL
48 Western Plain Region Dairy Farms, 1991
Item
Return to operators' labor, management,
& equity capital with appreciation
Value of operators' labor & management
Return on equity capital with appreciation
Interest paid
Return on total capital with appreciation
Return on equity capital without appreciation
Return on total capital without appreciation
Rate of return on average equity capital:
with appreciation
without appreciation
Rate of return on average total capital:
with appreciation
without appreciation
Average
$80,752
- 45,919
$34,833
$48,710
$83,543
$5,668
$54,378
My Farm
$
$
$
$
$
$
4.12%
.67%
%
%
5.79%
3.77%
%
%
Farm and Family Financial Status
The first step in evaluating the financial position of the farm is to
construct a balance sheet which identifies all the assets and liabilities of
the business. The second step is to evaluate the relationship between
assets, liabilities, and net worth and changes that occurred during the year.
Financial lease obligations are included in the balance sheet. The present
value of all future payments is listed as a liability since the farmer is
committed to make the payments by signing the lease. The present value is
also listed as an asset, representing the future value the item has to the
business. For 1991, leases were discounted by 10.0 percent.
Advanced government receipts are included as current liabilities. Government
payments received in 1991 that are for participation in the 1992 program are
the end year balance and payments received in 1990 for participation in the
1991 program are the beginning year balance.
•
8
1991 FARM BUSINESS & NONFARM BALANCE SHEET
48 Yestern Plain Region Dairy Farms, 1991
Farm Liabilities
Farm Assets
Jan. 1
Current
Farm cash, checking
& savings
$10,766
Accounts rec.
42,257
Prepaid expo
2,537
Feed & supplies
137,969
Total
$193,529
Intermediate
Dairy cows:
owned
$218,069
leased
244
Heifers
100,550
Bulls/other 1vstk.
2,119
Mach./eq. owned
249,384
Mach./eq. leased
3,178
Farm Credit stock
8,774
Other stock/cert.
34,843
Total
Long-Term
Landjbuildings:
owned
leased
Total
Total Farm
Assets
$617,161
$593,559
515
Dec. 31
$13,650
46,328
2,666
133,853
$196,497
$243,495
130
105,780
2,087
255,337
810
9,732
37,314
& Net Yorth
Jan. 1
Dec. 31
Current
Accounts payable
$13,746
Operating debt
44,677
Short-term
11,417
Advanced govt. rec.
o
$20,796
39,090
11,883
182
--­
Total
$69,840
Intermediate
Structured debt
1-10 years
$226,147
Financial lease
3,422
(cattle/mach.)
Farm Credit stock
8,774
$71,951
$233,849
Total
$238,343
$244,521
Long Term
Structured debt
>10 yrs
Financial lease
(structures)
$252,740
$317,101
515
85
Total
Total Farm Liab.
FARM NET YORTH
$253,255
$561,438
$843,326
$317,186
$633,658
$848,294
940
9,732
$654,685
$630,685
85
$594,074
$630,770
$1,404,764 $1,481,952
Nonfarm Assets, Liabilities & Net Yorth (Average of 26 farms reporting)
Liabilities
Assets
Jan. 1
Dec. 31
& Net Yorth
Jan. 1
Dec. 31
Personal cash, chkg.
& savings
$8,534
Cash value life ins.
6,312
Nonfarm real estate
9,215
Auto (personal sh.)
3,995
Stocks & bonds
5,004
Household furn.
7,162
All other
19,973
Total Nonfarm
$60,194
Nonfarm Liab.
$9,946
7,062
9,215
4,755
7,380
8,488
22,398
$69,245
NONFARM NET YORTH
Farm & Nonfarm Assets. Liabilities. & Net Yorth*
$2,768
$3,052
$57,426
$66,193
Jan. 1
Dec. 31
Total Assets
$1,464,958
$1,551,197
564,206
636,710
Total Liabilities
$914,487
TOTAL FARM & NONFARM NET YORTH
$900,752
*Assumes that average nonfarm assets and liabilities for the nonreporting
farms were the same as for those reporting.
9
Balance sheet analysis involves examination of relative asset and debt levels
for the business. Percent equity is calculated by dividing end of year net
worth by end of year assets and multiplying by 100. The debt to asset ratio
is compiled by dividing liabilities by assets. Low debt to asset ratios
reflect business solvency and the potential capacity to borrow. Debt levels
per productive unit represent old standards that are still useful if used
with measures of cash flow and repayment ability. The change in farm net
worth without appreciation is an excellent indicator of farm generated
financial progress.
BALANCE SHEET ANALYSIS
48 Western Plain Region Dairy Farms, 1991
Item
Average
Financial Ratios - Farm:
Percent equity
Debt/asset ratio: total
long-term
intermediate/current
Change in Net Worth:
Without appreciation
With appreciation
Farm Debt Analysis:
Accounts payable as % of total debt
Long-term liabilities as a % of total debt
Current & inter. 1iab. as a % of total debt
Farm Debt Levels:
Total farm debt
Long-term debt
Intermediate & current debt
Per Cow
$2,535
1,269
1,266
My Farm
57%
.43
.50
.37
----_%
$-24,197
4,968
$--­
$--­
3%
50%
50%
Per Tillable
Acre Owned
$1,837
919
917
----_%
---_%
----_%
Per Cow
Per Tillable
Acre Owned
$---
$---­
Farm inventory balance is an accounting of the value of assets used on the
balance sheet and the changes that occur from the beginning to end of year.
Changes in the livestock inventory are included in the dairy analysis. Net
investment indicates whether the capital stock is being expanded (positive)
or depleted (negative).
FARM INVENTORY BALANCE
48 Western Plain Region Dairy Farms, 1991
Item
Value beg. of year
Purchases
Gift/inheritance
Lost capital
Sales
Depreciation
Average of Region's Farms
Real Estate
Machinery & Equipment
$249,384
$593,559
+
$78,950*
0
25,193
8,562
29,204
+
$37,384
0
•
1,974
30,696
Net investment
Appreciation
15,991
+ 21,134**
+
Value end of year
$630,685
$255,337
*$17,188 land and $61,762 buildings and/or depreciable improvements.
**Exc1udes $343 of appreciation on assets sold during the year.
4,714
1,239
10
Cash Flow Statement
Completing an annual cash flow statement is an important step in
understanding the sources and uses of funds for the business. Understanding
last year's cash flow is the first step toward planning and managing cash
flow for the current and future years.
The annual cash flow statement is structured to compare all the cash
inflows including beginning balances with all the cash outflows including
ending balances for the year. By definition, total cash inflows must equal
total cash outflows when beginning and ending balances are included. Any
imbalance is, therefore, the error from incorrect accounting of cash inflows
and cash outflows. Whenever an imbalance exists, all other financial
measures may also be in error.
ANNUAL CASH FLOW STATEMENT
48 Western Plain Region Dairy Farms, 1991
Item
Average
My Farm
Cash Inflows
Beginning farm cash, checking & savings
Cash farm receipts
Sale of assets: Machinery
$
10,766
1,974
Real estate
7,906
Other stock & certificate
1,636
Money borrowed (intermediate & long-term)
169,920
5,393
Money borrowed (short-term)
Increase in operating debt
0
Nonfarm income
5,340
Cash from nonfarm capital used in the business
Money borrowed - nonfarm
2,621
660
Total
Cash Outflows
Cash farm expenses
Capital purchases: Expansion livestock
Machinery
Real estate
Other stock & certificate
Principal payments (intermediate & long-term)
Principal payments (short-term)
Decrease in operating debt
Personal withdrawals & family expenditures
including nonfarm debt payments
Ending farm cash, checking & savings
Total
Imbalance (error)
$---­
651,703
$857,919
$---­
$536,279
20,578
37,384
78,950
2,206
97,857
4,927
5,587
$---­
60,483
13,650
$857,899
$ 20
$---­
$---­
11
Repayment Analysis
A valuable use of cash flow analysis is to compare the debt payments
planned for the last year with the amount actually paid. The measures listed
below provide a number of different perspectives on the repayment performance
of the business. However, the critical question to many farmers and lenders
is whether planned payments can be made in 1992. The cash flow projection
worksheet on the next page can be used to estimate repayment ability, which
can then be compared to planned 1992 debt payments shown below.
FARM DEBT PAYMENTS PLANNED
Same 40 Western Plain Region Dairy Farms, 1990 & 1991
Debt Payments
Long-term
Intermediate-term
Short-term
Operating (net
reduction)
Accounts payable
(net reduction)
Total
Per cow
Per cwt. 1991 milk
Percent of total
1991 receipts
Percent of 1991
milk receipts
Average
1991 Payments
Planned
Made
Planned
1992
$35,207
54,115
9,311
$38,057
86,987
6,113
$32,792
61,283
7,965
26,146
8,955
2,055
3,286
$128,065
0
$140,112
3,858
$107,953
$557
$2.97
$609
$3.25
19%
21%
23%
25%
My Farm
1991 Payments
Planned
Made
Planned
1992
$--- $--- $--­
$--- $--- $--­
$--­ $--­
$--- $--­
The cash flow coverage ratio measures the ability of the farm business
to meet its planned debt payment schedule. The ratio shows the percentage of
payments planned for 1991 (as of December 31, 1990) that could have been made
with the amount available for debt service in 1991. Farmers who did not
participate in DFBS in 1990 have their 1991 cash flow coverage ratio based on
planned debt payments for 1992.
CASH FLOW COVERAGE RATIO
Same 40 Western Plain Region Dairy Farms, 1990 & 1991
Item
Cash farm receipts
- Cash farm expenses
+ Interest paid
- Net personal withdrawals from farm**
(A)
(B)
Amount Available for Debt Service
Debt Payments Planned for 1991
(as of December 31, 1990)
(A + B) = Cash Flow Coverage Ratio for 1991
Average
$642,773
521,224
43,496
57,020
My Farm
$---­
•
$108,025
$---­
$128,065
.84
$---­
**Personal withdrawals and family expenditures less nonfarm income and
nonfarm money borrowed. If family withdrawals are excluded, or
inaccurately included, the cash flow coverage ratio will be incorrect.
12
ANNUAL CASH FLOW' W'ORKSHEET
Item
Average number of cows
Accrual Oper. Receipts
Milk
Dairy cattle
Dairy calves
Other livestock
Crops
Misc. receipts
Total
Regional
Average
(per cow)
233.9
$ 2,453.23
302.89
53.15
4.39
48.20
70.97
$ 2,932.83
Accrual Oper. Expenses
Hired labor
$ 425.03
Dairy grain & cone.
691.28
Dairy roughage
26.32
Nondairy feed
1.32
Mach. hire/rent/lease
29.11
Mach. rpr./parts & auto
124.52
Fuel, oil & grease
58.39
Replacement lvstk.
30.02
Breeding
28.27
Vet & medicine
79.03
Milk marketing
87.65
Cattle lease
.82
Other livestock expo
132.75
Fertilizer & lime
74.06
Seeds & plants
40.92
Spray/other crop expo
44.53
Land, bldg. ,fence repair
31.86
Taxes
48.84
Real estate rent/lease
64.15
Insurance
33.75
Utilities
56.88
Miscellaneous
41.14
Total Less Int. Paid
$ 2,150.64
My Farm
Total
Per Cow
Expected
1992
Change Projection
$
__
$---­
$----­
$
_
$--­
$----­
$
$---­
$
Net Accrual Operating Income
(total)
(without interest paid)
$182,958
Change in lvstk./crop inv.*
30,235
Change in accts. rec.
3,957
+ Change in feed/supply inv.**
8,421
+ Change in accts. payable***
6,259
NET CASH FLOW
$163,446
- Net personal withdrawals from
farm (see footnote on pg. 12) 54,483
Available for Farm Debt
Payments & Investments
$108,963
- Farm debt payments
153,044
Available for Farm Investment
$-44,081
- Capital purchases: cattle,
machinery & improvements
$139,118
Additional Capital Needed
---
$---­
$
_
$---­
$- - - -
$----­
$
$
$
$
$
.$
*Includes change in advance government receipts.
**Includes change in prepaid expenses.
***Excludes change in interest account payable.
13
Cropping Analysis
The cropping program is an important part of the dairy farm business
and often represents opportunities for improved management. A complete
evaluation of what the available land resources are, how they are being used,
how well crops are producing, and what it costs to produce them is important
to evaluating alternative cropping and feed purchasing alternatives.
LAND RESOURCES AND CROP PRODUCTION
48 Western Plain Region Dairy Farms, 1991
Item
My Farm
Avera&e
Land
Tillable
Nonti11able
Other nontillable
Total
Owned
345
33
107
-485
Crop Yields
Hay crop
Corn silage
Farms
48
47
Other forage
Total forage
Corn grain
Oats
Wheat
Other crops
Tillable pasture
Idle
Total Tillable Acres
10
48
34
13
15
14
14
32
48
Rented
266
5
19
290
Total
611
38
126
-775
Owned
Acres* Prod/Acre
2.67 tn DM
216
13.39 tn
210
4.75 tn DM
.98 tn DM
53
3.62 tn DM
432
118
106.99 bu
30
47.30 bu
54.48 bu
42
118
28
46
611
Acres
Rented
Total
Prod/Acre
tn DM
tn
tn DM
tn DM
tn DM
bu
--bu
bu
*This column represents the average acreage for the farms producing that
crop. Average acreages including those farms not producing were hay crop
216, corn silage 205, corn grain 83, oats 8, tillable pasture 8, and idle
30.
Average crop acres and yields compiled for the region are for the farms
reporting each crop. Yields of forage crops have been converted to tons of
dry matter using dry matter coefficients reported by the farmers. Grain
production has been converted to bushels of dry grain equivalent based on dry
matter information provided.
The following crop/dairy ratios indicate the relationship between
forage production, forage production resources, and the dairy herd.
CROP/DAIRY RATIOS
48 Western Plain Region Dairy Farms, 1991
•
Item
Total tillable acres per cow
Total forage acres per cow
Harvested forage dry matter, tons per cow
Avera&e
2.61
1. 85
6.69
My Farm
14
Cropping Analysis (continued)
A number of cooperators have allocated crop expenses among the hay
crop, corn, and other crops produced. Fertilizer and lime, seeds and plants,
and spray and other crop expenses have been computed per acre and per
production unit for hay and corn. Additional expense items such as fuels,
labor, and machinery repairs are not included.
CROP RELATED ACCRUAL EXPENSES
Western Plain Region Dairy Farms Reporting, 1991
Item
Number of farms
reporting
Average number
of acres
Fertilizer & lime
Seeds & plants
Spray & other crop
expense
Total
Total
Per
Till.
Acre
Hay Crop
Per
Per
Ton DM
Acre
48
All
Corn
Per
Acre
29
Corn
Silage
Per Ton
DM
Corn
Grain
Per Dry
Shell Bu.
29
610
$28.40
15.69
$23.08
10.69
$8.92
4.13
246
$31. 56
22.14
$6.81
4.78
$.30
.21
17.07
$61.16
9.31
$43.08
3.60
$16.65
27.28
$80.98
5.88
$17.47
.26
$.77
181
My Farm:
Fertilizer & lime $- - Seeds & plants
Spray & other crop
expense
Total
$--
$
$
$
$
$
$--
$
$- - ­
$
$
Most machinery costs are associated with crop production and should be
analyzed with the crop enterprise. Total machinery expenses include the
major fixed costs (interest and depreciation), as well as the accrual
operating costs. Although machinery costs have not been allocated to
individual crops, they are shown below per total tillable acre.
ACCRUAL MACHINERY EXPENSES
48 Western Plain Region Dairy Farms, 1991
Machinery
Expense Item
Average
Total
Per Til.
Acre
Expenses
Fuel, oil & grease
Machinery repairs & parts
Machine hire, rent & lease
Auto expense (farm share)
Interest (5%)
Depreciation
Total
$13,658
28,565
6,808
561
12,618
30,696
$92,906
$22.39
46.83
11.16
.92
20.69
50.32
$152.30
My Farm
Total
Per Til.
Expenses
Acre
$--­
$---­
•
"
$---­
$--­
15
Dairy Analysis
Analysis of the dairy enterprise can reveal a great deal about the
strengths and weaknesses of the dairy farm business. Information on this
page should be used in conjunction with DHI and other dairy production
information. Changes in dairy herd size and market values that occur during
the year are identified in the table below. The change in inventory value
without appreciation is attributed to physical changes in herd size and
quality. Any change in inventory is included as an accrual farm receipt when
calculating all of the profitability measures on pages 6 and 7.
DAIRY HERD INVENTORY
48 Western Plain Region Dairy Farms, 1991
Dairy Cows
Item
No.
Value
Bred
No. Value
Heifers
Open
No. Value
Calves
No. Value
Beg. year (owned)
+ Change w/o apprec.
+ Appreciation
228
$218,069
21,866
3,560
88
$60,105
4,860
488
49
$25,718
-659
391
53
$14,726
-61
211
End year (owned)
End incl. leased
Average number
249
250
234
$243,495
89
$65,453
49
$25,450
53
$14,876
193 (all age groups)
My Farm:
Beg. of year (owned)
+ Change w/o apprec.
+ Appreciation
End of year (owned)
End including leased
Average number
$
$
$
$
$
$
$
$
(all age groups)
Total milk sold and milk sold per cow are extremely valuable measures
of size and productivity, respectively, on the dairy farm. These measures of
milk output are based on pounds of milk marketed during the year. Farm
managers on DHI should compare milk sold per cow with their rolling herd
average on the test date nearest December 31 to see how close the DHI
estimate of milk produced is to actual milk sales.
HILK PRODUCTION
48 Western Plain Region Dairy Farms, 1991
Item
Total milk sold, lbs.
Milk sold per cow, lbs.
Average milk plant test, percent butterfat
Average
4,404,512
18,833
3.60
My Farm
•
.'
16
The cost of producing milk has been compiled using the whole farm method and
is featured in the following table. Accrual receipts from milk sales can be
compared with the accrual costs of producing milk per cow and per
hundredweight of milk. Using the whole farm method, operating costs of
producing milk are estimated by deducting nonmilk accrual receipts from total
accrual operating expenses including expansion livestock purchased. Total
costs of producing milk include the operating costs of producing milk plus
depreciation on machinery and buildings, the value of unpaid family labor,
the value of operators' labor and management, and the interest charge for
using equity capital. Total costs without operator's labor, management, and
capital are the operating costs plus depreciation and unpaid family labor.
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK
48 Western Plain Region Dairy Farms, 1991
Item
Accrual Costs of
Producing Milk
Operating costs
Total costs w/o
opers' labor,
mgmt. & capital
Total Costs
Accrual Receipts
From Milk
Total
Average
Per Cow
Per Cwt.
Total
My Farm
Per Cow
Per Cwt.
$460,242
$1,968
$10.45
$
$
$
$522,222
$610,432
$2,233
$2,610
$11.86
$13.86
$
$
$
$
$
$
$573,810
$2,453
$13.03
$
$
$
The accrual operating expenses most commonly associated with the dairy
enterprise are listed in the table below. Evaluating these costs per unit of
production enables an evaluation of the dairy enterprise.
DAIRY RELATED ACCRUAL EXPENSES
48 Western Plain Region Dairy Farms, 1991
Average
Item
Purchased dairy grain
& concentrates
Purchased dairy roughage
Total Purchased
Dairy Feed
Purchased grain & conc.
as % of milk receipts
Purchased feed & crop expo
Purchased feed & crop expo
as % of milk receipts
Breeding
Veterinary & medicine
Milk marketing
Cattle lease
Other livestock expense
My Farm
Per Cow
Per Cwt.
Per Cow
$691
26
$3.67
.14
$
$
$718
$3.81
$
$
$4.66
$
$.15
.42
.47
0.00
.70
$
28%
$877
%
36%
$28
79
88
1
133
Per Cwt.
$
%
$
III
17
Capital and Labor Efficiency Analysis
Capital efficiency factors measure how intensively the capital is being
used in the farm business. Measures of labor efficiency are key indicators
of management's success in generating products per unit of labor input.
Item
CAPITAL EFFICIENCY
48 Western Plain Region Dairy Farms, 1991
Per
Per
Per Tillable
Worker
Cow
Acre
Farm capital
Real estate
Machinery & equipment
Capital turnover, years
My Farm:
Farm capital
Real estate
Machinery & equipment
Capital turnover, years
$241,014
$2,366
$6,171
2,618
1,087
42,473
Per Tillable
Acre Owned
$4,184
1,775
417
2.02
$
$
$
$---­
LABOR FORCE INVENTORY AND ANALYSIS
48 Western Plain Region Dairy Farms, 1991
Labor Force
Operator number 1
Operator number 2
Operator number 3
Family paid
Family unpaid
Hired
Total
Months
11.83
5.25
2.81
4.60
1. 60
45.77
71.88
My Farm: Total
Operator's
Labor
Efficiency
Cows, average number
Milk sold, pounds
Tillable acres
Work units
Labor Costs
Value of operator(s)
labor ($l,300/mo.)
Family unpaid
($l,300/mo.)
Hired
Total Labor
Machinery Cost
Total Labor & Mach.
Total
234
4,404,512
610
2,401
Total
Value of
Labor & Mgmt.
Years
of Educ.
Age
46
40
33
14
14
$29,551
10,514
5,854
13
12
5.99 Worker Equivalent
1. 66 Operator/Manager Equiv.
12
12
______ Worker Equivalent
Operator/Manager Equiv.
Average
Per Worker
39
735,473
102
401
Average
Per
Per
Cow
Til. Acre
Total
Total
My Farm
Per Worker
My Farm
Per
Per
Cow
Til. Acre
•
$25,857
$111
$42.39
$
$
$
2,080
99,414
$127,351
$92,906
$220,257
9
425
$544
$397
$942
3.41
162.97
$208.77
$152.30
$361. 08
$
$
$
$
$
$
$
$
$
18
COMPARATIVE ANALYSIS OF THE FARM BUSINESS
Progress of the Farm Business
Comparing your business with average data from regional DFBS coopera­
tors that participated in both of the last two years is one part of a
business checkup. It is equally important for you to determine the progress
your business has made over the past two or three years and to set targets or
goals for the future.
PROGRESS OF THE FARM BUSINESS
Same 40 Western Plain Region Dairy Farms, 1990 & 1991
Selected Factors
Average of 40 Farms*
1990
1991
My Farm
1991
1990
Goal
Size of Business
Average number of cows
215
230
Average number of heifers
184
197
Milk sold, 1bs.
4,077 ,053 4,314,629
Worker equivalent
5.72
5.96
Total tillable acres
609
618
Rates of Production
Milk sold per cow, 1bs.
Hay DM per acre, tons
Corn silage per acre, tons
Labor Efficiency
Cows per worker
Milk sold/worker, 1bs.
18,928
3.13
14
18,737
2.75
14
38
712,871
39
723,834
Cost Control
Grain & cone. purchased
as % of milk sales
Dairy feed & crop expo
per cwt. milk
Labor & mach. costs/cow
$5.25
$1,024
$4.71
$958
$
$
$
$
$
$
Capital Efficiency**
Farm capital per cow
Mach. & equip. per cow
Capital turnover, years'
$5,932
$1,077
1.71
$6,170
$1,136
2.01
$
$
$
$
$
$
$110,003
$133,591
$56,621
$83,573
$
$
$
$
$
$
$37,420
$6,160
$
$
$
Profi tabili ty
Net farm inc. w/o apprec.
Net farm inc. w/apprec.
Labor & mgt. income
per oper./manager
Rate of return on eq.
capital w/apprec.
Rate of return on all
capital w/apprec.
Financial Summary
Farm net worth, end year
Debt to asset ratio
Farm debt per cow
28%
%
%
%
10%
4%
%
%
%
10%
6%
%
%
%
$865,519
.37
$2,273
*Farms participating both years.
28%
$882,678
.40
$2,339
$
$
$
$
$
$
**Average for the year.
i
•
19
Regional Farm Business Chart
The Farm Business Chart is a tool which can be used in analyzing your
business. Compare your business by drawing a line through or near the figure in
each column which represents your current level of performance. The five
figures in each column represent the average of each 20 percent or quinti1e of
farms included in the regional summary.
FARM BUSINESS CHART FOR FARM MANAGEMENT COOPERATORS
48 Western Plain Region Farms, 1991
-------------------------------------------------------------------------------Size of Business
Worker
No.
Pounds
Equivof
Milk
alent
Cows
Sold
Rates of Production
Tons Corn
Pounds
Tons
Milk Sold Hay Crop Silage
Per Cow
DM/Acre Per Acre
Labor Efficiency
Pounds
Cows
Per
Milk Sold
Worker
Per Worker
-------------------------------------------------------------------------------(10)*
13.5
6.5
4.4
2.9
1.9
595
246
144
92
62
(9)
(8)
(8)
(10)
21,731
20,133
18,878
17,940
15,796
4.0
3.0
2.3
2.0
1.4
15.2
14.2
13.3
12.0
10.1
49
40
36
30
25
(10)
(10)
11,296,975
4,426,119
2,828,028
1,754,753
1,123,622
(10)
918,308
774,545
685,648
593,932
440,287
Cost Control
% Grain is
of Milk
Receipts
Machinery
Costs
Per Cow
Labor &
Machinery
Costs Per Cow
Feed & Crop
Expenses
Per Cow
Feed & Crop
Expenses Per
Cwt. Milk
(9)
(9)
(10)
(10)
(9)
(9)
$400
547
631
719
917
16%
23
26
30
36
$251
378
425
483
685
717
855
949
1,077
1,308
$612
741
827
944
1,147
Grain
Bought
Per Cow
Value and Cost of Production
Milk
Oper. Cost
Total Cost
Receipts
Production
Milk
Per Cow
Per Cwt.
Per Cwt.
(9)
$2,784
2,586
2,450
2,328
2,025
(9)
$ 7.36
9.07
10.29
10.90
12.35
(9)
$12.01
13.35
14.00
14.76
16.74
$
Net Farm
Income
w/Apprec.
(3)
$227,289
102,445
53,968
27,701
-12,278
$3.29
3.95
4.47
5.00
5.87
Profitability
Net Farm
Labor &
Inc. w/o
Mgt. Inc.
Apprec.
Per Oper.
(3)
$171,310
76,922
31,564
14,904
-39,567
(3)
$65,892
13,460
4,487
-8,040
-81,626
Change in
Net Worth
w/Apprec.
(5)
$105,462
33,266
12,754
-9,070
-132,771
•
20
New York State Farm Business Chart
The Farm Business Chart is a tool which can be used in analyzing your
business. Compare your business by drawing a line through or near the figure in
each column which represents your current level of performance. The figure at
the top of each column is the average of the top 10 percent of the 395 farms for
that factor. The other figures in each column are the average for the second 10
percent, third 10 percent, etc. Each column of the chart is independent of the
others. The farms which are in the top 10 percent for one factor would not nec­
essarily be the same farms which make up the top 10 percent for any other
factor.
The cost control factors are ranked from low to high, but the lowest cost
is not necessarily the most profitable. In some cases, the "best" management
position is somewhere near the middle or average. Many things affect the level
of costs, and must be taken into account when analyzing the factors.
FARM BUSINESS CHART FOR FARM MANAGEMENT COOPERATORS
395 New York Dairy Farms, 1990
Size of Business
Worker
No.
Pounds
Equivof
Milk
alent
Cows
Sold
(10)*
(10)
(10)
8.7
349
6,643,712
4.7
157
2,871,316
3.9
118
2,089,248
3.3
98
1,691,784
3.0
81
1,417,006
Rates of Production
Pounds
Tons
Tons Corn
Milk Sold Hay Crop Silage
Per Cow
DM/Acre Per Acre
(9)
(8)
(8)
20
21,193
4.5
18
19,629
3.6
18,650
17
3.2
3.0
16
17,988
2.8
17,422
15
Labor Efficiency
Pounds
Cows
Milk Sold
Per
Worker
Per Worker
(10)
(10)
870,895
48
691,021
40
615,415
35
561,437
32
510,328
30
--------------------------------------------------------------------------------
2.6
2.3
2.1
1.8
1.3
Grain
Bought
Per Cow
(9)
366
$
476
542
611
667
70
60
53
46
35
1,151,117
968,206
837,604
693,783
507,451
% Grain is
of Milk
Receipts
(9)
15%
20
23
25
27
16,875
16,322
15,455
14,054
11,686
2.5
2.3
2.0
1.8
1.3
14
13
12
11
8
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$265
$ 692
351
823
390
901
945
429
466
999
28
26
24
22
17
Feed & Crop
Expenses
Per Cow
(9)
$ 517
645
721
781
833
463,936
429,166
387,958
339,968
240,302
Feed & Crop
Expenses Per
Cwt. Milk
(9)
$3.40
4.13
4.46
4.74
4.97
--------------------------------------------------------------------------------
719
770
827
899
1,058
29
31
32
35
40
496
530
575
638
807
1,058
1,109
1,173
1,273
1,474
891
949
1,014
1,099
1,279
*Page number of the participant's DFBS where the factor is located.
5.26
5.52
5.80
6.24
7.11
.
,
21
FARM BUSINESS CHART FOR FARM
MANAGEMENT COOPERATORS
395 New York Dairy Farms, 1990
Milk
Receipts
Per Cow
(9)
$3,201
2,966
2,806
2,669
2,589
2,496
2,390
2,262
2,064
1,721
Milk
Receipts
Per Cwt,
(9)
$16.32
15.63
15,27
14,98
14.83
Oper, Cost
Milk
Per Cow
(9)
$1,112
1,425
1,547
1,668
1,791
14.69
14,57
14,44
14,23
13,59
Oper, Cost
Milk
Per Cwt,
1,922
2,036
2,151
2,281
2,593
Total Cost
Production
Per Cow
Total Cost
Production
Per Cwt,
(9)
(9)
$ 7,19
8,96
9,65
10,15
10,68
$1,997
2,311
2,461
2,594
2,710
$12,78
14,06
14.77
15,32
15,80
11,20
11.69
12.29
13,14
14,90
2,802
2,921
3,041
3,196
3,651
16,29
16,99
17,69
19,04
22.69
(9)
Profitability
Net Farm Income
With
Without
Appreciation
Appreciation
(3)
(3)
$231,926
$190,057
91,230
81,401
66,354
56,580
50,670
44,618
42,626
34,580
33,267
25,805
19,089
11,588
-11,058
28,118
20,654
13,852
6,798
-9,971
Return to Operator's Labor,
Labor &
Management Income
Management, & Equity Capital
Without
Per
With
Per
Appreciation
Appreciation
Farm
Operator
(3)
(3)
(3)
(3)
$230,419
$188,587
$130,403
$96,579
89,849
79,191
47,621
31,927
29,650
21,508
61,893
52,316
47,120
40,525
20,689
15,542
14,330
10,878
38,335
31,926
29,721
21,927
14,945
6,513
-14,637
24,485
16,616
10,124
1,732
-14,241
7,592
1,361
-5,365
-15,640
-34,015
6,034
1,060
-4,331
-13,572
-30,508
Farm Business Charts for farms with freesta11 barns and 120 cows or less
and more than 120 cows, and farms with conventional barns with 60 cows or less
and more than 60 cows are shown on pages 25-28,
Financial Analysis Chart
The farm financial analysis chart on page 22 is designed just like the
Farm Business Chart and may be used to assess the financial health of the farm
business. Most of the financial measures used in the chart are defined on pages
6, 9, II, and 17 of this publication, References to DFBS output page numbers
for participating dairy farmers are provided in the table headings.
•
22
FINANCIAL ANALYSIS CHART
395 New York Dairy Farms, 1990
Debt
Payments
Per Cow
(7)*
$ 59
181
253
341
400
454
501
560
642
899
Leverage
Ratio**
Available for
Debt Service
Per Cow
(11)
$932
742
663
582
513
452
395
315
207
-196
Capital
Turnover
(years)
(10)
1. 38
1.68
1.84
2.03
2.18
2.34
2.50
2.70
3.08
4.27
Debt Payments
as Percent
of Milk Sales
(7)
(7)
5.22
2.11
1. 59
1. 30
1.15
1.01
0.85
0.69
0.43
-0.23
4%
8
11
14
16
18
20
22
25
37
Solvency
Debt/Asset Ratio
Percent
Current &
Long
Equity
Intermediate
Term
(5)
0.02
0.11
0.21
0.33
0.43
0.55
0.72
0.93
1.22
2.40
Liquidity (repayment)
Cash Flow
Coverage
Ratio
98
90
82
75
69
64
58
51
45
32
(5)
(5)
0.01
0.06
0.12
0.19
0.25
0.31
0.37
0.44
0.53
0.73
0.00
0.00
0.07
0.18
0.27
0.39
0.50
0.61
0.74
1.00
Efficiency (Capital)
Real Estate
Machinery
Investment
Investment
Per Cow
Per Cow
(10)
(10)
$1,390
$ 596
1,972
817
2,262
940
2,594
1,050
2,865
1,194
3,125
1,318
3,504
1,472
4,037
1,658
4,705
1,946
6,762
2,646
Debt
Per Cow
(5)
$ 119
680
1,210
1,632
2,025
2,386
2,735
3,178
3,737
4,726
Profitability
Percent Rate of Return with
appreciation on:
Equity
Investment***
(3)
(3)
21%
11
8
16%
10
8
5
3
6
5
1
4
-1
-3
3
1
-7
-2
-23
-7
Total Farm
Assets
Per Cow
(10)
$ 4,264
5,087
5,667
6,103
6,482
6,869
7,340
7,990
8,937
11,419
Change in
Net Worth
w/Appreciation
(5)
$110,353
53,680
33,094
22,571
15,798
10,557
3,939
-3,080
-11,458
-47,167
*Page number of the participant's DFBS where the factor is located.
**Do11ars of debt per dollar of equity, computed by dividing total liabilities
by total equity.
***Return on all farm capital (no deduction for interest paid) divided by total
farm assets.
23
Comparisons by Type of Barn and Herd Size
When analyzing a dairy farm business by comparing it to a group of farms,
it is important that the group of farms used has as many of the same physical
characteristics as possible as the farm being analyzed. To assist in this
endeavor, dairy farms in the 1990 State Summary* have been divided into those
with freesta11 and those with conventional housing. Within each group is a
further classification by size of the dairy herd.
The table on page 24 shows the average values for the resulting four
groups of dairy farms. Within each housing type, the larger herd size has the
highest crop yields and pounds of milk sold per cow. The total cost of
producing milk was lower on the larger farms and labor efficiency greater.
Profitability was also greater on the larger farms within each housing type.
Farm business charts have been computed for each of the four housing and
herd size categories. References to DFBS output page numbers for participating
dairy farmers are provided in the table headings. From these charts on pages
25-28, the range in size of business, rates of production, labor efficiency,
value and cost of producing milk, and profitability can be observed. The range
in every category of business performance is tremendous.
By comparing the farm's performance on the most appropriate business
chart, a farm manager will be better able to evaluate his or her business
performance. Farm managers should remember, however, that their competition is
not limited to the other farms in their own barn type and herd size category.
They should observe how their management performance compares with farms in
other categories as well.
Herd Size Comparisons
A detailed comparison of profitability, financial situation, and business
analysis factors across herd sizes is contained on pages 36-43 of the 1990 State
Summary*. As herd size increases, the average profitability also increases
(pages 36-37). Net farm income without appreciation was $227,064 per farm for
the 300 or more herd size group and $10,520 per farm for those with less than 40
cows. This relationship generally holds for all measures of profitability
including rate of return on capital.
Farm net worth increases rapidly as herd size increases (pages 38-41), but
percent equity and debt/asset ratios do not show a significant variation between
size groups. Debt payments per cow were lowest for the moderate size herd
groups and they demonstrated a strong ability to make debt payments.
Crop yields generally increased as herd size increased, but fertilizer and
lime expenses, and machinery cost per tillable acre also increased (pages 42­
43). Milk sold per cow increased as herd size increased, ranging from 15,372
pounds on the farms with less than 40 cows to 19,199 pounds on farms with 300 or
more cows. Farm capital per worker generally increased, and farm capital per
cow decreased as herd size increased. Milk sold per worker increased
dramatically as herd size increased, ranging from 304,000 pounds at the lowest
herd size category up to 872,000 pounds at the largest size cateogry.
*Smith, Stuart F., Wayne A. Knoblauch, and Linda D. Putnam, Dairy Farm
Management Business Summary, New York, 1990, Department of Agricultural
Economics, Cornell University. A.E. Res. 91-5, August 1991.
•
24
SELECTED BUSINESS FACTORS BY TYPE OF BARN
AND HERD SIZE
364 New York Dairy Farms, 1990
Farms with:
Item
Number of farms
Cropping Program Analysis
Total Tillable acres
Tillable acres rented*
Hay crop acres*
Corn silage acres*
Hay crop, tons DM/acre
Corn silage, tons/acre
Oats, bushels/acre
Forage DM per cow, tons
Tillable acres/cow
Fert. & lime exp./til. acre
Total machinery costs
Machinery cost/tillable acre
Conventional
$60 Cows
>60 Cows
127
97
60
80
162
50
105
28
2.3
13.2
55.8
7.9
3.5
$19.38
$22,362
$138
287
105
168
57
2.6
14.2
58.1
8.2
3.3
$27.87
$42,595
$148
287
115
156
65
2.5
15.3
61.4
8.6
3.4
$25.81
$44,486
$155
647
249
258
213
2.9
14.5
57.2
7.3
2.7
$33.56
$113,711
$176
87
73
1,461,585
16,860
$11.12
$16.12
$14.90
$719
$4.27
28%
$5.22
85
69
1,451,384
17,015
$11.04
$16.13
$14.95
$695
$4.09
26%
$5.08
243
196
4,558,311
18,739
$11.22
$14.56
$15.00
$813
$4.34
28%
$5.28
$172,643
$7,444
$3,090
$3,790
$1,444
2.58
$199,664
$6,914
$3,294
$3,195
$1,346
2.33
$204,685
$6,834
$3,389
$3,016
$1,463
2.29
$234,105
$6,066
$3,706
$2,660
$1,053
1. 81
2.00
1.21
370,048
23
248
$589
$169
3.00
1. 38
486,820
29
309
$512
$155
2.85
1. 37
509,605
30
321
$510
$152
6.30
1.63
723,398
39
400
$550
$207
$35,416
$8,017
$2,093
70%
$35,472
$8,594
$2,194
68%
$115,054
$39,642
$2,231
64%
Dairy Analysis
Number of cows
47
Number of heifers
37
Milk sold, lbs.
741,903
Milk sold/cow, lbs.
15,959
Operating cost of prod. milk/cwt.
$10.62
Total cost of prod. milk/cwt.
$17.45
Price/cwt. milk sold
$14.70
Purchased dairy feed/cow
$693
Purchased dairy feed/cwt. milk
$4.34
Pure. grain & cone. as % milk rec.
28%
Pure. feed & crop exp./cwt. milk
$5.13
Capital Efficiency
Farm capital/worker
Farm capital/cow
Farm capital/til. acre owned
Real estate/cow
Machinery investment/cow
Capital turnover, years
Labor Efficiency
Worker equivalent
Operator/manager equivalent
Milk sold/worker, lbs.
Cows/worker
Work units/worker
Labor cost/cow
Labor cost/tillable acre
Freestall
<120 Cows
>120 Cows
Profitability & Balance Sheet Analysis
Net farm income (w/o apprec.)
$18,620
Labor & mgmt. income/operator
$2,279
Farm debt/cow
$2,426
Percent equity
67%
*Average of all farms, not only those reporting data.
25
FARM BUSINESS CHART FOR SHALL CONVENTIONAL STALL DAIRY FARMS
127 Conventional Stall Dairy Farms with 60 or Less Cows, New York, 1990
Size of Business
Worker
No.
Pounds
Milk
Equivof
Cows
Sold
alent
(10)
(10)
(10)*
Rates of Production
Pounds
Tons
Tons Corn
Milk Sold Hay Crop Silage
DM/Acre Per Acre
Per Cow
(8)
(9)
(8)
Labor Efficiency
Cows
Pounds
Milk Sold
Per
Worker
Per Worker
(10)
(10)
3.2
2.6
2.4
2.1
2.0
59
57
54
51
49
1,063,570
956,623
886,369
821,538
757,836
19,694
18,135
17,515
17,016
16,617
3.9
3.2
3.0
2.7
2.5
20
17
16
15
13
38
30
28
26
25
601,872
514,801
465,011
431,581
394,554
1.9
1.7
1.5
1.3
1.1
45
42
40
36
28
707,062
658,951
608,772
536,080
367,339
16,066
15,340
14,202
13,081
10,584
2.3
2.0
1.8
1.6
1.0
12
12
10
10
7
23
22
20
18
14
368,897
341,474
298,433
260,744
196,088
Grain
Bought
Per Cow
(9)
$ 360
476
527
577
632
698
737
781
827
1,007
% Grain is
of Milk
Receipts
(9)
16%
22
24
26
28
29
31
33
37
41
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$221
$ 683
829
317
359
917
391
962
455
1,022
490
516
556
619
848
Value and Cost of Production
Milk
Dper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
Per Cwt.
Per Cwt.
(9)
(9)
(9)
$2,982
$13.63
$ 6.69
2,729
8.42
14.78
2,604
9.10
15.38
2,490
9.60
16.04
2,408
10.10
16.81
Feed & Crop
Expenses
Per Cow
(9)
$ 475
608
684
722
762
1,077
1,138
1,219
1,320
1,596
Feed & Crop
Expenses Per
Cwt. Milk
(9)
$3.42
4.11
4.45
4.71
4.92
817
873
934
1,013
1,247
Profitability
Net Farm Income
Labor &.
With
Without
Mgmt. Inc.
Apprec.
Apprec.
Per Dper.
(3)
(3)
(3)
$25,562
$48,969
$72,739
44,695
35,933
17,760
36,555
29,744
13,303
29,556
25,100
8,783
19,976
4,369
25,909
5.17
5.38
5.72
6.19
7.23
Change in
Net Worth
w/Apprec.
(5)
$42,873
22,785
16,110
12,312
6,962
------------------------------- .. -----------------------------------------------­
2,337
2,224
2,073
1,877
1,522
10.77
11.45
11.98
12.74
15.51
17.50
18.18
19.28
20.39
26.07
21,881
17,294
12,480
5,188
-14,724
15,365
10,762
6,635
2,872
-12,754
339
-2,731
-7,250
-16,427
-32,617
*Page number of the participant's DFBS where the factor is located.
3,309
247
-4,426
-11 ,086
-36,059
•
26
FARM BUSINESS CHART FOR LARGE CONVENTIONAL STALL DAIRY FARMS
97 Conventional Stall Dairy Farms with More Than 60 Cows, New York, 1990
Size of Business
Worker
No.
Pounds
Milk
Equivof
Cows
alent
Sold
(10)
(10)
(10)*
149
2,584,859
5.1
4.0
106
1,875,410
3.4
1,629,899
96
86
3.1
1,517,394
80
2.9
1,403,263
Rates of Production
Tons Corn
Pounds
Tons
Milk Sold Hay Crop Silage
Per Cow
DM/Acre Per Acre
(9)
(8)
(8)
20
20,718
4.3
18
19,377
3.5
18,581
17
3.1
18,068
2.9
16
17,315
2.6
15
Labor Efficiency
Pounds
Cows
Milk Sold
Per
Worker
Per Worker
(10)
(10)
44
760,541
637,992
37
576,615
33
541,546
31
486,292
30
_.-----------------------------------------------------------------------------­
2.6
2.5
2.4
2.1
1.7
76
71
68
66
63
Grain
Bought
Per Cow
(9)
$ 373
442
506
579
649
700
774
842
919
1,086
1,328,227
1,219,172
1,101,764
988,499
819,905
% Grain is
of Milk
Receipts
(9)
16%
19
23
24
26
28
31
33
35
40
16,794
16,108
14,940
13,591
11,401
2.4
2.2
2.1
1.8
1.5
14
12
12
11
8
Cost Control
Labor &
Machinery
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$298
$ 720
812
368
864
393
421
913
456
954
485
531
585
640
742
Value and Cost of Production
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
Per Cwt.
Per Cwt.
(9)
(9)
(9)
$3,162
2,902
2,744
2,651
2,576
$ 7.30
9.22
9.91
10.20
10.59
$13.04
14.11
14.94
15.55
15.93
456,646
426,507
404,925
375,631
297,511
28
26
25
23
19
Feed & Crop
Expenses
Per Cow
(9)
$ 493
598
695
759
826
994
1,079
1,137
1,216
1,362
Feed & Crop
Expenses Per
Cwt. Milk
(9)
$3.38
4.08
4.39
4.69
4.89
886
936
1,011
1,087
1,279
Profitability
Net Farm Income
Labor &.
With
Without
Mgmt. Inc.
Apprec.
Apprec.
Per Oper.
(3)
(3)
(3)
$106,960
$91,167
$46,704
72,165
61,082
27,104
54,447
49,457
19,419
48,672
43,537
13,118
43,293
34,340
9,424
5.24
5.43
5.72
6.14
7.14
Change in
Net Worth
w/Apprec.
(5)
$77,975
39,645
29,725
23,556
17,338
-------------------------------------------------------------------------------2,478
2,362
2,205
2,025
1,730
11.13
11.69
12.34
13.24
14.19
16.38
16.82
17.30
18.04
20.13
36,204
25,594
18,611
12,273
-4,728
27,752
21,420
14,713
9,758
-5,646
4,553
380
-5,082
-13,809
-23,429
*Page number of the participant's DFBS where the factor is located.
12,420
5,334
-2,665
-11,179
-47,564
.
27
FARK BUSINESS CHART FOR SMALL FREESTALL DAIRY FARKS
60 Freesta11 Barn Dairy Farms with 120 or Less Cows, New York, 1990
Size of Business
Worker
Pounds
No.
of
EquivMilk
alent
Cows
Sold
(10)
(10)
(10)*
4.3
116
2,158,034
109
1,944,413
3.8
3.5
103
1,846,013
3.1
97
1,696,622
90
2.9
1,536,651
2.7
2.5
2.2
1.9
1.4
80
77
67
56
46
1,343,093
1,213,815
1,049,918
881,600
632,120
Rates of Production
Pounds
Tons
Tons Corn
Milk Sold Hay Crop Silage
Per Cow
OM/Acre Per Acre
(9)
(8)
(8)
20,788
4.6
21
19,249
19
3.6
18,571
3.3
17
17,923
16
3.0
17,237
15
2.8
16,615
16,147
15,476
13,672
12,126
2.5
2.1
1.9
1.6
1.0
15
14
14
13
9
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Per Worker
Worker
(10)
(10)
48
828,578
40
676,371
605,256
36
578,887
33
547,092
31
29
27
25
23
18
501,972
456,111
410,748
354,502
.253,915
Cost Control
Grain
% Grain is
Feed & Crop
Feed & Crop
Machinery
Labor &
Bought
of Milk
Costs
Machinery
Expenses
Expenses Per
Receipts
Per Cow
Per Cow
Costs Per Cow
Per Cow
Cwt. Milk
(9)
(9)
(9)
(9)
(10)
(10)
11%
$3.01
$ 286
$270
$ 653
$ 512
426
18
331
802
620
3.77
520
4.40
21
393
885
665
606
25
440
933
767
4.76
666
464
838
970
27
5.12
--_ ... _--------------------- .. _-------------- .. -----_ ..... _---------------------------­
704
28
496
1,046
5.52
921
764
31
1,092
969
5.65
567
840
1,041
33
614
1,153
5.85
906
34
686
1,091
1,267
6.34
1,006
39
1,481
1,219
7.12
877
Value and Cost of Production
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
Per Cwt.
Per Cwt.
(9)
(9)
(9)
$1,854
$ 7.95
$12.98
2,012
9.22
14.11
2,295
9.65
14.91
2,435
10.09
15.41
2,509
10.72
15.85
Profitability
Net Farm Income
Labor &.
With
Without
Mgmt. Inc.
Apprec.
Apprec.
Per Oper.
(3)
(3)
(3)
$101,819
$96,206
$44,877
79,708
70,840
27,364
69,020
56,741
19,085
13,408
59,252
48,026
10,018
41,880
36,075
Change in
Net Worth
w/Apprec.
(5)
$75,638
48,824
33,368
23,325
15,763
-------------------------------------------------------------------------------2,588
2,667
2,759
2,898
3,100
11.21
11.78
12.71
13.84
15.22
16.19
16.95
17.81
19.65
22.15
31,702
23,015
16,564
5,105
-18,572
27,444
15,348
10,333
-2,985
-12,043
6,031
433
-9,174
-18,460
-26,264
*Page number of the participant's DFBS where the factor is located.
10,534
1,011
-7,476
-19,705
-77 ,443
•
~
28
FARM BUSINESS CHART FOR LARGE FREESTALL DAIRY FARMS
80 Freesta11 Barn Dairy Farms with More Than 120 Cows, New York, 1990
Size of Business
Worker
No.
Pounds
Equiv­
of
Milk
alent
Cows
Sold
(10)*
(10)
(10)
14.7
665 12,936,108
7.9
6,399,112
338
7.0
257
4,683,440
6.0
205
3,760,735
5.5
181
3,413 ,110
5.1
4.5
4.0
3.8
3.1
Grain
Bought
Per Cow
(9)
$ 416
550
632
689
738
783
826
857
926
1,078
169
156
142
130
122
3,070,859
2,884,946
2,714,383
2,432,639
1,908,456
% Grain is
of Milk
Receipts
(9)
15%
19
23
25
26
29
30
32
34
40
Rates of Production
Pounds
Tons
Tons Corn
Milk' Sold Hay Crop Silage
Per Cow
DM/Acre Per Acre
(9)
(8)
(8)
19
21,844
4.7
20,930
4.0
18
20,025
3.5
17
19,243
3.2
16
18,723
3.0
16
18,168
17,731
17,106
16,404
14,467
2.8
2.6
2.3
2.1
1.5
15
14
13
12
9
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$287
$ 670
839
368
405
919
441
975
480
1,025
506
535
555
609
748
Value and Cost of Production
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
Per Cwt.
Per Cwt.
(9)
(9)
(9)
$3,303
$ 6.85
$11.75
3,107
9.20
13.08
3,016
10.18
13.77
2,927
10.75
14.20
2,843
11.14
14.82
Labor Efficiency
Cows
Pounds
Milk Sold
Per
Worker
Per Worker
(10)
(10)
1,002,686
57
866,986
44
793,600
42
734,560
40
694,646
38
36
34
32
30
25
Feed & Crop
Expenses
Per Cow
(9)
$ 655
785
829
888
941
659,232
627,685
587,006
530,645
428,608
Feed & Crop
Expenses Per
Cwt. Milk
(9)
$3.48
4.17
4.50
4.84
5.10
979
1,019
1,085
1,160
1,293
1,054
1,089
1,162
1,217
1,354
Profitability
Net Farm Income
Labor &.
With
Without
Mgmt. Inc.
Apprec.
Apprec.
Per Dper.
(3)
(3)
(3)
$420,314 $341,186
$207,822
89,608
237,008
196,670
165,693
153,705
61,282
127,779
42,376
111,389
104,366
92,999
31,694
5.44
5.64
6.01
6.32
7.01
Change in
Net Worth
w/Apprec.
(5)
$187,516
102,826
80,200
65,041
46,573
-------------------------------------------------------------------------------2,713
2,644
2,548
2,443
2,169
11.44
11.90
12.42
13.04
14.07
15.22
15.61
15.94
16.51
17.72
85,705
71,032
50,070
35,473
-1,111
74,817
58,137
43,367
31,356
9,388
20,966
15,068
7,425
-5,216
-35,772
*Page number of the participant's DFBS where the factor is located.
35,148
21,132
1,876
-14,390
-58,492
,
29
IDENTIFY AND SET GOALS
If businesses are to be successful, they must have direction. Written
goals help provide businesses with an identifiable direction over both the long
and the short term. Goal setting is as important on a dairy farm as it is in
other businesses. Written goals are a tool which farm operators can use to
ensure that the business continues to move in the proper direction.
1.
Goals should be specific.
2.
Goals should be realistic and achievable.
3.
The achievement of the goal should be verifiable.
4.
You should designate a time when each goal will be achieved.
Goal setting on a dairy farm does not have to be a complex process. In
many cases it provides a process for writing down and agreeing on goals that you
have already given some thought to. It is also important to remember that once
you write out your goals they are not cast in concrete. If a change takes place
which has a major impact on the farm business, the goals should be reworked to
accommodate that change. Refer to your goals as often as necessary to keep the
farm business progressing.
It is important to identify both long and short range goals when looking
at the future of your farm business.
A suggested format for writing out your goals is as follows:
a.
Begin with a general philosophy statement which incorporates both
business and family goals.
b.
Identify 4-6 long range goals.
c.
Identify specific short range goals for a given time period (i.e.,
one year).
Worksheet for Setting Goals
I.
General Philosophy and Objectives
•
30
Worksheet for Setting Goals (continued)
II.
Long Range Goals (require two or more years to achieve)
III.
Short Range Goals (possible to achieve in one or two years)
What
How
When
NOTE: Once long and short range goals have been identified, it is helpful to
rank them in order of priority.
Prepared by T.R. Maloney, Extension Associate, Cornell University
Summarize Your Business Performance
The Farm Business and Financial Analysis Charts on pages 19-22 and 25-28
can be used to help identify strengths and weaknesses of your farm business.
Identify three major strengths and three areas of your farm business that need
improvement.
Strengths:
Need Improvement:
_
,
.
31
GLOSSARY AND LOCATION OF COHMON TERMS
Accounts Payable - Open accounts or bills owed to feed and supply firms, cattle
dealers, veterinarians and other providers of farm services and supplies.
Accounts Receivable - Outstanding receipts from items sold or sales proceeds not
yet received such as the payment for December milk sales received in
January.
Accrual Expenses - (defined on page 3)
Accrual Receipts - (defined on page 4)
Annual Cash Flow Statement - (defined on page 10)
Appreciation - (defined on page 5)
Balance Sheet - A "snapshot" of the business financial position at a given point
in time, usually December 31. The balance sheet equates the value of
assets to liabilities plus net worth.
Capital Efficiency - The amount of capital invested per production unit.
Relatively high investments per worker with low to moderate investments
per cow imply efficient use of capital.
Capital Turnover. Years - The number of years required for total farm income to
equal total farm assets, calculated by dividing average total farm assets
by total accrual operating receipts plus appreciation.
Cash From Nonfarm Capital Used in the Business - Transfers of money from nonfarm
savings or investments to the farm business where it is used to pay
operating expenses, make debt payments and/or capital purchases.
Cash Flow Coverage Ratio - (defined on page 11)
Cash Paid - (defined on page 2)
Cash Receipts - (defined on page 4)
Change in Accounts Payable - (defined on page 3)
Change in Accounts Receivable - (defined on page 4)
Change in Inventory - (defined on page 2)
Dairy (farm) - A farm business where dairy farming is the primary enterprise,
operating and managing this farm is a full-time occupation for one or more
people and cropland is owned.
Dairy Cash-Crop (farm) - Operating and managing this farm is the full-time
occupation of one or more people, cropland is owned but crop sales exceed
10 percent of accrual milk receipts.
Debt Per Cow - Total end-of-year debt divided by end-of-year number of cows.
Debt to Asset Ratios - (defined on page 9)
•
32
Dry Matter - The amount or proportion of dry material that remains after all
water is removed. Commonly used to measure dry matter percent and tons of
dry matter in feed.
Equity Capital - The farm operator/manager's owned capital or farm net worth.
Expansion Livestock - Purchased dairy cattle and other livestock that cause an
increase in herd size from the beginning to the end of the year.
Farm Debt Payments as Percent of Milk Sales - Amount of milk income committed to
debt repayment, calculated by dividing planned debt payments by total milk
receipts.
Farm Debt Payments Per Cow - Planned or scheduled debt payments per cow
represent the repayment plan scheduled at the beginning of the year
divided by the average number of cows for the year. This measure of
repayment ability is used in the Financial Analysis Chart.
Financial Lease - A long-term non-cancellable contract giving the lessee use of
an asset in exchange for a series of lease payments. The term of a
financial lease usually covers a major portion of the economic life of the
asset. The lease is a substitute for purchase. The lessor retains
ownership of the asset.
Income Statement - A complete and accurate account of farm business receipts and
expenses used to measure profitability over a period of time such as one
year or one month.
Labor and Management Income - (defined on page 6)
Labor and Management Income Per Operator - The return to the owner/manager's
labor and management per full-time operator.
Labor Efficiency - Production capacity and output per worker.
Liquidity - Ability of business to generate cash to make debt payments or to
convert assets to cash.
Net Farm Income - (defined on page 5)
Net Worth - The value of assets less liabilities equal net worth.
equity the owner has in owned assets.
It is the
Operating Costs of Producing Milk - (defined on page 16)
Opportunity Cost . The cost or charge made for using a resource based on its
value in its most likely alternative use. The opportunity cost of a
farmer's labor and management is the value he/she would receive if
employed in hisfher most qualified alternative position.
Other Livestock Expenses . All other dairy herd and livestock expenses not
included in more specific categories. Other livestock expenses include;
bedding, DHIC, milk house and parlor supplies, livestock board,
registration fees and transfers.
Part-Time Cash-Crop Dairy (farm) . Operating and managing this farm is not a
full-time occupation, crop sales exceed 10 percent of accrual milk
receipts and cropland is owned.
33
Part-Time Dairy (farm) - Dairy farming is the primary enterprise, cropland is
owned but operating and managing this farm is not a full-time occupation
for one or more people.
Personal Withdrawals and Family Expenditures Including Nonfarm Debt Payments ­
All the money removed from the farm business for personal or nonfarm use
including family living expenses, health and life insurance, income taxes,
nonfarm debt payments, and investments.
Profitability - The return or net income the owner/manager receives for using
one or more of his or her resources in the farm business. True "economic
profit" is what remains after deducting all costs including the
opportunity costs of the owner/manager's labor, management, and equity
capital.
Repayment Analysis - An evaluation of the business' ability to make planned debt
payments.
Replacement Livestock - Dairy cattle and other livestock purchased to replace
those that were culled or sold from the herd during the year.
Return on Equity Capital - (defined on page 7)
Return on Total Capital - (defined on page 7)
Return to Operators' Labor. Management. and Equity Capital - (defined on page 6)
Solvency - The extent or ability of assets to cover or pay liabilities.
Debt/asset and leverage ratios are common measures of solvency.
Total Costs of Producing Milk - (defined on page 16)
Whole Farm Method - A procedure
dairy farms without using
are assigned a cost equal
expenses to determine the
used to calculate costs of producing milk on
enterprise cost accounts. All non-milk receipts
to their sale value and deducted from total farm
costs of producing milk.
34
INDEX
Pagels)
Accounts Payable
.
3,8
4,8
Accounts Receivable
.
Accrual Expenses
.
3,5
4,5
Accrual Receipts
.
13
Acreage
.
Advanced Government
7,8
Receipts
.
17
Age
.
Amount Available
for Debt Service
.
11
Annual Cash Flow
10
Statement
.
Appreciation
, 5,9,15
Balance Sheet
.
8
Barn Type
.
2
2
Business Type
.
Capital Efficiency
.
17
Capital Turnover, Years
17
Cash From Nonfarm
Capital Used in
the Business
.
10
.
11
Cash Flow Coverage Ratio
2
Cash Paid .. '"
.
Cash Receipts
.
4,10
Change in Accounts
Payable
.
3
Change in Accounts
Receivable
4
2,3
Change in Inventory........
Change in Net Worth..... ...
9
Crop Expenses .. ,
'"
3,14
Crop/Dairy Ratios.
13
Dairy (farm)
2
Dairy Cash-Crop (farm)
2
Debt Per Cow.
9
Debt to Asset Ratios...
9
Depreciation
,
3,9
Dry Matter
13
Education
17
Equity Capital......
8
Expansion Livestock ..
3,10
Expenses
3
Farm Business Chart
19,20,
. ..
21,25,
...................... . 26,27,28
Farm Debt Payments
as Percent of
Milk Sales
.
11
Farm Debt Payments
Per Cow
.
11
Pagels)
Financial Analysis Chart
Financial Lease
.
Income Statement
.
Inflows
.
Labor and Management
Income
.
Labor and Management
Income Per Operator
.
Labor Efficiency
.
Land Resources
.
Liquidity
,
Lost Capital
.
Machinery Expenses
.
Milking Frequency
.
Milk Production
.
Milking System
.
Money Borrowed
.
Net Farm Income
.
Net Investment .,
.
Net Worth
,
.
Number of Cows
.
Operating Costs of
Producing Milk
.
Opportunity Cost
.
Other Livestock Expenses
.
Outflows
.
Part-Time Cash-Crop
Dairy (farm)
.
Part-Time Dairy (farm)
.
Personal Withdrawals and
Family Expenditures
Including Nonfarm
Debt Payments
.
Principal Payments
.
Profitability
.
Receipts
.
Record System
,
.
Repayment Analysis
.
Replacement Livestock
.
Return on Equity Capital
.
Return on Total Capital
Return to Operator's
Labor, Management,
and Equity Capital
.
Solvency
'" ..
Total Costs of
Producing Milk
.
Whole Farm Method
.
,
.
Worker Equivalent
Yields Per Acre
.
22
8
2
10
6
6
17
13
9
9
3,14
2
15
2
10
5
9
8
15
16
6
3
10
2
2
10
10
4
4
2
11
3
7
7
6
9
16
16
17
13
•
!
I
,
OTHER AGRICULTURAL ECONOMICS EXTENSION PUBLICATIONS
No. 91-31
Item Pricing in New York state:
A
Three Phase study Focusing on Price
Systems, Accuracy, Consumer
Perception and Related Costs to the
Food Industry
Gene A. German
Debra J. Perosio
No. 91-32
New York Economic Handbook 1992
Agricultural situation and Outlook
Extension staff
No. 91-33
1990 Northeast Beef Farm Business
Summary
Caro ine Nowak
Rasmussen
Danny G. Fox
Stuart F. Smith
Ted C. Perry
No. 91-34
Issues in the Development and
Marketing of Reduced Chemical
Agricultural Products: A Look at
Disease-Resistant Apple Cultivars
Cecile Murphy
Lois Schertz Willett
No. 92-01
Economics of Integrated Pest
Management Practices for Insects in
Grape Production
Darwin P. Snyder
Timothy H. Weigle
Gerald B. White
No. 92-02
Economics of Integrated Crop
Management for Field Crops, New
York state, 1991.
Darwin P. Snyder
J. Keith Waldron
Donald R. Specker
No. 92-03
Micro DFBS:
A Guide to Processing
Dairy Farm Business Summaries in
County and Regional Extension
Offices for Micro DFBS v 2.6
Linda D. Putnam
Wayne A. Knoblauch
Stuart F. smith
No. 92-04
Motivation:
Improving Business
Performance Through People
Thomas R. Maloney
Robert A. Milligan
Jonas B.
KaUffman, III
No. 92-05
The Changing Landscape of New York
Agriculture in the Twentieth
Century
B. F. Stanton