JUNE 1992
>
D:
c::e
:E:E
D::E
c::e~
LLcn
>cn
D:en
A.E. Ext. 92-12
WESTERN PLATEAU
REGION
1991
11: ....
_
1951
W
c::e Z
C
en
~
OJ
George L. Casler
Andrew N. Dufresne
Joan S. Petzen
Michael L. Stratton
Linda D. Putnam
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
•
f'''.
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 employment 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 PLATEAU REGION
Table of Contents
Page
INTRODUCTION
1
Program Objectives
1
Format Features
1
SUMMARY AND ANALYSIS OF THE FARM BUSINESS
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
Capital and Labor Efficiency Analysis
17
COMPARATIVE ANALYSIS OF THE FARM BUSINESS
18
Progress of the Farm Business..............
18
Regional Farm Business Chart
19
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 PLATEAU 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 Plateau 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.
*This summary was prepared by George L. Casler, Department of Agricultural
Economics, New York State College of Agriculture and Life Sciences,
Cornell University, in cooperation with Cooperative Extension Agents
Andrew Dufresne, Joan Petzen, and Michael Stratton. The Western Plateau
Region is comprised of Allegany, Cattaraugus, Chautauqua, and Steuben
Counties. Linda Putnam was in charge of the data handling at Cornell.
•
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
47 Western Plateau Region Dairy Farms, 1991
Type of Farm
Number
Dairy
46
Part-time dairy
o
Dairy cash-crop
1
Part-time cash-crop dairy
0
Type of Ownership
Owner
Renter
Number
Type of Business
Single proprietorship
Partnership
Corporation
Number
Business Record System
ELFAC II
Account Book
Agrifax (mail-in only)
On-Farm Computer
Other
Number
45
2
Type of Barn
Stanchion/Tie-Stall
Freestall
Combination
Number
Milking System
Bucket & carry
Dumping station
Pipeline
Herringbone parlor
Other parlor
Number
Milking Frequency
2x/day
3x/day
Other
Number
Production Records
DHIC
Owner-Sampler
Other
None
Number
32
27
14
6
o
4
26
13
4
27
17
3
45
2
o
5
19
10
9
4
6
4
5
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 nQt necessarily
represent the cost of goods and services actually used in 1991.
~
'I
~
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 ACC~UAL FARM EXPENSES
47 Western Plateau Region Dairy Farms, 1991
Change in
Change in
Inventory
Cash
or Prepaid
Accounts
Paid +
Expense* +
Payable
$20,742
$0 «
$-44
Expense Item
Hired Labor
Feed
Dairy grain & conc.
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
Landjbldg./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
52,066
3,096
341
1,537
12,036
1,324
5,081
985
2,290
3,897
7,522
1,123
7,997
1,350
-583
-9
o
«
3,030
-27
o
-109
89
26
104
112
o
«
o
«
o
o
Accrual
Expenses
$20,698
56,446
2,486
332
1,626
11,953
1,324
5,297
985
2,605
3,900
7,522
1,123
7,950
299
-12
16
15
-56
9
4,558
2,447
1,990
732
324
121
-19
23
5,271
2,794
2,111
1,797
5,783
3,351
-57
-30
336
1,710
6,196
3,356
3,857
630
4,948
11,202
3,130
----$163,730
2,290
o
«
o
«
«
o«
77
o
«
o
«
o
«
o
«
30
$2,211
o
«
o
o
o
5
o
o
o
o
-129
$3,412
o
3,857
630
4,948
11,202
3,031
$169,353
2,290
11,491
4,812
$187,946
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
47 Western Plateau Region Dairy Farms, 1991
Change in
Cash
Change in
Accounts
Receipts + Inventory + Receivable
Milk sales
$172,552
Dairy cattle
14,538
$9,651
Dairy calves
3,853
Other livestock
580
625
1,332
Crops
-3,927
Government receipts
2,789
0*
Custom machine work
320
Gas tax refund
120
Other
1,395
Less nonfarm noncash cap. **
( -)
408
--:-::---::--=-=­
Total Receipts
$197,479
$5,941
$1,843
80
o
o
88
o
41
o
o
$2,052
Accrual
Receipts
$174,395
24,269
3,853
1,205
-2,507
2,789
361
120
1,395
(-)
408
$205,472
*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
profi tabili ty.
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
47 Western Plateau Region Dairy Farms, 1991
Item
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)
Average
My Farm
$205,472
1,515
2,507
6,444
-285
$215,653
- 187,946
$27,707
$17,526
$---­
$--­
$---­
$--­
The chart below shows the relationship between net farm income per cow
(with apprec·iation) and pounds of milk sold per cow. Generally, farms with a
higher production per cow have higher profitability per cow.
Net Far.-n Inco.-ne/CoW' and Milk/CoW'
47 W'estern Plateau Dairy Far.-ns, 1991
1500
•
•
1000
-a-
,!J
•11
......
~
-!!.
500
£
•
•
~
•
•
II
j
e.
0
--
•
-
• •
•
•
• • ••• •
•
•
•
•
• •
•
•
•
•
~
•
•
•
•
•
•
-500
•
-1000
8000
10000
12000
14000
16000
16000
Pounds Milk Per Co_
20000
22000
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
47 Western Plateau Region Dairy Farms, 1991
Average
Without
With
Apprec.
Apprec.
Item
Net farm income
Family labor unpaid
@ $1,300 per month
Return to operators' labor,
management, & equity
$27,707
$17,526
- 2,652
- 2,652
$25,055
$14,874
My Farm
With
Without
Apprec.
Apprec.
$---­
$--­
$---­
$--­
Labor and management 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 a~ove inflation that a farmer might expect to earn in
comparable risk investments.
LABOR AND MANAGEMENT INCOME
47 Western Plateau Region Dairy Farms, 1991
Item
Return to operators' labor, management,
& equity without appreciation
Real interest @ 5% on $351,326
average equity capital
Labor & Management Income
Labor & Management Income per
1.44 Operator/Manager
Average
My Farm
$14,874
$--­
- 17,566
$-2,692
$--­
$-1,869
$--­
"
7
Return on equity capital measures the net return remaining 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
47 Yestern Plateau 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
$ 25,055
31,438
$ -6,383
$ 11,202
$ 4,819
$-16,564
$ -5,362
-1. 82%
-4.71%
.98%
-1. 09%
My Farm
$--­
$--­
$--­
$---­
$--­
$--­
---_%
- - - -%
---_%
--_%
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
47 Western Plateau Region Dairy Farms, 1991
Farm Liabilities
Farm Assets
Jan. 1
Current
Farm cash, checking
& savings
$6,563
Accounts rec.
12,460
Prepaid expo
n
Feed & supplies
39,443
Total
$58,543
Intermediate
Dairy cows:
$79,709
owned
leased
458
Heifers
37,700
Bulls/other 1vstk.
845
Mach./eq. owned
105,667
Mach./eq. leased
1,279
Farm Credit stock
1,625
Other stock/cert.
3,479
Total
Long-Term
Landjbuildings:
owned
leased
Total
Total Farm
Assets
$230,762
Dec. 31
$5,221
14,511
o
33,381
$53,113
$86,385
o
42,145
1,514
107,171
1,005
1,793
3,330
& Net Worth
Jan. 1
Current
$6,647
Accounts payable
4,061
Operating debt
4,947
Short-term
Advanced govt. rec.
o
Dec. 31
Total
Intermediate
Structured debt
1-10 years
Financial lease
(cattle/mach. )
Farm Credit stock
$15,655
$19,364
$70,174
$69,153
1,737
1,625
1,005
1,793
Total
$73,536
$71,951
Long Term
Structured debt
>10 yrs
Financial lease
(structures)
$50,646
$53,051
240
42
$50,886
$53,093
$144,408
$354,574
---
$10,080
5,060
4,224
o
$243,343
$198,610
240
$202,484
42
$198,850
$488,155
$202,526
$498,982
Total
Total Farm Liab.
FARM NET WORTH
$140, on
$348,078
Nonfarm Assets, Liabilities & Net Worth (Average of 29 farms reporting)
Liabilities
Assets
Jan. 1
Dec. 31
& Net Worth
Jan. 1
Dec. 31
Personal cash, chkg.
& savings
$9,649
Cash value life ins.
4,621
Nonfarm real estate
8,517
Auto (personal sh.)
3,660
Stocks & bonds
5,152
Household furn.
7,741
3,612
All other
Total Nonfarm
$42,953
Nonfarm Liab.
$10,036
6,875
14,103
2,961
6,269
8,245
2,365
$50,854
NONFARM NET WORTH
Farm & Nonfarm Assets. Liabilities. & Net Worth*
$1,846
$1,569
$41,107
$49,285
Jan. 1
Dec. 31
$531,108
$549,836
Total Assets
Total Liabilities
141,923
145,977
TOTAL FARM & NONFARM NET WORTH
$389,185
$403,859
*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
47 Western Plateau 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. liab. as a % of total debt
Farm Debt Levels:
Total farm debt
Long- term debt
Intermediate & current debt
Per Cow
$1,679
617
1,062
My Farm
71%
.29
.26
.31
----_%
$-3,685
$6,496
Per Tillable
Acre Owned
$944
347
597
$---­
$--­
7%
37%
63%
---_%
----_%
---_%
Per Cow
Per Tillable
Acre Ownec!
$---
$---­
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
47 Western Plateau 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
$105,667
$198,610
+
$10,957
+
124
$7,549*
304
1,953
2,798
4,812
592
11,491
Net investment
Appreciation
+
Value end of year
$202,484
-1,710
5,584**
*$3,100 land and $4,449 buildings and/or depreciable improvements.
**Excludes $860 of appreciation on assets sold during the year.
•
- -1,002
+ 2,507
$107,171
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
47 Western Plateau Region Dairy Farms, 1991
Average
Item
My Farm
Cash Inflows
Beginning farm cash, checking & savings
Cash farm receipts
Sale of assets: Machinery
Real estate
$
6,563
$---­
197,479
592
2,959
Other stock & certificate
135
Money borrowed (intermediate & long-term)
23,613
Money borrowed (short-term)
659
Increase in operating debt
999
Nonfarm income
6,749
Cash from nonfarm capital used in the business
Money borrowed - nonfarm
1,550
146
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
$241,444
$---­
$163,730
2,290
10,957
7,549
271
22,229
1,382
$---­
Ending farm cash, checking & savings
Total
Imbalance (error)
o
•
27,436
5,221
$241,064
$380
$---­
$---­
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 34 Western Plateau 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
$6,690
19,647
3,903
$6,053
19,580
1,731
$6,290
18,712
998
637
0
1,290
118
$30,994
0
$27,364
1,253
$28,543
$387
$2.22
$342
$1.96
15%
14%
18%
16%
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 34 Western Plateau 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
$196,812
157,141
10,047
22,431
My Farm
$---­
•
$27,287
$---­
$30,994
.88
$---­
**Persona1 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 WORKSHEET
Item
Regional
Average
(per cow)
82.4
My Farm
Total
Per Cow
Expected
1992
Change Projection
Average number of cows
Accrual Oper. Receipts
Milk
Dairy cattle
Dairy calves
Other livestock
Crops
Misc. receipts
Total
$2,116.44
294.53
46.76
14.62
-30.42
56.61
$2,498.53
$
_
$-­
$---­
$
_
$--­
$---­
Accrual Oper. Expenses
Hired labor
Dairy grain & cone.
Dairy roughage
Nondairy feed
Mach. hire/rent/lease
Mach. rpr./parts & auto
Fuel, oil & grease
Replacement lvstk.
Breeding
Vet & medicine
Milk marketing
Cattle lease
Other livestock expo
Fertilizer & lime
Seeds & plants
Spray/other crop expo
Land, bldg. ,fence repair
Taxes
Real estate rent/lease
Insurance
Utilities
Miscellaneous
Total Less Int. Paid
$251.20
685.02
30.17
4.03
19.72
161.12
64.30
11.95
31.61
47.33
91.29
13.63
96.48
63.97
33.91
25.61
20.75
75.19
40.73
46.81
67.69
36.78
$1,919.29
$
$- - ­
$---­
Net Accrual Operating Income
(without interest paid)
Change in lvstk./crop inv.*
Change in accts. rec.
+ Change in feed/supply inv.**
+ Change in accts. payable***
NET CASH FLOW
- Net personal withdrawals from
farm (see footnote on pg. 12)
Available for Farm Debt
Payments & Investments
- Farm debt payments
Available for Farm Investment
- Capital purchases: cattle,
machinery & improvements
Additional Capital Needed
(total)
$47,729
5,941
2,052
2,211
3,412
$45,359
$---­
$- - - ­
$---­
$
$---­
_
20,541
$24,818
34,288
$-9,470
$
$
$
$
$
$
$21,067
*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
47 Western Plateau Region Dairy Farms, 1991
Item
Average
Land
Tillable
Nonti11ab1e
Other nonti11ab1e
Total
Owned
153
58
108
319
Crop Yields
Hay crop
Corn silage
Farms
47
43
Other forage
Total forage
Corn grain
Oats
Wheat
Other crops
Tillable pasture
Idle
Total Tillable Acres
8
47
18
11
0
3
19
25
47
Rented
104
18
10
132
My Farm
Total
257
76
118
451
Owned
Acres* Prod/Acre
1. 96 tn DM
147
62
11.87 tn
4.21 tn DM
20
1.10 tn DM
208
2.55 tn DM
110.00 bu
42
32
39.09 bu
0.00 bu
0
18
29
25
257
Rented
Acres
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
147, corn silage 57, corn grain 16, oats 8, tillable pasture 12, and idle
13.
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
47 Western Plateau Region Dairy Farms, 1991
...
Item
Total tillable acres per cow
Total forage acres per cow
Harvested forage dry matter, tons per cow
Average
3.12
2.51
6.44
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 Plateau Region Dairy Farms Reporting, 1991
Total
Per
Till.
Acre
Item
Number of farms
reporting
Average number
of acres
Fertilizer & lime
Seeds & plants
Spray & other crop
expense
Total
Hay Crop
Per
Per
Acre
Ton DM
47
Corn
Silage
Per Ton
DM
All
Corn
Per
Acre
23
Corn
Grain
Per Dry
Shell Bu.
23
257
$20.51
10.87
$17.25
7.06
146
$7.96
3.26
88
$41. 66
24.14
$9.05
5.24
$.37
.22
8.21
$39.59
3.07
$27.38
1.42
$12.64
24.96
$90.76
5.42
$19.71
.22
$.81
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
47 Western Plateau Region Dairy Farms, 1991
Machinery
Expense Item
Average
Total
Per Til.
Expenses
Acre
Fuel, oil & grease
Machinery repairs & parts
Machine hire, rent & lease
Auto expense (farm share)
Interest (5%)
Depreciation
Total
$5,298
11,952
1,626
1,324
5,321
11 ,491
$37,011
$20.61
46.51
6.32
5.15
20.70
44.71
$144.01
My Farm
Total
Per Til.
Acre
Expenses
$----
$---­
$----
$---­
•
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
47 Western Plateau Region Dairy Farms, 1991
Dairy Cows
Bred
No. Value
Heifers
Open
No. Value
Calves
No. Value
Item
No.
Value
Beg. year (owned)
+ Change w/o apprec.
+ Appreciation
End year (owned)
End incl. leased
Average number
80
$79,709
5,611
1,065
25
$19,804
2,069
278
24
$12,516
1,256
4
20
$5,379
716
122
84
86
82
$86,385
28
$22,151
26
$13,776
22
$6,217
72 (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.
MILK. PRODUCTION
47 Western Plateau Region Dairy Farms, 1991
Item
Total milk sold, lbs.
Milk sold per cow, lbs.
Average milk plant test, percent butterfat
Average
1,378,038
16,714
3.65
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 nonmi1k 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
47 Western Plateau Region Dairy Farms. 1991
Item
Accrual Costs of
Producing Milk
Operating costs
Total costs wlo
opers' labor,
mgmt. & capital
Total Costs
Accrual Receipts
From Milk
Total
Average
Per Cow
Per Cwt.
Total
My Farm
Per Cow
Per Cwt.
$140,566
$1,706
$10.20
$
$
$
$159,521
$208,525
$1,936
$2,531
$11.58
$15.13
$
$
$
$
$
$
$174,395
$2,116
$12.66
$
$
$
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
47 Western Plateau 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
$685
30
$4.10
.18
$
$
$715
$4.28
$
$
$5.01
$
$.19
. 28
.55
.08
.58
$
32%
$839
%
40%
$32
47
91
14
96
Per Cwt.
$
%
$
•
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
47 Western Plateau Region Dairy Farms, 1991
Per Tillable
Per
Per
Worker
Cow
Acre
Farm capital
Real estate
Machinery & equipment
Capital turnover, years
My Farm:
Farm capital
Real estate
Machinery & equipment
Capital turnover, years
$173,755
$5,990
2,436
1,305
37,866
$1,921
Per Tillable
Acre Owned
$3,226
1,312
419
2.29
$
$
$--­
$--­
LABOR FORCE INVENTORY AND ANALYSIS
47 Western Plateau Region Dairy Farms, 1991
Labor Force
Operator number 1
Operator number 2
Operator number 3
Family paid
Family unpaid
Hired
Total
Labor Costs
Value of operator(s)
labor ($1,300/mo.)
Family unpaid
($1,300/mo.)
Hired
Total Labor
Machinery Cost
Total Labor & Mach.
13
12
12
8.96
34.09
Total
82
1,378,038
257
878
Total
12
=
+ 12
+ 12
=
+
My Farm: Total
Operator's
Labor
Efficiency
Cows, average number
Milk sold, pounds
Tillable acres
Work units
Value of
Labor & Mgmt.
$21,849
7,561
2,028
Years
of Educ.
Age
47
56
45
Months
11.38
4.43
1.49
5.79
2.04
2.84 Worker Equivalent
1.44 Operator/Manager Equiv.
- - ­ Worker Equivalent
Operator/Manager Equiv.
Average
Per Worker
29
485,122
90
309
Average
Per
Per
Cow
Til. Acre
Total
Total
My Farm
Per Worker
My Farm
Per
Per
Cow
Til. Acre
$22,490
$273
$87.51
$
$
$
2,652
20,699
$45,841
$37,011
$82,852
32
251
$556
$449
$1,005
10.32
80.54
$178.37
$144.01
$322.38
$
$
$
$
$
$
$
$
$
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 34 Western Plateau Region Dairy Farms, 1990 & 1991
Selected Factors
Average of 34 Farms*
1990
1991
My Farm
1991
1990
Goal
Size of Business
Average number of cows
79
80
Average number of heifers
69
67
Milk sold, 1bs.
1,370,578 1,394,834
Yorker equivalent
2.68
2.72
Total tillable acres
230
228
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.
17,278
2.69
14
17 , 397
2.18
13
29
503,278
30
519,530
Cost Control
Grain & cone. purchased
as % of milk sales
Dairy feed & crop expo
per cwt. milk
Labor & mach. costs/cow
$5.27
$1,021
$4.92
$986
$
$
$
$
$
$
Capital Efficiency**
Farm capital per cow
Mach. & equip. per cow
Capital turnover, years
$5,785
$1,228
2.00
$5,941
$1,279
2.25
$
$
$
$.
$
$
$37,167
$40,353
$20,652
$30,795
$
$
$
$
$
$
$11,945
$678
$
$
$
Pro fi tab il i 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
30%
%
%
3%
0%
%
%
%
4%
2%
%
%
%
$345,839
.26
$1,514
*Farms participating both years.
32%
$358,279
.26
$1,478
$
$
$
$
$
$
**Average for the year.
•
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
47 Western Plateau Region Dairy Farms, 1991
Size of Business
Worker
No.
Pounds
of
Milk
Equiv­
alent
Cows
Sold
(10)*
(10)
4.4
3.4
2.7
2.0
1.4
152
91
69
51
40
Grain
Bought
Per Cow
(9)
$429
575
679
740
875
Rates of Production
Pounds
Tons
Tons Corn
Milk Sold Hay Crop Silage
Per Cow
DM/Acre Per Acre
(10)
2,535,568
1,585,093
1,196,640
824,311
596,957
% Grain is
of Milk
Receipts
(9)
(8)
(8)
19,627
18,390
17,064
15,258
12,634
3.4
2.3
2.0
1.6
1.0
18
16
13
$2,547
2,312
2,160
1,846
1,561
9
6
(9)
(10)
(10)
(9)
21%
28
32
35
45
$248
349
409
521
$684
843
990
1,156
1,492
$544
709
818
914
1,068
(9)
$7.09
8.84
10.01
10.90
13.17
(10)
(10)
42
33
28
25
17
680,556
575,398
476,875
394,337
273,844
Cost Control
Machinery
Labor &
Feed & Crop
Costs
Machinery
Expenses
Per Cow
Costs Per Cow
Per Cow
720
Value and Cost of Production
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
Per Cwt.
Per Cwt.
(9)
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Per Worker
Worker
(9)
$12.30
13.67
15.01
16.65
19.72
Net Farm
Income
w/Apprec.
(3)
$79,488
38,298
24,891
9,450
-20,527
Feed & Crop
Expenses Per
Cwt. Milk
(9)
$3.46
4.29
4.81
5.44
6.53
Profitability
Net Farm
Labor &
Inc. w/o
Mgt. Inc.
Apprec.
Per Oper.
(3)
$58,496
27,600
17,538
1,193
-22,870
(3)
$21,060
7,755
- 2,113
-14,540
-37,601
*Page number of the participant's DFBS where the factor is located.
Change in
Net Worth
w/Apprec.
(5)
$43,147
14,991
5,365
-5,231
-30,810
•
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
Rates of Production
Labor Efficiency
Size of Business
Worker
No.
Pounds
Pounds
Tons
Tons Corn
Cows
Pounds
Equivof
Milk
Milk Sold Hay Crop Silage
Per
Milk Sold
alent
Cows
Sold
Per Cow
OM/Acre Per Acre
Worker
Per Worker
(10)*
(10)
(10)
(9)
(8)
(8)
(10)
(10)
8.7
349
6,643,712
21,193
20
870,895
48
4.5
4.7
2,871,316
18
40
157
19,629
3.6
691,021
3.9
2,089,248
17
35
118
18,650
3.2
615,415
3.3
1,691,784
17,988
3.0
16
32
98
561,437
3.0
1,417,006
2.8
30
81
17,422
15
510,328
-------------------------------------------------------------------------------2.6
1,151,117
2.5
28
70
16,875
14
463,936
60
2.3
968,206
16,322
2.3
26
13
429,166
53
837,604
15,455
2.1
2.0
12
24
387,958
46
693,783
14,054
1.8
1.8
11
22
339,968
1.3
35
507,451
11,686
1.3
8
17
240,302
Grain
Bought
Per Cow
(9)
$ 366
476
542
611
667
_ ......
_.... -- --
719
770
827
899
1,058
Cost Control
% Grain is
Machinery
Labor &
Feed & Crop
Feed & Crop
Costs
of Milk
Machinery
Expenses
Expenses Per
Receipts
Per Cow
Costs Per Cow
Per Cow
Cwt. Milk
(10)
(10)
(9)
(9)
(9)
15%
$265
$3.40
$ 692
$ 517
6L~5
20
823
351
4.13
23
390
901
4.46
721
25
429
945
781
4.74
27
999
833
466
4.97
-_ .... ------_ .... --_ ...... - .. -----_ .. ----_ .... - .. ----_ .. --_ ...... -_ .. --_ .. --- .. -- -- ----­
1,058
29
496
891
5.26
31
530
1,109
949
5.52
32
575
1,173
1,014
5.80
638
35
1,273
1,099
6.24
40
807
1,474
1,279
7.11
*Pagc number of the participant's DFBS where the factor is located.
21
FARK BUSINESS CHART FOR FARK
MANAGEMENT COOPERATORS
395 New York Dairy Farms, 1990
Milk
Receipts
Per Cow
Milk
Receipts
Per Cwt.
Oper. Cost
Milk
Per Cow
Oper. Cost
Milk
Per Cwt.
Total Cost
Production
Per Cow
Total Cost
Production
Per Cwt.
(9)
(9)
(9)
(9)
$3,201
2,966
2,806
2,669
2,589
$16.32
15.63
15.27
14.98
14.83
$1,112
1,425
1,547
1,668
1,791
$ 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
2.496
2.390
2,262
2,064
1,721
14.69
14.57
14.44
14.23
13.59
1,922
2.036
2,151
2,281
2,593
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)
(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
Operator
Appreciation
Appreciation
Farm
(3)
(3)
(3)
(3)
$230,419
$188,587
$130,403
$96,579
89,849
79,191
47,621
31,927
52,316
29,650
21,508
61,893
15,542
47,120
40,525
20,689
38,335
31,926
14,330
10,878
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, 11, 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
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
4%
513
1.15
452
395
315
207
-196
1.01
0.85
0.69
0.43
-0.23
Solvency
Debt/Asset Ratio
Percent
Current &
Long
Intermediate
Term
EQuity
(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
940
2,262
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)
$
8
11
14
16
18
20
22
25
37
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
-7
3
1
-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
~nagement 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
Conventional
Freesta11
Farms with:
Item
s60 Cows
>60 Cows
<120 Cows
>120 Cows
Number of farms
127
97
60
80
Croppin& Program Analysis
Total Tillable acres
162
287
287
647
Tillable acres rented*
249
50
105
115
Hay crop acres*
105
168
156
258
Corn silage acres*
28
57
65
213
Hay crop, tons OM/acre
2.3
2.6
2.5
2.9
Corn silage, tons/acre
13.2
14.2
15.3
14.5
Oats, bushels/acre
55.8
58.1
61.4
57.2
Forage OM per cow, tons
7.9
8.2
8.6
7.3
Tillable acres/cow
3.5
3.3
3.4
2.7
Fert. & lime exp./ti1. acre
$19.38
$27.87
$25.81
$33.56
Total machinery costs
$22,362
$42,595
$44,486
$113,711
Machinery cost/tillable acre
$148
$138
$155
$176
Dairy Analysis
Number of cows
47
Number of heifers
37
Milk sold, 1bs.
741,903
Milk sold/cow, 1bs.
15,959
Operating cost of prod. mi1k/cwt.
$10.62
Total cost of prod. mi1k/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 capit.:>l/co..'
Farm capital/til. acre owned
Real estate/cow
Machinery investment/cow
Capital turnover, years
Labor Efficiency
Yorker equivalent
Operator/manager equivalent
Milk sold/worker, 1bs.
Cows/worker
York units/worker
Labor cost/cow
Labor cost/tillable acre
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%
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
6i%
*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
of
EquivMilk
alent
Cows
Sold
(10)
(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
Rates of Production
Tons Corn
Pounds
Tons
Milk Sold Hay Crop Silage
Per Cow
OM/Acre Per Acre
(8)
(8)
(9)
19,694
18,135
17,515
17,016
16,617
3.9
3.2
3.0
2.7
2.5
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Worker
Per Worker
(10)
(10)
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
Grain
Bought
Per Cow
(9)
360
$
476
527
577
632
698
737
781
827
1,007
45
42'
40
36
28
707,062
658,951
608,772
536,080
367,339
, Grain is
of Milk
Receipts
(9)
16%
22
24
26
28
29
31
33
37
41
16,066
15,340
14,202
13,081
10,584
2.3
2.0
1.8
1.6
1.0
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$221
$ 683
829
317
359
917
391
962
1,022
455
490
516
556
619
848
Value and Cost of Production
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
Per Cwt.
Per Cwt.
(9)
(9)
(9)
$2,982
$ 6.69
$13.63
2,729
8.42
14.78
2,604
9.10
15.38
2,490
9.60
16.04
2,408
10.10
16.81
23
22
20
18
14
12
12
10
10
7
Feed & Crop
Expenses
Per Cow
(9)
$ 475
608
684
722
762
368,897
341,474
298,433
260,744
196,088
Feed & Crop
Expenses Per
Cwt. Milk
(9)
$3.42
4.11
4.45
4.71
4.92
817
873
934
1,013
1,247
1,077
1,138
1,219
1,320
1,596
5.17
5.38
5.72
6.19
7.23
Profitability
Net Farm Income
Labor &.
With
Without
Mgmt. Inc.
Per Oper.
Apprec.
Apprec.
Change in
Net Worth
w/Apprec.
(3)
(3)
(3)
(5)
$72,739
44,695
36,555
29,556
25,909
$48,969
35,933
29,744
25,100
19,976
$25,562
17,760
13,303
8,783
4,369
$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
Equiv­
of
Milk
alent
Cows
Sold
(10)
(10)
(10)*
5.1
149
2,584,859
4.0
106
1,875,410
3.4
96
1,629,899
3.1
86
1,517,394
2.9
80
1,403,263
Grain
Bought
Per Cow
(9)
$ 373
442
506
579
649
700
774
842
919
1,086
76
71
68
66
63
(9)
20,718
19,377
18,581
18,068
17,315
(8)
(8)
4.3
3.5
3.1
2.9
2.6
20
18
17
16
15
Labor Efficiency
Pounds
Cows
Per
Milk Sold
Per Worker
Worker
(10)
(10)
760,541
44
637,992
37
576,615
33
541,546
31
486,292
30
.. ---------------------------­ -------------------------­
----~------------------_
2.6
2.5
2.4
2.1
1.7
Rates of Production
Tons Corn
Tons
Pounds
Milk Sold Hay Crop Silage
OM/Acre Per Acre
Per Cow
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
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$298
$ 720
368
812
393
864
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
$ 7.30
$13.04
2,902
9.22
14.11
2,744
9.91
14.94
2,651
10.20
15.55
2,576
10.59
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
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
994
1,079
1,137
1,216
1,362
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
19,419
54,447
49,457
13,118
48,672
43,537
9,424
43,293
34,340
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
FARM BUSINESS CHART FOR SHALL FREESTALL DAIRY FARMS
60 Freesta11 Barn Dairy Farms with 120 or Less Cows, New York, 1990
Size of Business
T,Jorker
No.
Pounds
Equiv­
of
Milk
alent
Cows
Sold
(10)
(10)
(10)*
116
2,158,034
4.3
109
1,944,413
3.8
103
1,846,013
3.5
3.1
97
1,696,622
2.9
90
1,536,651
2.7
2.5
2.2
1.9
1.4
80
77
67
56
46
Grain
Bought
Per Cow
(9)
$ 286
426
520
606
666
704
764
840
906
1,006
1,343,093
1,213,815
1,049,918
881,600
632,120
% Grain is
of Milk
Receipts
(9)
11%
18
21
25
27
28
31
33
34
39
Rates of Production
Tons
Tons Corn
Pounds
Milk Sold Hay Crop Silage
Per Cow
DM/Acre Per Acre
(9)
(8)
(8)
20,788
19,249
18,571
17,923
17,237
4.6
3.6
3.3
3.0
2.8
21
19
17
16
15
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
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$270
$ 653
331
802
393
885
440
933
464
970
496
567
614
686
877
Value and Cost of Production
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
Per Cwt.
Per Cwt.
(9)
(9)
$1,854
2,012
2,295
2,435
2,509
$ 7.95
9.22
9.65
10.09
10.72
(9)
$12.98
14.11
14.91
15.41
15.85
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Per T,Jorker
T,Jorker
(10)
(10)
828,578
48
676,371
40
605,256
36
33
578,887
547,092
31
501,972
456,111
410,748
354,502
253,915
29
27
25
23
18
Feed & Crop
Expenses
Per Cow
(9)
$ 512
620
665
767
838
1,046
1,092
1,153
1,267
1,481
Feed & Crop
Expenses Per
Cwt. Milk
(9)
$3.01
3.77
4.40
4.76
5.12
921
969
1,041
1,091
1,219
Profitability
Net Farm Income
Labor &.
T,Jith
T,Jithout
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
59,252
48,026
13,408
41,880
36,075
10,018
5.52
5.65
5.85
6.34
7.12
Change in
Net T,Jorth
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
Rates of Production
Labor Efficiency
Worker
Pounds
Pounds
Cows
Pounds
Tons
Tons Corn
No.
EquivPer
Milk Sold
of
Milk
Milk Sold Hay Crop Silage
Per Worker
alent
Cows
Per Cow
DM/Acre Per Acre
Worker
Sold
(10)*
(10)
(8)
(10)
(10)
(10)
(9)
(8)
1,002,686
14.7
665 12,936,108
19
57
21,844
4.7
7.9
866,986
6,399,112
18
44
338
20,930
4.0
7.0
4,683,440
793,600
257
20,025
3.5
42
17
16
734,560
40
6.0
205
3,760,735
19,243
3.2
5.5
181
3,413,110
16
38
694,646
18,723
3.0
---------.- .. -----------------------------------------------.------------------­
5.1
659,232
169
3,070,859
18,168
2.8
15
36
4.5
156
2,884,946
14
34
627,685
17,731
2.6
4.0
142
587,006
2,714,383
2.3
13
32
17,106
3.8
530,645
130
2,432,639
16,404
12
30
2.1
3.1
428,608
122
1,908,456
1.5
9
25
14,467
Grain
Bought
Per Cow
(9)
$ 416
550
632
689
738
783
826
857
926
1,078
% Grain is
of Milk
Receipts
(9)
15%
19
23
25
26
29
30
32
34
40
Cost Control
Labor &
Machinery
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$287
$ 670
368
839
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)
$3,303
3,107
3,016
2,927
2,843
(9)
$ 6.85
9.20
10.18
10.75
11.14
(9)
$11.75
13.08
13.77
14.20
14.82
Feed & Crop
Expenses
Per Cow
(9)
$ 655
785
829
888
941
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
Profi tabili ty
Net Farm Income
Labor &.
With
Without
Mgmt. Inc.
Apprec.
Apprec.
Per Oper.
(3)
(3)
(3)
$420,314 $341,186
$207,822
237,008
196,670
89,608
165,693
153,705
61,282
127,779
111,389
42,376
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)
\.1hat
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
Th~ Farm ~usiness 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 COY - Total end-of-year debt divided by end-of-year number of cows.
Debt to Asset Ratios - (defined on page 9)
­
32
Dry Hatter - 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 Efficien£y - 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 Vorth - 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
Pa&e(s)
Accounts Payable
.
3,8
Accounts Receivable .,
.
4,8
Accrual Expenses
.
3,5
Accrual Receipts
.
4,5
Acreage
.
13
Advanced Government
Receipts
.
7,8
Age
.
17
Amount Available
for Debt Service
.
11
Annual Cash Flow
Statement
.
10
Appreciation
. 5,9,15
Balance Sheet .. ,
.
8
Barn Type
.
2
BUSiness Type '"
.
2
Capital Efficiency
.
17
Capital Turnover, Years
17
Cash From Nonfarm
Capital Used in
the Business
.
10
Cash Flow Coverage Ratio .,.
11
Cash Paid
,
" .
2
Cash Receipts
.
4,10
Change in Accounts
Payable
.
3
Change in Accounts
Receivable..............
4
2,3
Change in Inventory.
Change in Net Worth...
9
'"
3,14
Crop Expenses
Crop/Dairy Ratios......
13
Dairy (farm)
,
2
2
Dairy Cash-Crop (farm)
Debt Per Cow.......
9
Debt to Asset Ratios.
9
Depreciation
3,9
Dry Matter
13
17
Education
8
Equity Capital.......
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
Pa&e(s)
Financial Analysis Chart
Financial Lease
.
.
Income Statement
Inflows
.
Labor and Management
Income
.
Labor and Management
Income Per Operator
.
Labor Efficiency
.
Land Resources
.
Liquidi ty
.
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
'"
Yorker 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
•
OTHER AGRICULTURAL ECONOMICS EXTENSION PUBLICATIONS
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
No. 92-06
Dairy Farm Business Summary
western Plain Region 1991
Stuart F. Smith
Linda D. Putnam
George Allhusen
Jason Karszes
David Thorp
No. 92-07
Dairy Farm Business Summary
Northern New York 1991
Stuart F. Smith
Linda D. Putnam
Patricia A. Beyer
J. Russell Coombe
Anita W. Deming
LouAnne F. King
George o. Yarnall
No. 92-08
Dairy Farm Business Summary
Oneida-Mohawk Region 1991
Eddy L. LaDue
Mark E. Anibal
Jacqueline M. Mierek
No. 92-09
Dairy Farm Business Summary
Central New York and Central Plain
Regions 1991
Wayne A. Knoblauch
Linda D. Putnam
George Allhusen
June C. Grabemeyer
James A. Hilson
No. 92-10
Employee Training Practices on
Large New York Dairy Farms
Thomas R. Maloney
No. 92-11
Dairy Farm Business Summary
Southeastern New York Region
1991
Stuart F. Smith
Linda D. Putnam
Alan S. White
Gerald J. Skoda
Stephen E. Hadcock
Larry R. Hulle
•