cent al plai regio 1985 - agecon...
TRANSCRIPT
July 1986 AE Ext 86~21
CENT AL PLAI REGIO 1985
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-Robert A Milliga n
linda D Putn am
Department of Agricultu ral Econo mics New York State College of Agriculture and life Sciences
A SIQI~Qry Colle 0 1 Ihe Sial Unie i Iy
Cornell University Ithaca New York 14853
1985 DAIRY FARM BUSINESS SUMMARY Central Plain Region
Introduction
Dairy farmers throughout the State have been participating in New York Cooperative Extensions farm business summary and analysis program since the early 1950s Each participating farmer receives a complete summary and analysis of his or her farm business in addition to this publication The information in this report is compiled by averaging data submitted from the region described at the bottom of this page
Program Objective
The primary objective of the dairy farm business summary DFBS is to provide farm managers information concerning profitability financial condishytion productivity and efficiency to be used to assist them in delineating the strengthsweaknesses of the farm business and to improve decision-making In short DFBS identifies the records farmers need and provides information to be used in making business and financial management decisions
Program Improvements
The 1985 DFBS report features improved accrual accounting procedures a new measure of farm profitability a more indepth balance sheet an annual cash flow statement and several major improvements in the business analysis format and the analysis measures used These and other changes are identified in the body of this report
The revised format provides one full page for the analysis of the farm cropping program and another for complete analysis of the dairy program Corn and hay crop related expenses are evaluated separately for cooperating farmers The cost of producing milk per cow and per hundredweight of milk sold has been compiled An annual cash flow worksheet has been added to the farmers individual report The popular Progress of The Farm Business report has been moved to page one of the farmers report and added to this pubHcation
Micro DFBS which allows Cooperative Extension agents and specialists to calculate and print individual farm business reports in their offices is now being used by more than 50 percent of our dairy farm management field staff This innovative program provides faster processing of farm record data and increased use of DFBS in farm management programs
This summary was prepared by Linda D Putnam and Robert A Milligan Department of Agricultural Economics New York State College of Agriculture and Life Sciences Cornell University in cooperation with Cooperative Extension Specialist Larry N Davis The Central Plain Region is comprised of Ontario Seneca Wayne and Yates counties
2
SUMMARY OF THE FARM BUSINESS
Business Characteristics
Finding the right management strategies is an important part of farming 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 farmers reporting these characteristics
BUSINESS CHARACTERISTICS 23 Central Plain Region Dairy Farms 1985
Type of Farm Number Type of Business Number Dairy 14 Single proprietorship 14 Part-time dairy 2 Partnership 9 Dairy cash-crop 5 Corporation o Part-time cash-crop dairy 2 Other o
Type of Ownership Number Type of Barn Number Owner 22 Stanchion 7 Renter 1 Freestall 13
Other 3
Milking System Number Business Record System Number Bucket amp carry o CAMIS 5 Dumping station 2 Account Book 8 Pipeline 8 Agrifax (mail-in only) 7 Herringbone parlor 12 On-Farm Computer I Other parlor 1 Other 2
Dairy Records Service Number Number DHIC 21 Other 1 OS 1 None o
Milk Diyersion Prosram Participants Number 4
The averages used in this report were compiled using data from all the participating dairy farms in this region unless noted otherwise There may be regular dairy farms part-time farms dairy cash-crop farms farm renters partnerships and corporations included in the average These specific classifications are used to separate farms in the State Business Summary
A part-time farm has less than 12 months of labor from all operators
A dairy cash-crop farm has income from crop sales that exceed 10 percent of milk sales
A farm renter owns no farm real estate at the end of the year or owns no tillable land
Milk Diversion Proampram Participants are the farmers that were in the 1984-85 federal milk diversion program These farms have also been included in the regional summary averages
3
Income Statement
The revised accrual income statement begins with an accounting of all farm business expenses
CASH AND ACCRUAL FARM EXPENSES 23 Central Plain Region Dairy Farms 1985
Cash Change in Change in Accrual EXBense Item faid + Inventoo + Acconta fapoundable Ji2Wenses
Hired Labor $ 26966 $ 29 $ 26995 Feed Dairy grain amp conc 29394 $-167 -142 29085 Dairy roughage 2583 0 -65 2518 Other livestock 2561 -27 6 2540 Machinerpound Mach hire rentlease 2958 -44 2914 Machinery repairsparts 11632 -83 522 12071 Auto expense (fs) 272 0 272 Fuel oil amp grease 9677 -80 10 9607 Livestock Replacement livestock 579 44 623 Breeding 2822 32 54 2908 Vet amp medicine 3778 -32 99 3845 Milk marketing 9582 0 9582 Cattle leaserent 187 0 187 Other livestock expense 7625 -85 117 7657 CroBs Fertilizer amp lime 12273 48 -620 11701 Seeds amp plants 5131 21 -58 5094 Spray other crop expo 5092 6 0 5098 Real Estate Landb1dgfence repair 2184 -208 1976 Taxes 5189 181 5370 Insurance 3543 29 3572 Rent amp lease 4292 373 4665 Other Telephone (fs) 945 0 945 Electricity (fs) 4735 20 4755 Interest paid 25805 363 26168 Miscellaneous 2438 -ill 2556 Total Operating $182243 $-370 $ 831 $182704 Expansion livestock $ 918 $ 0 $ 918 Machinery depreciation 20041 Building depreciation 7882
TOTAL ACCRUAL EXPENSES $211545
Cash Baid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual eXBenses are the costs of inputs actually used in this years production The value of feed and supplies used out of inventory are included as are the costs of inputs purchased but not paid for (net increases in accounts payable) Items paid for and not used (net additions to inventory) are excluded from accrual expenses as are payments made on inputs used in a prior year (net decreases in accounts payable)
4
Worksheets are provided to enable any dairy farmer to compute his or her accrual farm income and compare it with the averages on the opposite page
CASH AND ACCRUAL FARM EXPENSES WORKSHEET
Cash Change in Change in Accrual Expense Item Paid + Inventory + Accounts Payable Expenses
Hired Labor Feed Dairy grain amp cone Dairy roughage Other livestock Machinery Mach hire rentlease Machinery repairsparts Auto expense (fs) Fuel oil amp grease Livestock Replacement livestock Breeding Vet amp medicine Milk marketing Cattle leaserent Other livestock expense Crops Fertilizer amp lime Seeds amp plants Spray other crop expo Real Estate Landjbldgfence repair Taxes Insurance Rent amp lease Other Telephone (fs) Electricity (fs) Interest paid Miscellaneous Total Operating Expansion livestock Machinery depreciation Building depreciation
TOTAL ACCRUAL EXPENSES
$_-- $_-- $_-- $_--shy
$___ $_-- $_-- $_--shy
$ $ $ $
Cash paid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual expenses are the costs of inputs actually used in this years production Purchased feed and supplies used out of inventory must be included Beginning of year less end of year purchased feed and supply inventory equals the change in inventory to include in accrual expenses Feed supplies and services used but not paid for must be included by adding the net increase in operating accounts payable Increases in operating accounts payable are determined by subtracting the balance at the beginning of the year from the end of year balance
5
CASH AND ACCRUAL FARM RECEIPTS 23 Central Plain Region Dairy Farms 1985
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + InventoIY + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$177 112 11623
2073 3898
12481 6576
148 303
5234
$219448
$1216
-741 100
$ 575
$-423 550
0 0
298 -969
0 0
---22
$-322
$176689 13388
2073 3157
12879 5607
148 303
5456
$219700
Cash receipts includes the gross value of milk checks received during the year plus all other payments received for the sale of farm products services and government programs
Accrual receipts represent the value of all farm commodities produced and services actually provided by the farmer during the year Increases in liveshystock inventory caused by herd growth andor quality are included as accrual receipts Decreases in inventory caused by herd reduction are deducted Changes in inventories of crops grown are accounted for in accrual receipts Changes in accounts receivable include the January milk check for this Decemshybers marketings compared with the previous Januarys check and other delayed payments
CASH AND ACCRUAL FARM RECEIPT WORKSHEET
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + Inventory + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$_-- $_-shy
$_-- $_-shy
To calculate the change in inventory to be included in the above worksheet subtract the beginning of year values from the end of year values excluding appreciation Th~ changes in inventories caused by declining prices must be excluded from the calculation of accrual receipts Changes in accounts receivable are also determined by subtracting beginning of year balances from end of year balances
----_ _--shy
6
Profitability Analysis
Farm ownersoperators contribute labor management and capital to their businesses and the best combination of these resources produces optimum profits Farm profits 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
Net farm income is the total combined return to the farm operator(s) and other unpaid family members for their labor management and equity capital It is the farm familys net annual return from working managing financing and owning the farm business This is not a measure of cash available from the years business operation Cash flow is evaluated later in this report
Net farm income is computed with and without appreciation Appreciashytion represents the change in livestock machinery and real estate inventory values caused by changes in prices during the year Appreciation is a major factor contributing to changes in farm net worth and must be included in the profitability analysis
NET FARM INCOME 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Total accrual receipts Appreciation Livestock
Machinery Real Estate
Total Including Appreciation Total accrual expenses Net Farm Income (with appreciation) Net Farm Income (without appreciation)
$219700 -7658 5072
-114 $217000
211545 $ 5455 $ 8155
$_--shy
$_-shy
$_-shy$_-shy
Return to operators) labor management and equity capital measures the total business profits for the farm operators It is calculated by deducting a charge for unpaid family labor from net farm income Operator(s) labor is not included in unpaid family labor Return to operator(s) labor manageshyment and equity capital has been compiled with and without appreciation Appreciation is considered an important part of the return to ownership of farm assets
RETURN TO OPERATOR(S) LABOR MANAGEMENT AND EQUITY 23 Central Plain Region Dairy Farms 1985
Item
Av~uage Without With Wprec Wprec
My Farm Without With Wprec Apprec
Net farm income $8155 $5455 $_-shy $_-shyFamily labor unpaid
$550 per month 1100 1lQO Return to operator(s)
labor management amp equity $7055 $4355 $_-shy $_-shy
7
Labor and manaampement income is the share of net farm income without appreciashytion returned to the operator(s) labor and management Appreciation is not included as part of the return to labor and management Labor and management income is determined by deducting the cost of using equity capital at a real interest rate of five percent from the return to operator(s) labor manageshyment and equity capital excluding appreciation The interest charge reflects the long-term average rate of return that a farmer might expect to earn in comparable risk investments in a low inflation economy
Labor and manaampement income per operator measures the return to each operators labor and management
LABOR AND MANAGEMENT INCOME 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity without appreciation
Real interest 5 on $338140 equity capital
Labor amp Management Income (142 operators)
Labor amp Management Income per Operator
$ 7055 $_-shy
16907
$-9852
$-6954
$_-shy
$_--shy
Return on equity capital measures the net return remaining for the farmers equity or owned capital after a charge has been made for the owner-operators labor and management The earnings or amount of net farm income allocated to labor and management is the opportunity cost or value of operator(s) 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 end of year farm net worth or equity capital
RETURN ON EQUITY CAPITAL 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity capital with appreciation
Value of operator(s) labor amp management
Return on equity capital with appreciation
Rate of return on equity capital with appreciation
Return on equity capital without appreciation
Rate of return without appreciation
$ 4355
26118
$-21763
-64
$-19063
-56
$_--shy
$_-shy
$_-shy
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
1985 DAIRY FARM BUSINESS SUMMARY Central Plain Region
Introduction
Dairy farmers throughout the State have been participating in New York Cooperative Extensions farm business summary and analysis program since the early 1950s Each participating farmer receives a complete summary and analysis of his or her farm business in addition to this publication The information in this report is compiled by averaging data submitted from the region described at the bottom of this page
Program Objective
The primary objective of the dairy farm business summary DFBS is to provide farm managers information concerning profitability financial condishytion productivity and efficiency to be used to assist them in delineating the strengthsweaknesses of the farm business and to improve decision-making In short DFBS identifies the records farmers need and provides information to be used in making business and financial management decisions
Program Improvements
The 1985 DFBS report features improved accrual accounting procedures a new measure of farm profitability a more indepth balance sheet an annual cash flow statement and several major improvements in the business analysis format and the analysis measures used These and other changes are identified in the body of this report
The revised format provides one full page for the analysis of the farm cropping program and another for complete analysis of the dairy program Corn and hay crop related expenses are evaluated separately for cooperating farmers The cost of producing milk per cow and per hundredweight of milk sold has been compiled An annual cash flow worksheet has been added to the farmers individual report The popular Progress of The Farm Business report has been moved to page one of the farmers report and added to this pubHcation
Micro DFBS which allows Cooperative Extension agents and specialists to calculate and print individual farm business reports in their offices is now being used by more than 50 percent of our dairy farm management field staff This innovative program provides faster processing of farm record data and increased use of DFBS in farm management programs
This summary was prepared by Linda D Putnam and Robert A Milligan Department of Agricultural Economics New York State College of Agriculture and Life Sciences Cornell University in cooperation with Cooperative Extension Specialist Larry N Davis The Central Plain Region is comprised of Ontario Seneca Wayne and Yates counties
2
SUMMARY OF THE FARM BUSINESS
Business Characteristics
Finding the right management strategies is an important part of farming 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 farmers reporting these characteristics
BUSINESS CHARACTERISTICS 23 Central Plain Region Dairy Farms 1985
Type of Farm Number Type of Business Number Dairy 14 Single proprietorship 14 Part-time dairy 2 Partnership 9 Dairy cash-crop 5 Corporation o Part-time cash-crop dairy 2 Other o
Type of Ownership Number Type of Barn Number Owner 22 Stanchion 7 Renter 1 Freestall 13
Other 3
Milking System Number Business Record System Number Bucket amp carry o CAMIS 5 Dumping station 2 Account Book 8 Pipeline 8 Agrifax (mail-in only) 7 Herringbone parlor 12 On-Farm Computer I Other parlor 1 Other 2
Dairy Records Service Number Number DHIC 21 Other 1 OS 1 None o
Milk Diyersion Prosram Participants Number 4
The averages used in this report were compiled using data from all the participating dairy farms in this region unless noted otherwise There may be regular dairy farms part-time farms dairy cash-crop farms farm renters partnerships and corporations included in the average These specific classifications are used to separate farms in the State Business Summary
A part-time farm has less than 12 months of labor from all operators
A dairy cash-crop farm has income from crop sales that exceed 10 percent of milk sales
A farm renter owns no farm real estate at the end of the year or owns no tillable land
Milk Diversion Proampram Participants are the farmers that were in the 1984-85 federal milk diversion program These farms have also been included in the regional summary averages
3
Income Statement
The revised accrual income statement begins with an accounting of all farm business expenses
CASH AND ACCRUAL FARM EXPENSES 23 Central Plain Region Dairy Farms 1985
Cash Change in Change in Accrual EXBense Item faid + Inventoo + Acconta fapoundable Ji2Wenses
Hired Labor $ 26966 $ 29 $ 26995 Feed Dairy grain amp conc 29394 $-167 -142 29085 Dairy roughage 2583 0 -65 2518 Other livestock 2561 -27 6 2540 Machinerpound Mach hire rentlease 2958 -44 2914 Machinery repairsparts 11632 -83 522 12071 Auto expense (fs) 272 0 272 Fuel oil amp grease 9677 -80 10 9607 Livestock Replacement livestock 579 44 623 Breeding 2822 32 54 2908 Vet amp medicine 3778 -32 99 3845 Milk marketing 9582 0 9582 Cattle leaserent 187 0 187 Other livestock expense 7625 -85 117 7657 CroBs Fertilizer amp lime 12273 48 -620 11701 Seeds amp plants 5131 21 -58 5094 Spray other crop expo 5092 6 0 5098 Real Estate Landb1dgfence repair 2184 -208 1976 Taxes 5189 181 5370 Insurance 3543 29 3572 Rent amp lease 4292 373 4665 Other Telephone (fs) 945 0 945 Electricity (fs) 4735 20 4755 Interest paid 25805 363 26168 Miscellaneous 2438 -ill 2556 Total Operating $182243 $-370 $ 831 $182704 Expansion livestock $ 918 $ 0 $ 918 Machinery depreciation 20041 Building depreciation 7882
TOTAL ACCRUAL EXPENSES $211545
Cash Baid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual eXBenses are the costs of inputs actually used in this years production The value of feed and supplies used out of inventory are included as are the costs of inputs purchased but not paid for (net increases in accounts payable) Items paid for and not used (net additions to inventory) are excluded from accrual expenses as are payments made on inputs used in a prior year (net decreases in accounts payable)
4
Worksheets are provided to enable any dairy farmer to compute his or her accrual farm income and compare it with the averages on the opposite page
CASH AND ACCRUAL FARM EXPENSES WORKSHEET
Cash Change in Change in Accrual Expense Item Paid + Inventory + Accounts Payable Expenses
Hired Labor Feed Dairy grain amp cone Dairy roughage Other livestock Machinery Mach hire rentlease Machinery repairsparts Auto expense (fs) Fuel oil amp grease Livestock Replacement livestock Breeding Vet amp medicine Milk marketing Cattle leaserent Other livestock expense Crops Fertilizer amp lime Seeds amp plants Spray other crop expo Real Estate Landjbldgfence repair Taxes Insurance Rent amp lease Other Telephone (fs) Electricity (fs) Interest paid Miscellaneous Total Operating Expansion livestock Machinery depreciation Building depreciation
TOTAL ACCRUAL EXPENSES
$_-- $_-- $_-- $_--shy
$___ $_-- $_-- $_--shy
$ $ $ $
Cash paid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual expenses are the costs of inputs actually used in this years production Purchased feed and supplies used out of inventory must be included Beginning of year less end of year purchased feed and supply inventory equals the change in inventory to include in accrual expenses Feed supplies and services used but not paid for must be included by adding the net increase in operating accounts payable Increases in operating accounts payable are determined by subtracting the balance at the beginning of the year from the end of year balance
5
CASH AND ACCRUAL FARM RECEIPTS 23 Central Plain Region Dairy Farms 1985
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + InventoIY + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$177 112 11623
2073 3898
12481 6576
148 303
5234
$219448
$1216
-741 100
$ 575
$-423 550
0 0
298 -969
0 0
---22
$-322
$176689 13388
2073 3157
12879 5607
148 303
5456
$219700
Cash receipts includes the gross value of milk checks received during the year plus all other payments received for the sale of farm products services and government programs
Accrual receipts represent the value of all farm commodities produced and services actually provided by the farmer during the year Increases in liveshystock inventory caused by herd growth andor quality are included as accrual receipts Decreases in inventory caused by herd reduction are deducted Changes in inventories of crops grown are accounted for in accrual receipts Changes in accounts receivable include the January milk check for this Decemshybers marketings compared with the previous Januarys check and other delayed payments
CASH AND ACCRUAL FARM RECEIPT WORKSHEET
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + Inventory + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$_-- $_-shy
$_-- $_-shy
To calculate the change in inventory to be included in the above worksheet subtract the beginning of year values from the end of year values excluding appreciation Th~ changes in inventories caused by declining prices must be excluded from the calculation of accrual receipts Changes in accounts receivable are also determined by subtracting beginning of year balances from end of year balances
----_ _--shy
6
Profitability Analysis
Farm ownersoperators contribute labor management and capital to their businesses and the best combination of these resources produces optimum profits Farm profits 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
Net farm income is the total combined return to the farm operator(s) and other unpaid family members for their labor management and equity capital It is the farm familys net annual return from working managing financing and owning the farm business This is not a measure of cash available from the years business operation Cash flow is evaluated later in this report
Net farm income is computed with and without appreciation Appreciashytion represents the change in livestock machinery and real estate inventory values caused by changes in prices during the year Appreciation is a major factor contributing to changes in farm net worth and must be included in the profitability analysis
NET FARM INCOME 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Total accrual receipts Appreciation Livestock
Machinery Real Estate
Total Including Appreciation Total accrual expenses Net Farm Income (with appreciation) Net Farm Income (without appreciation)
$219700 -7658 5072
-114 $217000
211545 $ 5455 $ 8155
$_--shy
$_-shy
$_-shy$_-shy
Return to operators) labor management and equity capital measures the total business profits for the farm operators It is calculated by deducting a charge for unpaid family labor from net farm income Operator(s) labor is not included in unpaid family labor Return to operator(s) labor manageshyment and equity capital has been compiled with and without appreciation Appreciation is considered an important part of the return to ownership of farm assets
RETURN TO OPERATOR(S) LABOR MANAGEMENT AND EQUITY 23 Central Plain Region Dairy Farms 1985
Item
Av~uage Without With Wprec Wprec
My Farm Without With Wprec Apprec
Net farm income $8155 $5455 $_-shy $_-shyFamily labor unpaid
$550 per month 1100 1lQO Return to operator(s)
labor management amp equity $7055 $4355 $_-shy $_-shy
7
Labor and manaampement income is the share of net farm income without appreciashytion returned to the operator(s) labor and management Appreciation is not included as part of the return to labor and management Labor and management income is determined by deducting the cost of using equity capital at a real interest rate of five percent from the return to operator(s) labor manageshyment and equity capital excluding appreciation The interest charge reflects the long-term average rate of return that a farmer might expect to earn in comparable risk investments in a low inflation economy
Labor and manaampement income per operator measures the return to each operators labor and management
LABOR AND MANAGEMENT INCOME 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity without appreciation
Real interest 5 on $338140 equity capital
Labor amp Management Income (142 operators)
Labor amp Management Income per Operator
$ 7055 $_-shy
16907
$-9852
$-6954
$_-shy
$_--shy
Return on equity capital measures the net return remaining for the farmers equity or owned capital after a charge has been made for the owner-operators labor and management The earnings or amount of net farm income allocated to labor and management is the opportunity cost or value of operator(s) 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 end of year farm net worth or equity capital
RETURN ON EQUITY CAPITAL 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity capital with appreciation
Value of operator(s) labor amp management
Return on equity capital with appreciation
Rate of return on equity capital with appreciation
Return on equity capital without appreciation
Rate of return without appreciation
$ 4355
26118
$-21763
-64
$-19063
-56
$_--shy
$_-shy
$_-shy
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
2
SUMMARY OF THE FARM BUSINESS
Business Characteristics
Finding the right management strategies is an important part of farming 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 farmers reporting these characteristics
BUSINESS CHARACTERISTICS 23 Central Plain Region Dairy Farms 1985
Type of Farm Number Type of Business Number Dairy 14 Single proprietorship 14 Part-time dairy 2 Partnership 9 Dairy cash-crop 5 Corporation o Part-time cash-crop dairy 2 Other o
Type of Ownership Number Type of Barn Number Owner 22 Stanchion 7 Renter 1 Freestall 13
Other 3
Milking System Number Business Record System Number Bucket amp carry o CAMIS 5 Dumping station 2 Account Book 8 Pipeline 8 Agrifax (mail-in only) 7 Herringbone parlor 12 On-Farm Computer I Other parlor 1 Other 2
Dairy Records Service Number Number DHIC 21 Other 1 OS 1 None o
Milk Diyersion Prosram Participants Number 4
The averages used in this report were compiled using data from all the participating dairy farms in this region unless noted otherwise There may be regular dairy farms part-time farms dairy cash-crop farms farm renters partnerships and corporations included in the average These specific classifications are used to separate farms in the State Business Summary
A part-time farm has less than 12 months of labor from all operators
A dairy cash-crop farm has income from crop sales that exceed 10 percent of milk sales
A farm renter owns no farm real estate at the end of the year or owns no tillable land
Milk Diversion Proampram Participants are the farmers that were in the 1984-85 federal milk diversion program These farms have also been included in the regional summary averages
3
Income Statement
The revised accrual income statement begins with an accounting of all farm business expenses
CASH AND ACCRUAL FARM EXPENSES 23 Central Plain Region Dairy Farms 1985
Cash Change in Change in Accrual EXBense Item faid + Inventoo + Acconta fapoundable Ji2Wenses
Hired Labor $ 26966 $ 29 $ 26995 Feed Dairy grain amp conc 29394 $-167 -142 29085 Dairy roughage 2583 0 -65 2518 Other livestock 2561 -27 6 2540 Machinerpound Mach hire rentlease 2958 -44 2914 Machinery repairsparts 11632 -83 522 12071 Auto expense (fs) 272 0 272 Fuel oil amp grease 9677 -80 10 9607 Livestock Replacement livestock 579 44 623 Breeding 2822 32 54 2908 Vet amp medicine 3778 -32 99 3845 Milk marketing 9582 0 9582 Cattle leaserent 187 0 187 Other livestock expense 7625 -85 117 7657 CroBs Fertilizer amp lime 12273 48 -620 11701 Seeds amp plants 5131 21 -58 5094 Spray other crop expo 5092 6 0 5098 Real Estate Landb1dgfence repair 2184 -208 1976 Taxes 5189 181 5370 Insurance 3543 29 3572 Rent amp lease 4292 373 4665 Other Telephone (fs) 945 0 945 Electricity (fs) 4735 20 4755 Interest paid 25805 363 26168 Miscellaneous 2438 -ill 2556 Total Operating $182243 $-370 $ 831 $182704 Expansion livestock $ 918 $ 0 $ 918 Machinery depreciation 20041 Building depreciation 7882
TOTAL ACCRUAL EXPENSES $211545
Cash Baid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual eXBenses are the costs of inputs actually used in this years production The value of feed and supplies used out of inventory are included as are the costs of inputs purchased but not paid for (net increases in accounts payable) Items paid for and not used (net additions to inventory) are excluded from accrual expenses as are payments made on inputs used in a prior year (net decreases in accounts payable)
4
Worksheets are provided to enable any dairy farmer to compute his or her accrual farm income and compare it with the averages on the opposite page
CASH AND ACCRUAL FARM EXPENSES WORKSHEET
Cash Change in Change in Accrual Expense Item Paid + Inventory + Accounts Payable Expenses
Hired Labor Feed Dairy grain amp cone Dairy roughage Other livestock Machinery Mach hire rentlease Machinery repairsparts Auto expense (fs) Fuel oil amp grease Livestock Replacement livestock Breeding Vet amp medicine Milk marketing Cattle leaserent Other livestock expense Crops Fertilizer amp lime Seeds amp plants Spray other crop expo Real Estate Landjbldgfence repair Taxes Insurance Rent amp lease Other Telephone (fs) Electricity (fs) Interest paid Miscellaneous Total Operating Expansion livestock Machinery depreciation Building depreciation
TOTAL ACCRUAL EXPENSES
$_-- $_-- $_-- $_--shy
$___ $_-- $_-- $_--shy
$ $ $ $
Cash paid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual expenses are the costs of inputs actually used in this years production Purchased feed and supplies used out of inventory must be included Beginning of year less end of year purchased feed and supply inventory equals the change in inventory to include in accrual expenses Feed supplies and services used but not paid for must be included by adding the net increase in operating accounts payable Increases in operating accounts payable are determined by subtracting the balance at the beginning of the year from the end of year balance
5
CASH AND ACCRUAL FARM RECEIPTS 23 Central Plain Region Dairy Farms 1985
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + InventoIY + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$177 112 11623
2073 3898
12481 6576
148 303
5234
$219448
$1216
-741 100
$ 575
$-423 550
0 0
298 -969
0 0
---22
$-322
$176689 13388
2073 3157
12879 5607
148 303
5456
$219700
Cash receipts includes the gross value of milk checks received during the year plus all other payments received for the sale of farm products services and government programs
Accrual receipts represent the value of all farm commodities produced and services actually provided by the farmer during the year Increases in liveshystock inventory caused by herd growth andor quality are included as accrual receipts Decreases in inventory caused by herd reduction are deducted Changes in inventories of crops grown are accounted for in accrual receipts Changes in accounts receivable include the January milk check for this Decemshybers marketings compared with the previous Januarys check and other delayed payments
CASH AND ACCRUAL FARM RECEIPT WORKSHEET
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + Inventory + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$_-- $_-shy
$_-- $_-shy
To calculate the change in inventory to be included in the above worksheet subtract the beginning of year values from the end of year values excluding appreciation Th~ changes in inventories caused by declining prices must be excluded from the calculation of accrual receipts Changes in accounts receivable are also determined by subtracting beginning of year balances from end of year balances
----_ _--shy
6
Profitability Analysis
Farm ownersoperators contribute labor management and capital to their businesses and the best combination of these resources produces optimum profits Farm profits 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
Net farm income is the total combined return to the farm operator(s) and other unpaid family members for their labor management and equity capital It is the farm familys net annual return from working managing financing and owning the farm business This is not a measure of cash available from the years business operation Cash flow is evaluated later in this report
Net farm income is computed with and without appreciation Appreciashytion represents the change in livestock machinery and real estate inventory values caused by changes in prices during the year Appreciation is a major factor contributing to changes in farm net worth and must be included in the profitability analysis
NET FARM INCOME 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Total accrual receipts Appreciation Livestock
Machinery Real Estate
Total Including Appreciation Total accrual expenses Net Farm Income (with appreciation) Net Farm Income (without appreciation)
$219700 -7658 5072
-114 $217000
211545 $ 5455 $ 8155
$_--shy
$_-shy
$_-shy$_-shy
Return to operators) labor management and equity capital measures the total business profits for the farm operators It is calculated by deducting a charge for unpaid family labor from net farm income Operator(s) labor is not included in unpaid family labor Return to operator(s) labor manageshyment and equity capital has been compiled with and without appreciation Appreciation is considered an important part of the return to ownership of farm assets
RETURN TO OPERATOR(S) LABOR MANAGEMENT AND EQUITY 23 Central Plain Region Dairy Farms 1985
Item
Av~uage Without With Wprec Wprec
My Farm Without With Wprec Apprec
Net farm income $8155 $5455 $_-shy $_-shyFamily labor unpaid
$550 per month 1100 1lQO Return to operator(s)
labor management amp equity $7055 $4355 $_-shy $_-shy
7
Labor and manaampement income is the share of net farm income without appreciashytion returned to the operator(s) labor and management Appreciation is not included as part of the return to labor and management Labor and management income is determined by deducting the cost of using equity capital at a real interest rate of five percent from the return to operator(s) labor manageshyment and equity capital excluding appreciation The interest charge reflects the long-term average rate of return that a farmer might expect to earn in comparable risk investments in a low inflation economy
Labor and manaampement income per operator measures the return to each operators labor and management
LABOR AND MANAGEMENT INCOME 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity without appreciation
Real interest 5 on $338140 equity capital
Labor amp Management Income (142 operators)
Labor amp Management Income per Operator
$ 7055 $_-shy
16907
$-9852
$-6954
$_-shy
$_--shy
Return on equity capital measures the net return remaining for the farmers equity or owned capital after a charge has been made for the owner-operators labor and management The earnings or amount of net farm income allocated to labor and management is the opportunity cost or value of operator(s) 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 end of year farm net worth or equity capital
RETURN ON EQUITY CAPITAL 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity capital with appreciation
Value of operator(s) labor amp management
Return on equity capital with appreciation
Rate of return on equity capital with appreciation
Return on equity capital without appreciation
Rate of return without appreciation
$ 4355
26118
$-21763
-64
$-19063
-56
$_--shy
$_-shy
$_-shy
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
3
Income Statement
The revised accrual income statement begins with an accounting of all farm business expenses
CASH AND ACCRUAL FARM EXPENSES 23 Central Plain Region Dairy Farms 1985
Cash Change in Change in Accrual EXBense Item faid + Inventoo + Acconta fapoundable Ji2Wenses
Hired Labor $ 26966 $ 29 $ 26995 Feed Dairy grain amp conc 29394 $-167 -142 29085 Dairy roughage 2583 0 -65 2518 Other livestock 2561 -27 6 2540 Machinerpound Mach hire rentlease 2958 -44 2914 Machinery repairsparts 11632 -83 522 12071 Auto expense (fs) 272 0 272 Fuel oil amp grease 9677 -80 10 9607 Livestock Replacement livestock 579 44 623 Breeding 2822 32 54 2908 Vet amp medicine 3778 -32 99 3845 Milk marketing 9582 0 9582 Cattle leaserent 187 0 187 Other livestock expense 7625 -85 117 7657 CroBs Fertilizer amp lime 12273 48 -620 11701 Seeds amp plants 5131 21 -58 5094 Spray other crop expo 5092 6 0 5098 Real Estate Landb1dgfence repair 2184 -208 1976 Taxes 5189 181 5370 Insurance 3543 29 3572 Rent amp lease 4292 373 4665 Other Telephone (fs) 945 0 945 Electricity (fs) 4735 20 4755 Interest paid 25805 363 26168 Miscellaneous 2438 -ill 2556 Total Operating $182243 $-370 $ 831 $182704 Expansion livestock $ 918 $ 0 $ 918 Machinery depreciation 20041 Building depreciation 7882
TOTAL ACCRUAL EXPENSES $211545
Cash Baid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual eXBenses are the costs of inputs actually used in this years production The value of feed and supplies used out of inventory are included as are the costs of inputs purchased but not paid for (net increases in accounts payable) Items paid for and not used (net additions to inventory) are excluded from accrual expenses as are payments made on inputs used in a prior year (net decreases in accounts payable)
4
Worksheets are provided to enable any dairy farmer to compute his or her accrual farm income and compare it with the averages on the opposite page
CASH AND ACCRUAL FARM EXPENSES WORKSHEET
Cash Change in Change in Accrual Expense Item Paid + Inventory + Accounts Payable Expenses
Hired Labor Feed Dairy grain amp cone Dairy roughage Other livestock Machinery Mach hire rentlease Machinery repairsparts Auto expense (fs) Fuel oil amp grease Livestock Replacement livestock Breeding Vet amp medicine Milk marketing Cattle leaserent Other livestock expense Crops Fertilizer amp lime Seeds amp plants Spray other crop expo Real Estate Landjbldgfence repair Taxes Insurance Rent amp lease Other Telephone (fs) Electricity (fs) Interest paid Miscellaneous Total Operating Expansion livestock Machinery depreciation Building depreciation
TOTAL ACCRUAL EXPENSES
$_-- $_-- $_-- $_--shy
$___ $_-- $_-- $_--shy
$ $ $ $
Cash paid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual expenses are the costs of inputs actually used in this years production Purchased feed and supplies used out of inventory must be included Beginning of year less end of year purchased feed and supply inventory equals the change in inventory to include in accrual expenses Feed supplies and services used but not paid for must be included by adding the net increase in operating accounts payable Increases in operating accounts payable are determined by subtracting the balance at the beginning of the year from the end of year balance
5
CASH AND ACCRUAL FARM RECEIPTS 23 Central Plain Region Dairy Farms 1985
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + InventoIY + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$177 112 11623
2073 3898
12481 6576
148 303
5234
$219448
$1216
-741 100
$ 575
$-423 550
0 0
298 -969
0 0
---22
$-322
$176689 13388
2073 3157
12879 5607
148 303
5456
$219700
Cash receipts includes the gross value of milk checks received during the year plus all other payments received for the sale of farm products services and government programs
Accrual receipts represent the value of all farm commodities produced and services actually provided by the farmer during the year Increases in liveshystock inventory caused by herd growth andor quality are included as accrual receipts Decreases in inventory caused by herd reduction are deducted Changes in inventories of crops grown are accounted for in accrual receipts Changes in accounts receivable include the January milk check for this Decemshybers marketings compared with the previous Januarys check and other delayed payments
CASH AND ACCRUAL FARM RECEIPT WORKSHEET
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + Inventory + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$_-- $_-shy
$_-- $_-shy
To calculate the change in inventory to be included in the above worksheet subtract the beginning of year values from the end of year values excluding appreciation Th~ changes in inventories caused by declining prices must be excluded from the calculation of accrual receipts Changes in accounts receivable are also determined by subtracting beginning of year balances from end of year balances
----_ _--shy
6
Profitability Analysis
Farm ownersoperators contribute labor management and capital to their businesses and the best combination of these resources produces optimum profits Farm profits 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
Net farm income is the total combined return to the farm operator(s) and other unpaid family members for their labor management and equity capital It is the farm familys net annual return from working managing financing and owning the farm business This is not a measure of cash available from the years business operation Cash flow is evaluated later in this report
Net farm income is computed with and without appreciation Appreciashytion represents the change in livestock machinery and real estate inventory values caused by changes in prices during the year Appreciation is a major factor contributing to changes in farm net worth and must be included in the profitability analysis
NET FARM INCOME 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Total accrual receipts Appreciation Livestock
Machinery Real Estate
Total Including Appreciation Total accrual expenses Net Farm Income (with appreciation) Net Farm Income (without appreciation)
$219700 -7658 5072
-114 $217000
211545 $ 5455 $ 8155
$_--shy
$_-shy
$_-shy$_-shy
Return to operators) labor management and equity capital measures the total business profits for the farm operators It is calculated by deducting a charge for unpaid family labor from net farm income Operator(s) labor is not included in unpaid family labor Return to operator(s) labor manageshyment and equity capital has been compiled with and without appreciation Appreciation is considered an important part of the return to ownership of farm assets
RETURN TO OPERATOR(S) LABOR MANAGEMENT AND EQUITY 23 Central Plain Region Dairy Farms 1985
Item
Av~uage Without With Wprec Wprec
My Farm Without With Wprec Apprec
Net farm income $8155 $5455 $_-shy $_-shyFamily labor unpaid
$550 per month 1100 1lQO Return to operator(s)
labor management amp equity $7055 $4355 $_-shy $_-shy
7
Labor and manaampement income is the share of net farm income without appreciashytion returned to the operator(s) labor and management Appreciation is not included as part of the return to labor and management Labor and management income is determined by deducting the cost of using equity capital at a real interest rate of five percent from the return to operator(s) labor manageshyment and equity capital excluding appreciation The interest charge reflects the long-term average rate of return that a farmer might expect to earn in comparable risk investments in a low inflation economy
Labor and manaampement income per operator measures the return to each operators labor and management
LABOR AND MANAGEMENT INCOME 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity without appreciation
Real interest 5 on $338140 equity capital
Labor amp Management Income (142 operators)
Labor amp Management Income per Operator
$ 7055 $_-shy
16907
$-9852
$-6954
$_-shy
$_--shy
Return on equity capital measures the net return remaining for the farmers equity or owned capital after a charge has been made for the owner-operators labor and management The earnings or amount of net farm income allocated to labor and management is the opportunity cost or value of operator(s) 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 end of year farm net worth or equity capital
RETURN ON EQUITY CAPITAL 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity capital with appreciation
Value of operator(s) labor amp management
Return on equity capital with appreciation
Rate of return on equity capital with appreciation
Return on equity capital without appreciation
Rate of return without appreciation
$ 4355
26118
$-21763
-64
$-19063
-56
$_--shy
$_-shy
$_-shy
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
4
Worksheets are provided to enable any dairy farmer to compute his or her accrual farm income and compare it with the averages on the opposite page
CASH AND ACCRUAL FARM EXPENSES WORKSHEET
Cash Change in Change in Accrual Expense Item Paid + Inventory + Accounts Payable Expenses
Hired Labor Feed Dairy grain amp cone Dairy roughage Other livestock Machinery Mach hire rentlease Machinery repairsparts Auto expense (fs) Fuel oil amp grease Livestock Replacement livestock Breeding Vet amp medicine Milk marketing Cattle leaserent Other livestock expense Crops Fertilizer amp lime Seeds amp plants Spray other crop expo Real Estate Landjbldgfence repair Taxes Insurance Rent amp lease Other Telephone (fs) Electricity (fs) Interest paid Miscellaneous Total Operating Expansion livestock Machinery depreciation Building depreciation
TOTAL ACCRUAL EXPENSES
$_-- $_-- $_-- $_--shy
$___ $_-- $_-- $_--shy
$ $ $ $
Cash paid is the actual amount of money paid out during the year and does not necessarily represent the cost of goods and services actually used
Accrual expenses are the costs of inputs actually used in this years production Purchased feed and supplies used out of inventory must be included Beginning of year less end of year purchased feed and supply inventory equals the change in inventory to include in accrual expenses Feed supplies and services used but not paid for must be included by adding the net increase in operating accounts payable Increases in operating accounts payable are determined by subtracting the balance at the beginning of the year from the end of year balance
5
CASH AND ACCRUAL FARM RECEIPTS 23 Central Plain Region Dairy Farms 1985
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + InventoIY + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$177 112 11623
2073 3898
12481 6576
148 303
5234
$219448
$1216
-741 100
$ 575
$-423 550
0 0
298 -969
0 0
---22
$-322
$176689 13388
2073 3157
12879 5607
148 303
5456
$219700
Cash receipts includes the gross value of milk checks received during the year plus all other payments received for the sale of farm products services and government programs
Accrual receipts represent the value of all farm commodities produced and services actually provided by the farmer during the year Increases in liveshystock inventory caused by herd growth andor quality are included as accrual receipts Decreases in inventory caused by herd reduction are deducted Changes in inventories of crops grown are accounted for in accrual receipts Changes in accounts receivable include the January milk check for this Decemshybers marketings compared with the previous Januarys check and other delayed payments
CASH AND ACCRUAL FARM RECEIPT WORKSHEET
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + Inventory + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$_-- $_-shy
$_-- $_-shy
To calculate the change in inventory to be included in the above worksheet subtract the beginning of year values from the end of year values excluding appreciation Th~ changes in inventories caused by declining prices must be excluded from the calculation of accrual receipts Changes in accounts receivable are also determined by subtracting beginning of year balances from end of year balances
----_ _--shy
6
Profitability Analysis
Farm ownersoperators contribute labor management and capital to their businesses and the best combination of these resources produces optimum profits Farm profits 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
Net farm income is the total combined return to the farm operator(s) and other unpaid family members for their labor management and equity capital It is the farm familys net annual return from working managing financing and owning the farm business This is not a measure of cash available from the years business operation Cash flow is evaluated later in this report
Net farm income is computed with and without appreciation Appreciashytion represents the change in livestock machinery and real estate inventory values caused by changes in prices during the year Appreciation is a major factor contributing to changes in farm net worth and must be included in the profitability analysis
NET FARM INCOME 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Total accrual receipts Appreciation Livestock
Machinery Real Estate
Total Including Appreciation Total accrual expenses Net Farm Income (with appreciation) Net Farm Income (without appreciation)
$219700 -7658 5072
-114 $217000
211545 $ 5455 $ 8155
$_--shy
$_-shy
$_-shy$_-shy
Return to operators) labor management and equity capital measures the total business profits for the farm operators It is calculated by deducting a charge for unpaid family labor from net farm income Operator(s) labor is not included in unpaid family labor Return to operator(s) labor manageshyment and equity capital has been compiled with and without appreciation Appreciation is considered an important part of the return to ownership of farm assets
RETURN TO OPERATOR(S) LABOR MANAGEMENT AND EQUITY 23 Central Plain Region Dairy Farms 1985
Item
Av~uage Without With Wprec Wprec
My Farm Without With Wprec Apprec
Net farm income $8155 $5455 $_-shy $_-shyFamily labor unpaid
$550 per month 1100 1lQO Return to operator(s)
labor management amp equity $7055 $4355 $_-shy $_-shy
7
Labor and manaampement income is the share of net farm income without appreciashytion returned to the operator(s) labor and management Appreciation is not included as part of the return to labor and management Labor and management income is determined by deducting the cost of using equity capital at a real interest rate of five percent from the return to operator(s) labor manageshyment and equity capital excluding appreciation The interest charge reflects the long-term average rate of return that a farmer might expect to earn in comparable risk investments in a low inflation economy
Labor and manaampement income per operator measures the return to each operators labor and management
LABOR AND MANAGEMENT INCOME 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity without appreciation
Real interest 5 on $338140 equity capital
Labor amp Management Income (142 operators)
Labor amp Management Income per Operator
$ 7055 $_-shy
16907
$-9852
$-6954
$_-shy
$_--shy
Return on equity capital measures the net return remaining for the farmers equity or owned capital after a charge has been made for the owner-operators labor and management The earnings or amount of net farm income allocated to labor and management is the opportunity cost or value of operator(s) 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 end of year farm net worth or equity capital
RETURN ON EQUITY CAPITAL 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity capital with appreciation
Value of operator(s) labor amp management
Return on equity capital with appreciation
Rate of return on equity capital with appreciation
Return on equity capital without appreciation
Rate of return without appreciation
$ 4355
26118
$-21763
-64
$-19063
-56
$_--shy
$_-shy
$_-shy
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
5
CASH AND ACCRUAL FARM RECEIPTS 23 Central Plain Region Dairy Farms 1985
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + InventoIY + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$177 112 11623
2073 3898
12481 6576
148 303
5234
$219448
$1216
-741 100
$ 575
$-423 550
0 0
298 -969
0 0
---22
$-322
$176689 13388
2073 3157
12879 5607
148 303
5456
$219700
Cash receipts includes the gross value of milk checks received during the year plus all other payments received for the sale of farm products services and government programs
Accrual receipts represent the value of all farm commodities produced and services actually provided by the farmer during the year Increases in liveshystock inventory caused by herd growth andor quality are included as accrual receipts Decreases in inventory caused by herd reduction are deducted Changes in inventories of crops grown are accounted for in accrual receipts Changes in accounts receivable include the January milk check for this Decemshybers marketings compared with the previous Januarys check and other delayed payments
CASH AND ACCRUAL FARM RECEIPT WORKSHEET
Change in Cash Change in Accounts Accrual
Receipt Item Receipts + Inventory + Receivable + Receipts
Milk sales Dairy cattle Dairy calves Other livestock Crops Government receipts Custom machine work Gas tax refund Other
Total Accrual Receipts
$_-- $_-shy
$_-- $_-shy
To calculate the change in inventory to be included in the above worksheet subtract the beginning of year values from the end of year values excluding appreciation Th~ changes in inventories caused by declining prices must be excluded from the calculation of accrual receipts Changes in accounts receivable are also determined by subtracting beginning of year balances from end of year balances
----_ _--shy
6
Profitability Analysis
Farm ownersoperators contribute labor management and capital to their businesses and the best combination of these resources produces optimum profits Farm profits 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
Net farm income is the total combined return to the farm operator(s) and other unpaid family members for their labor management and equity capital It is the farm familys net annual return from working managing financing and owning the farm business This is not a measure of cash available from the years business operation Cash flow is evaluated later in this report
Net farm income is computed with and without appreciation Appreciashytion represents the change in livestock machinery and real estate inventory values caused by changes in prices during the year Appreciation is a major factor contributing to changes in farm net worth and must be included in the profitability analysis
NET FARM INCOME 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Total accrual receipts Appreciation Livestock
Machinery Real Estate
Total Including Appreciation Total accrual expenses Net Farm Income (with appreciation) Net Farm Income (without appreciation)
$219700 -7658 5072
-114 $217000
211545 $ 5455 $ 8155
$_--shy
$_-shy
$_-shy$_-shy
Return to operators) labor management and equity capital measures the total business profits for the farm operators It is calculated by deducting a charge for unpaid family labor from net farm income Operator(s) labor is not included in unpaid family labor Return to operator(s) labor manageshyment and equity capital has been compiled with and without appreciation Appreciation is considered an important part of the return to ownership of farm assets
RETURN TO OPERATOR(S) LABOR MANAGEMENT AND EQUITY 23 Central Plain Region Dairy Farms 1985
Item
Av~uage Without With Wprec Wprec
My Farm Without With Wprec Apprec
Net farm income $8155 $5455 $_-shy $_-shyFamily labor unpaid
$550 per month 1100 1lQO Return to operator(s)
labor management amp equity $7055 $4355 $_-shy $_-shy
7
Labor and manaampement income is the share of net farm income without appreciashytion returned to the operator(s) labor and management Appreciation is not included as part of the return to labor and management Labor and management income is determined by deducting the cost of using equity capital at a real interest rate of five percent from the return to operator(s) labor manageshyment and equity capital excluding appreciation The interest charge reflects the long-term average rate of return that a farmer might expect to earn in comparable risk investments in a low inflation economy
Labor and manaampement income per operator measures the return to each operators labor and management
LABOR AND MANAGEMENT INCOME 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity without appreciation
Real interest 5 on $338140 equity capital
Labor amp Management Income (142 operators)
Labor amp Management Income per Operator
$ 7055 $_-shy
16907
$-9852
$-6954
$_-shy
$_--shy
Return on equity capital measures the net return remaining for the farmers equity or owned capital after a charge has been made for the owner-operators labor and management The earnings or amount of net farm income allocated to labor and management is the opportunity cost or value of operator(s) 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 end of year farm net worth or equity capital
RETURN ON EQUITY CAPITAL 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity capital with appreciation
Value of operator(s) labor amp management
Return on equity capital with appreciation
Rate of return on equity capital with appreciation
Return on equity capital without appreciation
Rate of return without appreciation
$ 4355
26118
$-21763
-64
$-19063
-56
$_--shy
$_-shy
$_-shy
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
6
Profitability Analysis
Farm ownersoperators contribute labor management and capital to their businesses and the best combination of these resources produces optimum profits Farm profits 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
Net farm income is the total combined return to the farm operator(s) and other unpaid family members for their labor management and equity capital It is the farm familys net annual return from working managing financing and owning the farm business This is not a measure of cash available from the years business operation Cash flow is evaluated later in this report
Net farm income is computed with and without appreciation Appreciashytion represents the change in livestock machinery and real estate inventory values caused by changes in prices during the year Appreciation is a major factor contributing to changes in farm net worth and must be included in the profitability analysis
NET FARM INCOME 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Total accrual receipts Appreciation Livestock
Machinery Real Estate
Total Including Appreciation Total accrual expenses Net Farm Income (with appreciation) Net Farm Income (without appreciation)
$219700 -7658 5072
-114 $217000
211545 $ 5455 $ 8155
$_--shy
$_-shy
$_-shy$_-shy
Return to operators) labor management and equity capital measures the total business profits for the farm operators It is calculated by deducting a charge for unpaid family labor from net farm income Operator(s) labor is not included in unpaid family labor Return to operator(s) labor manageshyment and equity capital has been compiled with and without appreciation Appreciation is considered an important part of the return to ownership of farm assets
RETURN TO OPERATOR(S) LABOR MANAGEMENT AND EQUITY 23 Central Plain Region Dairy Farms 1985
Item
Av~uage Without With Wprec Wprec
My Farm Without With Wprec Apprec
Net farm income $8155 $5455 $_-shy $_-shyFamily labor unpaid
$550 per month 1100 1lQO Return to operator(s)
labor management amp equity $7055 $4355 $_-shy $_-shy
7
Labor and manaampement income is the share of net farm income without appreciashytion returned to the operator(s) labor and management Appreciation is not included as part of the return to labor and management Labor and management income is determined by deducting the cost of using equity capital at a real interest rate of five percent from the return to operator(s) labor manageshyment and equity capital excluding appreciation The interest charge reflects the long-term average rate of return that a farmer might expect to earn in comparable risk investments in a low inflation economy
Labor and manaampement income per operator measures the return to each operators labor and management
LABOR AND MANAGEMENT INCOME 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity without appreciation
Real interest 5 on $338140 equity capital
Labor amp Management Income (142 operators)
Labor amp Management Income per Operator
$ 7055 $_-shy
16907
$-9852
$-6954
$_-shy
$_--shy
Return on equity capital measures the net return remaining for the farmers equity or owned capital after a charge has been made for the owner-operators labor and management The earnings or amount of net farm income allocated to labor and management is the opportunity cost or value of operator(s) 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 end of year farm net worth or equity capital
RETURN ON EQUITY CAPITAL 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity capital with appreciation
Value of operator(s) labor amp management
Return on equity capital with appreciation
Rate of return on equity capital with appreciation
Return on equity capital without appreciation
Rate of return without appreciation
$ 4355
26118
$-21763
-64
$-19063
-56
$_--shy
$_-shy
$_-shy
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
7
Labor and manaampement income is the share of net farm income without appreciashytion returned to the operator(s) labor and management Appreciation is not included as part of the return to labor and management Labor and management income is determined by deducting the cost of using equity capital at a real interest rate of five percent from the return to operator(s) labor manageshyment and equity capital excluding appreciation The interest charge reflects the long-term average rate of return that a farmer might expect to earn in comparable risk investments in a low inflation economy
Labor and manaampement income per operator measures the return to each operators labor and management
LABOR AND MANAGEMENT INCOME 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity without appreciation
Real interest 5 on $338140 equity capital
Labor amp Management Income (142 operators)
Labor amp Management Income per Operator
$ 7055 $_-shy
16907
$-9852
$-6954
$_-shy
$_--shy
Return on equity capital measures the net return remaining for the farmers equity or owned capital after a charge has been made for the owner-operators labor and management The earnings or amount of net farm income allocated to labor and management is the opportunity cost or value of operator(s) 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 end of year farm net worth or equity capital
RETURN ON EQUITY CAPITAL 23 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Return to operator(s) labor management amp equity capital with appreciation
Value of operator(s) labor amp management
Return on equity capital with appreciation
Rate of return on equity capital with appreciation
Return on equity capital without appreciation
Rate of return without appreciation
$ 4355
26118
$-21763
-64
$-19063
-56
$_--shy
$_-shy
$_-shy
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
8
Farm and Family Fipancial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis The first step is to recognize all the assets and liabilities that make up the balance sheet The second step is to analyze your filled out balance sheet by evaluating changes made during the year
1985 FARM BUSINESS amp NONFARM BALANCE SHEET 23 Central Plain Region Dairy Farms 1985
Farm Liabilities Farm Ass~tsect JSn 1 Dec 31 ~ Net W0Ith JSn 1 Dilc 31
Current Current Farm cash checking Accounts payable $ 10064 $ 9151 amp saving$ $ 2675 $ 1734 Operating debt 5982 6732
Accounts rec 16672 19609 Short-term 448 4314 Feed amp supplies 42430 42412
Total $ 68777 $ 70755 Total $ 18494 $ 20196 Intemilsliate Intermilsllate Dairy cows 97805 99503
owned 79625 78604 leased 0 0
Heifers 42800 37495 Bullsother lvstk 3886 3027 Macheq owned 130959 127430 Macheq leased Coop stock amp cert
1214 1JZ2~
1755 lJ2~2
Financial lease (cattlemach ) 1214 1Z55
Total $272207 $262276 Total $ 99019 $101258 l=ong-Term Long-Term Landjbulldings 181283 176493
owned 314960 303056 leased 1QQ2 1QJ Total $315969 $304090 Financial lease
(structures) 1009 103 Total $182291 $177528
Total Farm Assets $656953 $637122 Total Farm Liab $299804 $298981 FARM NET WORTH $357149 $338140
Nonfarm Liabilities NonfSI Assect~tsect Jm 1 D~pound n ~ N~t i2Ith Jm 1 Qec 31
Personal cash chkg amp savings $ 505
Cash value life ins 5331 $ 692
6058
Nonfarm Uab NOHfARM HiT iQRTH
IfARM amp6QHFARM
$ 0 ~17lJZ Jan 1
$ 0 ~18JIZ Qec ~l
Nonfarm real estate 1063 451 ITotal Assets $674090 $655439 Auto (personal sh) Stocks ampbonds
2861 1611
3087 2034
ITotal Liabilities I
2998Q4 98981
Household furn 5365 5674 I All other Ql 321 ITOTAL FARM amp NON-
Total Nonfarm $ 17137 $ 18317 I FARM NET WORTH $374286 $356457
Financial lease obligations are included in the balance sheet The present values of all future payments are listed as liabilities since the farmer (lessee) is committed to make the payments The present values are also listed as assets representing the future value the item has to the business
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
9
1985 FARM BUSINESS amp NONFARM BALANCE SHEET
Farm Assets Jan 1 Dec 31 Farm Liabilities amp Net Worth Jan 1 Dec 31
Current Farm cash checking amp savings
Accounts rec Feed amp supplies
Current Accounts payable Operating debt Short-term
Total Total
Intermediate Dairy cows
owned leased
Heifers Bullsother Ivstk Macheq owned Macheq leased Coop stock amp cert
Total
IntlUJlediate
Financial lease (cattlemach )
Total
Loni-Term LandbuUdings
owned leased
Loni-Term
Total
Total Farm Assets
Financial lease (structures) Total
Total Farm Liab FARM NET WORTH
Nonfarm Liabilities Nonfarm Assets Jan 1 Dec 31 ampNet Worth Jan 1 Dec 31
Nonfarm Liab Personal cash
amp savings chkg
Cash value life ins
Nonfarm real est Auto (pers share) Stocks ampbonds
Total Nonfarm Liabilities
Household furn All other Nonfarm
Total Nonfarm Net Worth
TOTAL FARM ~ NONFARM Jan 1 Dec 31
Total Farm amp Nonfarm Assets Less Total Farm amp Nonfarm Liabilities Farm amp Nonfarm Net Worth
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
10
Balance sheet analysis continues by examining financial and debt ratios and factors measuring levels of debt Percent equity is calculated by dividing net worth by assets The debt to asset ratio is compiled by dividing liabilities by assets Low debt to asset ratios reflect strength in solvency and the potential capacity to borrow The debt analysis ratios show how well the debt is structured and managed
BALANCE SHEET ANALYSIS 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Change in Farm Net Worth From Balance Sheet -$19009 Excluding Appreciation -$16309
Financial Ratios -Farm Percent equity 53 Debtasset ratio total 047
long-term 058 intermediatecurrent 036
Financial Ratios - Farm amp Nonfarm Percent equity 54 Total debtasset ratio 046 Farm Debt Analysis Accounts payable as of total debt 3 Long-term liabilities as a of total debt 59
Intermediate amp current debt
Current amp inter 1iab as a of total debt 41
Farm Debt Levels Total farm debt Long-term debt
Per Cow $3082
1830
Per Tillable Acre Owned
$1220 725
Per Cow $_-shy
1252 496
$_-shy$_-shy
----_ ---_ ---_
Per Tillable Acre Owned $_--shy
Balance sheet analysis concludes with a summary of the inventory balancing procedure for farm real estate and machinery and equipment It is important to account for the value of these 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
FARM INVENTORY BALANCE 23 Central Plain Region Dairy Farms 1985
Item Avamp of Reampional Farms My Farm ~ Mach lEg ~ Mach lEg
Value beg of year $314960 $130959 $_-shy $_-shyPurchases $5427 $11654 $_-- $_-shyLost capital 1210 deg Sales 8126 214 Depreciation 7882 20041 Net investment -11791 -8601 -+---shy -+--shyAppreciation -114 5072 ++---shy $-shyValue end of year $303056 $127430 $_-shy
$1330 land and $4097 buildings andor depreciable improvements
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
11
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to determine how well the cash generated by the business plus that brought in from outside met the annual cash needs of the business and the farm family Understanding last years cash flow is the first step toward planning and managing cash flow for the current and future years
The Annual Cash Flow Statement in the following table is structured to compare all the cash inflows with all the cash outflows for the year Cash inflows include all the cash farm receipts receipts from the sale of farm assets additional funds borrowed as well as the amount of cash available at the beginning of the year Cash outflows include all the cash farm expenses capital purchases principal payments money taken out of the business and the cash balance left at years end When all the cash inflows and outflows are correct the statement will balance If the imbalance (error) amount is positive recorded cash inflows exceed outflows by this amount If it is negative cash outflows are too high in relation to inflows
ANNUAL CASH FLOW STATEMENT 23 Central Plain Region Dairy Farms 1985
Item Average My Farm Cash Inflows
Beginning farm cash checking amp savings
Cash farm receipts
Sale of assets Machinery
Real estate
Money borrowed (intermediate amp long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases Expansion livestock
Machinery
Real estate
Principal payments (intermediate amp long-term)
Principal payments (short-term)
Decrease in operating debt
Nonfarm debt payments
Personal withdrawals amp family expo
Ending farm cash checking amp savings
Total
Imbalance (error)
$ 2675
219448
214
7363
24469
2485
750
1461
0
$258865
$182243
918
11654
5427
27561
620
0
0
10708
1734
$240860
$ 18005
$
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
12
Repayment Analysis
The second step of cash flow planning is to compare and evaluate debt payments planned and made last year and estimate the payments required in the current year It is helpful to compare and evaluate by using debt payments per unit of production and receiptdebt payment ratios
FARM DEBT PAYMENTS PLANNED Same 17 Central Plain Region Dairy Farms 1985 and 1986
Debt Payments
Avetaamp~ 1985 Payments
Planned Made Planned
1986
My Farm 1985 Payments
Planned Made Planned
1986
Long-term IntermShort-Operating (net
redu
(net reduction)
ediate-term term
ction Accounts payable
$20431 30095 9705
0
6294
$28583 29330 1004
0
3548
$17021 27543
3490
3769
2112
$_-- $_-- $_-shy
Total $66526 $62465 $53934 $ $_-- $_-shy
Per cow Per cwt Percen
1985 milk t of total
$723 $477
$679 $448
$ $_-shy$_-_$_-shy
1985 receipts Percent of 1985
29 27
milk receipts 38 35
The Cash Flow Covetaampe Ratio measures the ability of the farm business to meet its planned debt payment schedule The ratio shows the percentage of planned payments that could have been made with last years available cash flow report
Farmers that did not participate in DFBS last year will find in their a cash flow coverage ratio based on this years planned debt payments
CASH FLOW COVERAGE RATIO Same 17 Central Plain Region Dairy Farms 1985
Item Averaampe My Farm
Cash farm receipts $227219 $_--shy- Cash farm expenses 189555
+ Interest paid 25369
- Net personal withdrawals from farm 11980
(A) Amount Available for Debt Service $ 51053 $---- shy(B) Debt Payments Planned for 1985 $ 66526 $---- shy(A + B) - Cash Flow Coverage Ratio for 1985 077
Personal withdrawals and family expenditures less nonfarm income If family withdrawals are excluded the cash flow coverage ratio will be incorrect
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
------
13
ANALYSIS OF THE FARM BUSINESS
The farm business has been divided into three parts indepth analysis of the cropping program the dairy prograaffecting capital and labor efficiency
to allow a m and the
more factors
Cropping Program Analysis
The cropping program is an important part of the dairy farm business and sometimes it is overlooked and neglected A complete evaluation of available land resources how they are being used how well crops are producing and what it costs to produce them is required to evaluate alternative cropping and feed purchasing choices
LAND RESOURCES AND CROP PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item Average My Farm
Land Tillable Nonti1lable Other nontillable
Total
Crop Yields Hay crop Corn silage
Other forage Total forage Corn grain Oats Wheat Other crops Tillable pasture Idle
Total Tillable Acres
~ Rented Total 245 163 407
20 7 26 90 -1Q 100
355 180 533
fimsect ~ fIQdLAcI~ 23 134 29 tn DM 22 72 132 tn
47 tn DM 2 14 12 tn DM
23 205 35 tn DM 22 124 806 bu 13 46 807 bu
9 36 626 bu 8 42 6 19
12 45 407
Rented
~ frodLAcre tn DM tn tn DM tn DM tn DM bu bu bu
Average crop acres and yields compiled for the region are for the number of 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 measures of crop management measure how efficiently the land resource is being used and how well total forage requirements are being met
CROP MANAGEMENT FACTORS 23 Central Plain Region Dairy Farms 1985
Item My Farm
Total tillable acres per cow Total forage acres per cow Harvested forage dry matter tons per cow
431 217 760
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
14
Cropping Program Analysis (continued)
A substantial number of cooperators have allocated crop expenses to hay crop corn and other crop production This additional data has been compiled to show the traditional crop expenses per acre and per production unit for these crops Corn production has been converted to corn silage equivalent using 588 bushels of dry shell equivalent corn silage as fed
to equal one ton of
CROP RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Total Per Per Hay Crop Corn Ton Corn Other Till Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eguiv Per Acre
Fertilizer amp lime $2872 $ 975 $171 $4458 $181 $2950 Seeds amp plants 1250 726 127 1932 079 877 Spray amp other crop
expense 1251 408 -2ll 2480 JJll 799 Total $5374 $2110 $369 $8869 $361 $4627
My Farm
Fertilizer amp lime $__ $__ $__ $_- $_- $_shySeeds amp plants Spray amp other crop
expense Total $__ $== $==
Hay 12 farms reporting 132 average acres corn 12 farms reporting 199 average acres other crops 5 farms reporting 131 average acres
Corn grain converted to silage equivalent using 588 bushels - one ton silage as fed
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 per total tillable acre
ACCRUAL MACHINERY EXPENSES 23 Central Plain Region Dairy Farms 1985
My Farm Machinery Total Per Til Total Per Til
Expense Item Expenses Acre Expenses Acre
Fuel oil amp grease Machinery repairs amp parts
$ 9606 12071
$2358 2963
$_-shy $_-shy
Machine hire rent amp lease 2914 715 Auto expense (farm share) 272 067 Interest (5) 6460 1585 Depreciation 20041 4919
Total $51364 $12607 $_-shy $_--shy
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
15
Dairy Program Analysis
Analysis of the dairy enterprise can tell a great deal about the strengths and weaknesses of the dairy farm business 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 This real increase in inventory has been included as an accrual farm receipt on page 5
DAIRY HERD INVENTORY 23 Central Plain Region Dairy Farms 1985
pairy Cows Heifers Item Number Value Number Value
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
92
96 97 95
$79625 3763
-4784 $78604
89
87
88
$42800 -2548 -2757
$37495
My Farm
Beginning of year (owned) + Change without appreciation + Appreciation End of year (owned) End including leased Average number
$_--shy
$_--shy
$_--shy
$_--shy
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm These measures of milk output are based on pounds of milk marketed during the year
MILK PRODUCTION 23 Central Plain Region Dairy Farms 1985
Item
Total milk sold lbs
Average
1399978
My Farm
Milk sold per cow lbs 14811
Average milk plant test percent butterfat 365
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
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 Total costs of producing milk include the operating costs plus expansion livestock purchased depreciation on machinery and buildings the value of operator(s) labor and management and the intershyest charge for using equity capital Note that the cost of labor manageshyment and equity capital has been excluded in the intermediate compilation
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Total Per Cow Per Cwt Total Per Cow Per Cwt
Accrual Receipts Milk Dairy cattle
$176689 13389
$1869 142
$1262 096
$_-shy $_-shy $_-shy
Dairy calves 2073 ----22 015 Total $192151 $2033 $1373 $_-shy $_-shy $_-shy
Accrual Costs of Producing Milk Operating costs Total costs withshy
$140178 $1483 $1001 $_-shy $_-shy $_-shy
out op(s) labor mgmt amp capital
Total Costs $169633 $212658
$1795 $2250
$1212 $1519
$_-shy$_-shy
$_-shy$_-shy
$_-shy$_-shy
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 the comparison of different size dairy farms
DAIRY RELATED ACCRUAL EXPENSES 23 Central Plain Region Dairy Farms 1985
Average My Farm Item Per Cow Per Cwt Per Cow Per Cwt
Purchased dairy grain amp concentrates
Purchased dairy roughage Total Purchased
Dairy Feed Purchased grain amp conc as of milk receipts
Purchased feed amp crop expo Purchased feed amp crop expo
as of milk receipts Breeding Veterinary amp medicine Milk marketing Cattle lease Other livestock expense
$308 ---12
$208 JLU
$ $_-shy
$339 $229 $ $_--shy
$571 16
$386 $ -- $_-shy
$31 41
101 2
81
3U $021 027 068 001 055
$ $_-shy
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
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 managements success
CAPITAL EFFICIENCY 23 Central Plain Region Dairy Farms 1985
Per Per Per Tillable Per Tillable Item Yorker Cgw Acre Acre Owned
Farm capital Real estate Machinery amp equipment Capital turnover years
$180569
36469
$6845 3280 1383
295
$1588
321
$2641 1265
My Farm Farm capital Real estate
$_-shy $_--shy $_-shy $_-shy
Machinery amp equipment Capital turnover years
LABOR FORCE INVENTORY AND ANALYSIS 23 Central Plain Region Dairy Farms 1985
Labor Force Months Age
Operator number 1 Operator number 2 Operator number 3 Family paid Family unpaid Hired
Total
My Farm Total Operators
11 4 2 6 2
18 43
44 44 32
+ 12 shy
+ 12 shy+ 12 shy
Years of gf Educ
Value of Labor amp Mgmt
14 13 13
$17283 6574 2261
358 Yorker Equivalent 142 OperatorManager Equiv
___ Yorker Equivalent OperatorManager Equiv
Labor Efficiency
Average Total Per Yorker Total
My Farm Per Yorker
Cows average number Milk sold pounds Tillable acres
95 1399978
407
26 390692
114 York units 1105 308
Average My Eatm Per Per Per Per
Labor Costs Total Cow Iil Acre Iotal Cow Til Acre
Value of operator(s) labor ($800month) $13600 $144 $ 3338 $ $ $
Family unpd ($550mo) 1100 12 270 Hired 26995 286 6626 Total Labor $41695 $441 $10234 $ $ $ Machinery Cost $51364 $543 $12607 $ $ $ Total Labor amp Mach $93059 $985 $22840 $ $ $
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
18
ANNUAL CASH FLOW WORKSHEEET
Regional Hy Farm Expected 1986 Item Average Total Per Cow Change Projection
(per cow) Average number of cows 95 Accrual Oper Receipts Milk Dairy cattle
$186929 14165
$___ $_shy ---_$_--shyDairy calves 21 93 Other livestock 3340 Crops 13625 Misc receipts 121 80
Total $232432 $___ $_shy ---_$_--shyAccrual Oper Expensect~s Hired labor Dairy grain amp conc
$ 28560 30770
$ $_shy ---_$_--shyDairy roughage 31 79 Other lvstk feed 2674 Mach hirerentlease 3067 Mach Fuel
rpr parts amp auto oil amp grease
12993 10112
Replacement lvstk 655 Breeding 3078 Vet amp medicine 4069 Milk marketing 101 37 Cattle lease 1 98 Other 1vstk expo 8101 Fertilizer amp lime 12318 Seeds amp plants 5362 Sprayother crop expo 5366 Land bldg fence repair 2080 Taxes 5653 Insurance 3760 Real est rentlease 4911 Utilities 6000 Miscellaneous 2691
Total Less Int Paid $164775 $_--shy
Net Accrual Operating Income (total) (total) (without interest paid) $63163 $_-- $_--shy
- Change in lvstkcrop inv 575 - Change in accts rec -322 + Change in feedsupply inv -370 + Change in accts payable 831 NET CASH FLOW $63861 $_-- $_--shy- Personal withdrawals amp
family expenditures 10708 Available for Debt Payments
Investments amp Savings $53153 $_-- $_--shy- Farm Debt Payments 55502 Available for Investment
amp Savings $-2349 $_-- $_--shy- Capital Purchases cattle
machinery amp improvements $17999 Additional Capital Needed $_-- $_--shy
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
___ _
19
PROGRESS OF THE FARM BUSINESS
Comparing your business with average data from regional DFBS cooperashytors 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 17 Central Plain Dairy Farms 1984 and 1985
Average My Farm Selected Factors 1984 1985 1984 1985 Goal
Size of Business Average number of cows Average number of heifers Milk sold lbs Worker equivalent Total tillable acres
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 per worker lbs
Cost Control Grain amp conc purchased
as of milk sales Dairy feed amp crop expo
per cwt milk Labor amp mach costscow
Capital Efficiency Farm capital per cow Real estate per cow Mach amp equip per cow Capital turnover years
Profitability Net farm inc wo apprec Net farm inc wapprec Labor amp mgmt income Rate of return on eq
capital wapprec
Financial Summary Farm net worth Debt to asset ratio Farm debt per cow
Average for the year
89 92 88 89
1340447 1393320 353shy408
15081 31
14
25 379267
17
$439 $1079
$7740 $3749 $1522
30
$12702 $22767 $-7123
-09
$377688 045
$3537
375 409
15135 31 14
25 371552
16
$391 $1094
$7434 $3592 $1492
30
$8617 $3815
$-10616
-62
$362655 046
$3273
$___ $___ $___
$___ $___ $___
$_-shy$_-shy$_-shy
$_-shy$_--shy$_-shy
$_-shy$_-shy$_-shy
-
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
21
Financial AnalYsis Chart
The farm financial analysis chart 1s designed just like the ~ Business Chart and may be used to measure the financial health of the farm business Most of the financial measures used in the chart are presented on ~ages 7 10 12 and 17 of this publication
FINANCIAL ANALYSIS CHART 458 New York Dairy Farms 1984
Liguidity ~Reeayent Available for Cash Flow Debt Payments
Debt Payments Debt Service Coverage as Percent of Debt Per Cow Per Cow Ratio Milk Sales Per Cow
$ 36 $909 767 2 $ 104 176 640 216 9 638 277 537 141 14 1142 362 469 110 19 1625 438 411 91 22 1930 500 357 75 26 2377 571 279 58 30 2688 656 216 46 35 3161 752 126 28 40 3770 971 -95 -56 52 5072
Solvency Efficiency ~ Profit~bility DebtlAsset Ratio Capital Rate of Return on
Leverage Ratio l
-Percent Eguity
Long Term
Intermediate amp Current
Turnover (years) Eguity Investment2
02 99 00 00 160 18 13
12 90 02 04 190 8 9
24 81 14 11 206 5 7
37 73 30 16 220 3 6
51 67 41 23 234 1 4
70 60 51 29 251 -1 3
94 53 62 37 266 -3 1 122 46 73 45 295 -6 0 172 38 85 55 325 -11 -3 504 20 1 27 80 454 -37 -8
IDollars of debt per dollar of equity computed by dividing total liabilities by total equity
2Return on all farm capital (no deduction for interest paid) divided by total farm assets
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
22
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
Less than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Ca~ita1 Investment (end of year) Livestock Feed amp supplies Machinery amp equipment Land amp buildings
$ 39803 11239 40402
120967
$ 58991 17653 53984
142160
$ 81180 26056 76669
193710
$100136 34432 97951
225287
TOTAL INVESTMENT $212411 $272788 $377615 $457806
Receipts Milk sales $ 58562 $ 89405 $123086 $155027 Dairy cattle sold Other livestock sales
4531 1004
5287 1626
8630 2110
10295 1890
Crop sales Miscellaneous receipts
Total Cash Receipts Increase in livestock Increase in feed amp supplies Appreciation
425 3Zn
$ 68313 -589 501
1609
738 3291
$101047 687
10 3371
1411 5448
$140685 889
2085 6243
2271 5640
$175123 3018
435 5188
TOTAL FARM RECEIPTS $ 69834 $105115 $149902 $183764 TOTAL FARM REC EXCL APPREC $ 68225 $101744 $143659 $178576
Expenses Hired labor Dairy grain amp concentrate Other feed
$ 2503 16993
1632
$ 5326 23274 1422
$ 8539 30095 2227
$ 13584 36692
1486 Machine hire Machinery repairAuto expense (farm share) Gas amp oil
764 3072
446 2072
949 4013
415 3157
1494 5929
502 4494
1501 7527
485 6131
Replacement animals Breeding fees Veterinary amp medicine Milk marketing Cattle lease
549 875
1072 4893
0
766 1238 1617 7345
55
1692 2062 2641 9676
87
1116 2548 3098
12223 125
Other livestock expenseFertilizer amp lime Seeds amp plants Spray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share)Interest paid Misc expenses (incl rent)
Total Cash Expenses Expansion livestock Machinery depreciation Building depreciationUnpaid family labor Interest on equity 5
2362 2355
697 693 936
3292 2018 5789 1941
$ 54454 60
6475 2001 1844 1433
3650 3446 1081
813 1190 4120 2879 9300 30~~
$ 79144 238
7623 3166 1750 21sect2
5511 6291 1933 1438 1971 5922 3875
12660 4125
$113164 702
11531 5605 1821
12618
6278 8000 2602 1988 2339 7203 4700
14845 2609
$140080 1062
15287 5742 1805
15111
TOTAL FARM EXPENSES $ 72267 $101083 $145501 $179747
Financial Summax~ NET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPER LABOR MGT amp OWNSHP INCIOPER
$13 859 $-4042
107 $-3778
$4673
$21903 $661 118 $560
$11181
$27521 $-1842
132 $-1395 $12939
$35043 $-1171
134 $-874
$14767
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
23
FARM BUSINESS SUMMARY BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Capital Investment (end of year) Livestock $124747 $166776 $223343 $ 317993 $ 470722 Feed amp supplies 41199 60934 81393 113736 189321 Machinery amp equipment 111838 134403 183205 190946 259528 Land amp buildings 242050 348070 415970 581058 879980
TOTAL INVESTMENT $519834 $710183 $903911 $1203733 $1799551
Receipts Milk sales $189618 $256245 $343599 $505975 $ 838467 Dairy cattle sold 12783 16560 24102 37420 48329 Other livestock sales 2448 3855 5448 8275 9101 Crop sales 1066 2528 5851 4013 14125 Miscellaneous receipts 4509 9564 18177 19824 11764
Total Cash Receipts $210424 $288752 $397177 $575507 $ 921786 Increase in livestock 5264 2971 7534 4471 51943 Increase in feed amp supplies 281 7022 6856 4218 14687 Appreciation 2746 10566 11658 24903 12861
TOTAL FARM RECEIPTS TOTAL FARM REe EXCL
$218715 $309311 $423225 APPR$215969 $298745 $411567
$609099 $1001277 $584196 $988416
ExpensesHired labor Dairy grain amp concentrate Other feed Machine hire Machinery repairAuto expense (farm share)Gas amp oil Replacement animals Breeding fees Veterinary amp medicine Milk marke ting Cattle lease Other livestock expenseFertilizer amp lime Seeds amp plantsSpray amp other crop expense Land bldg fence repairTaxes amp insurance E1ec amp phone (farm share) Interest paid Mise expenses (inc1 rent)
Total Cash Expenses Expansion livestock Machinery depreciationBuilding depreciationUnpaid family labor Interest on equity 5
$ 16688 $ 27852 $ 46503 49523 61297 78388
1616 3305 3705 1049 1539 2704
10347 14395 20231 608 307 534
7220 10651 13739 1045 1673 4834 2715 3811 5028 3776 5339 6729
15285 19404 26629 150 104 0
8091 9643 15299 9363 13360 21445 3122 4101 7169 2126 4726 7328 2697 3860 3746 7346 10300 13188 5464 6851 8877
19120 27319 39003 5312 8375 10210
$172663 $238212 $335289 1040 729 3596
16720 21513 29514 7497 10826 11453 1698 1348 760
16884 22692 29569
$ 77411 115416
4065 3679
27963 696
19720 1189 8061
12980 39971
o 17745 26273 9889 6131 6384
16264 11927 50300 20000
$476064 7173
32577 22077
938 38653
$117236 201481 10626
4676 38467
329 24792 1354
12013 20847 52277
732 32245 32100 12436 15530
9185 18689 15604 87833 23600
$732052 20888 48605 31860
1433 59533 -TOTAL FARM EXPENSES $216502 $295320 $410181 $577482 $894371
Financial SummaryNET CASH FARM INCOME
Labor amp Management Income Number of Operators
LABOR amp MGT INCOMEOPERLABORMGT amp OWNSHP INCIOP
$37761 $-533 137
$-389 $13939
$50540 $3425
141 $2429
$26016
$61888 $1386
1 52 $912
$28035
$99443 $6714
144 $4663
$48799
$189734 $94045
180 $52247 $92466
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
24
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
Less Than 40 to 55 to 70 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows
Number of farms 45 100 94 64
Size of Business Number of cows 33 47 61 77 Number of heifers 27 38 52 67 Pounds of milk sold 443000 664700 919900 1159400 Worker equivalent 1 75 208 250 292 Total work units 366 526 694 870 Total tillable acres 112 164 213 271 (Tillable acres rented) (26) (50) (71) (80)
Rates of Production Milk sold per cow 13424 14143 15080 15057 Tons hay crop dry matter per acre 22 23 24 27 Tons corn silage per acre 129 130 128 129 Bushels of oats per acre 398 517 568 495
Labor Efficiency Cows per worker 19 23 24 26 Pounds milk sold per worker 253143 319567 367960 397055 Work units per worker 209 253 278 298
Feed Costs Feed purchased per cow $515 $495 $493 $477 Crop expense per cow $113 $114 $158 $164 Feed cost per cwt milk $384 $350 $327 $316 Feed amp crop expo per cwt milk $505 $452 $456 $438 feed is of milk receipts 29 26 24 24 Tons forage dry matter per cow 76 77 78 80 Tillable acres per cow 34 35 35 35 Fertilizer amp lime per crop acre $21 $21 $30 $30
Machinery amp Labor Costs Total machinery costs $14820 $18829 $27749 $35813 Machinery cost per cow $449 $401 $455 $465 Machinery cost per cwt milk $335 $283 $302 $309 Labor cost per cow $425 $376 $364 $358 Labor cost per cwt milk $317 $266 $242 $238
Capital Efficiency Investment per worker $121378 $131148 $151046 $156783 Investment per cow $6247 $5683 $6190 $5795 Investment per cwt milk $48 $41 $41 $39 Land amp buildings per cow $3558 $2962 $3176 $2852 Machinery investment per cow $1188 $1125 $1257 $1240 Capital turnover 30 26 25 25
Other Price per cwt milk sold $1322 $1345 $1338 $1337 Acres hay crops 77 104 125 140 Acres corn si1age 17 28 41 53
Average of all farms
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
25
SELECTED BUSINESS FACTORS BY HERD SIZE 458 New York Dairy Farms 1984
85 to 100 to 150 to 200 to 250 or Item Farms with 99 Cows 149 Cows 199 Cows 249 Cows More Cows
Number of farms 43 56 25 16
Size of Business Number of cows 91 124 170 229 Number of heifers 83 III 134 200 Pounds of milk sold 1399400 1878500 2553000 3692600 Worker equivalent 308 392 467 617 Total work units 1030 1398 1907 2541 Total tillable acres 290 383 549 622 (Tillable acres rented) (101) (136) (220) (222)
Rates of Production Milk sold per cow 15378 15149 15018 16125 Tons hay crop dry matteracre 27 29 30 33 Tons corn silage per acre 134 138 144 154 Bushels of oats per acre 530 458 501 571
Labor Efficiency Cows per worker 30 32 36 37 Pounds milk soldworker 454351 479209 546681 598476 Work units per worker 334 357 408 412
Feed Costs Feed purchased per cow $544 $494 $461 $504 Crop expense p~r cow $161 $179 $211 $185 Feed cost per cwt milk $354 $326 $307 $313 Feed amp crop expcwt milk $470 $462 $462 $438 feed is of milk receipts 26 24 23 23 Tons forage dry mattercow 81 80 87 85 Tillable acres per cow 32 31 32 27 Fertilizer amp limecrop acre $32 $35 $39 $42
Machinery amp Labor Costs Total machinery costs $41499 $54991 $75651 $94090 Machinery cost per cow $456 $443 $445 $411 Machinery cost per cwt milk $297 $293 $296 $255 Labor cost per cow $337 $338 $360 $399 Labor cost per cwt milk $219 $223 $239 $247
Capital Efficiency Investment per worker $168777 $181169 $193557 $195094 Investment per cow $5590 $5636 $5165 $5144 Investment per cwt milk $37 $38 $35 $33 Land ampbuildings per cow $2603 $2762 $2377 $2483 Machinery investment per cow $1203 $1067 $1047 $816 Capital turnover 24 23 21 20
Other Price per cwt milk sold $1355 $1364 $1346 $1370 Acres hay crops 154 176 258 237 Acres corn si1age 71 102 144 235
Average of all farms
15
359 285
6247600 858
3801 790
(260)
17403 40
163 800
42 728159
443
$561 $167
$322 $436
24 80 22 $41
$129309 $360
$207 $375
$215
$209738 $4699
$29 $2298
$678 18
$13 42 245 326
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
26
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Less Than 40 to 55 to 70 to 85 to Item Farms with 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 45 100 94 64 43
Assets Livestock (includes $ 39803 $ 59013 $ 81180 $100161 $124747 discounted lease payments)
Feed amp supplies (0)
11239 (22)
17653 (0)
26056 (25)
34432 (0)
41199 Machinery amp equip (includes 40617 55212 77650 98722 112637
discounted lease payments) Land amp buildings (includes
(215) 121757
(1228) 144453
(981) 194790
(771) 227936
(799) 246366
discounted lease payments) (608) (2293) (1080) (2649) (4316) Co-op investment 950 2842 3971 4747 7902 Accounts receivable 5903 8170 11281 14229 17314 Cash amp checking accounts 1084 1664 2028 3492 2463
Total Farm Assets $221171 $289007 $396956 $483719 $552628 Savings accounts 2892 3025 2751 4773 3694 Cash value life insurance 2071 2119 3115 2670 1908 Stocks amp bonds 990 2082 2195 3755 2155 Nonfarm real estate 3853 2905 8897 5656 3616 Auto (personal share) 1464 1903 2005 1806 1979 All other 7871 9212 6298 6887 5231
Total Nonfarm Assets $ 19141 $ 21246 $ 25261 $ 25547 $ 18583 TOTAL ASSETS $240312 $310253 $422217 $509266 $571211
Liabilities Long-term $ 48126 $ 61437 $ 80274 $ 97144 $130575 Intermediate 20644 35075 54202 59859 68539 Financial lease 823 3543 2061 3445 5115 Short-term 500 2191 2547 2059 5511 Other farm accounts 2414 3526 4311 5789 5209
Total Farm Liabilities $ 72507 $105772 $143395 $168296 $214949 Total Nonfarm Liabilities 190 830 856 1816 570 TOTAL LIABILITIES $ 72697 $106602 $144251 $170112 $215519 Farm Net Worth (Eq Cap) $148664 $183235 $253561 $315423 $337679 FAMILY NET WORTH $167615 $203651 $277966 $339154 $355692
Financial Measures Percent equity 70 66 66 67 62 Farm debt per cow $2133 $2204 $2351 $2130 $2311 Available for debt service
amp living $22264 $33907 $43287 $50678 $57557 Scheduled annual debt pymt $13695 $21704 $29930 $35772 $45664 Scheduled debt pymtscow $398 $447 $486 $450 $487 Payment as of milk check 23 24 24 23 24 DebtAsset ratio - long-term 040 043 041 043 053 DebtAsset ratio
amp short-term - intermediate
022 028 029 026 026 Cash flow coverage ratio 057 078 078 081 075
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
27
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 458 New York Dairy Farms January I 1985
Item Farms with 100 to
149 Cows 150 to
199 Cows 200 to
249 Cows 250 or
More Cows
Number of farms 56 25 16 15
Assets Livestock (includes
discounted lease payments) Feed amp supplies Machinery amp equip (includes
discounted lease payments) Land amp buildings (includes discounted lease payments)
Co-op investment Accounts receivable Cash amp checking accounts
Total Farm Assets Savings accounts Cash value life insurance Stocks amp bonds Nonfarm real estate Auto (personal share) All other
$166776 (0)
60934 135106
(703) 348754
(684) 14180 23033 5401
$754184 3921 3560 5664 7632 1817 8148
$ 223343 (0)
81393 184455 (1250) 415970
(0) 28568 31420 4236
$ 969385 8721 6789 8108
13880 3173 7340
$ 317 993 (0)
113736 196961 (6015) 581058
(0) 32536 50181 9H1
$1301582 3796 3796 2455
0 1063 1019
$ 470722 (0)
189321 260222
(694) 879980
(0) 41442 76619
6807 $1925113
9126 9126 4079 6867
667 4411
Total Nonfarm Assets TOTAL ASSETS
$ 30742 $784926
$ 48000 $1017385
$ 16029 $ 27500 $1317611 $19523613
Liabil1thli Long-term Intermediate Financial lease Short-term Other farm accounts
Total Farm Liabilities Total Nonfarm Liabilities TOTAL LIABILITIES Farm Net Worth (Eq Cap ) FAMILY NET WORTH
$164375 116134
1387 7550
10893 $300339
742 $301081 $453845 $483845
$218110 135883
1250 10275 12494
$378012 l51B
$379590 $591373 $637795
$272541 228449
6015 5801
15108 $528514
250 $528764 $773068 $788847
$399185 298210
694 13752 22605
$734446 400
$734846 $1190667 $1217767
Financial H~Asures Percent equity Farm debt per cow Available for debt service
amp living Scheduled annual debt pymt Scheduled debt pymtscow Payment as of milk check DebtAsset ratio - long-term DebtAsset ratio - intermediate
amp short-term Cash flow coverage ratio
62 $2384
$79761 $67136
$531 26
047
031 078
63 $2160
$103180 $92504
$526 27
052
027 076
60 $2259
$150134 $118968
$508 34
047
033 094
62 $1918
$277674 $186887
$488 22
045
030 118
-
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986
28
MEASURE YOUR PERFORMANCE
After you have entered your farm business data on the pages of this workbook categorize your farm business performance into three groups List the strong points those which indicate average performance and those areas which need improvement Your business factors that exceed the regional average should be listed as strong points factors that are close to the regional average should be identified as averaampe and factors that are below average should be listed under need improvement
The Farm Business Chart on page 20 and the Financial Analysis Chart on page 21 can be used to identify strengths and weaknesses by comparing your business with a large number of New York dairy farms summarized for the previous year It is recommended that you use more than one standard for comparison when analyzing the farm business
STRONG POINTS AVERAGE
NEED IMPROVEMENT
After identifying opportunities for improvement consider alternative ways of solving each problem List each alternative and analyze the consequences in detail Cooperative Extension conducts many schools meetings and provides many printed materials that should be of assistance Local agribusinesses often provide helpful information and assistance Seek out information related to the problem under consideration
Another way to measure your management performance is to compare your current business factors with those from previous years Page 19 is provided for this purpose Answering the following questions may also help evaluate your farm business progress
1 Do livestock number labor force and crop acres make up a well balanced unit of resources
2 Have rates of production shown a steady increase
3 When will milk output per worker reach 700000 pounds
4 Have some costs of production declined over the last two years
5 Is net farm income improving fast enough to meet your needs
6 Is growth in net worth keeping up with increased capital investment
7 Have you reached the business goals set for 1985 and have you set new goals for 1986