finbin benchmarking for success 2007 national extension risk management education conference...
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FINBINBenchmarking For Success
2007 National Extension Risk Management Education Conference
Phoenix, Arizona
Dale NordquistCenter for Farm Financial
Management
University of Minnesota
612-625-6760dnord@umn.edu
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Farm Financial Database
www.finbin.umn.edu
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Benchmark
A measurement or standard that serves as a point of reference by which process performance is measured.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Comprehensive Farm Financial Information System
FINPACK – Individual Farm Financial Analysis
RankEm – Benchmark Individual vs Group
RankEm Central – Group Summary Reports
FINBIN – Dynamic Web-Based Financial Reports
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
FINBIN Includes Data From:
• Minnesota
• North Dakota
• Nebraska
• Ohio
• Missouri
• Utah
• Wisconsin
• South Carolina
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
FINBIN Includes:
•3300 producers (70 organic)
•2.88 million acres of cropland
•65,000 dairy cows
•35,500 sows
•654,000 grow/finish pigs
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
FINBIN Is a Partnership With:
• MN Farm Bus Mgt 2200 farms 1996-pres
• SW MN Farm Mgt Assn 125 farms 1993-pres
• SE MN Farm Mgt Assn 50 farms1993-pres
• ND Farm Bus Mgt 550 farms 1993-pres
• Nebraska Farm Bus Assn 160 farms 1995-pres
• Ohio Extension 50 farms 1997-pres
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
FINBIN Is a Partnership With:
• Utah Farm Business Mgt 50 farms2004-pres
• Missouri Farm Bus Mgt 100 farms 2003-pres
• Wisc Farm Bus & Prod Mgt 50 farms2002-pres
• South Carolina Farm Mgt Assn 35 farms2005
• Total for 2005 analysis 3300 farms
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Data Security
• Whole farm reports -- minimum of 10 farms in each report
• Enterprise reports -- minimum of 5 farms in each report
• Benchmark reports – minimum of 30 farms in each report
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
5 Steps to Generating a FINBIN Report
• Select a report type/enterprise
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
5 Steps to Generating a FINBIN Report
• Select a report type/enterprise
• Select location– State
– Group
– Region
– Counties
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
5 Steps to Generating a FINBIN Report
• Select a report type/enterprise
• Select location
• Select column format– Any characteristic can be chosen as a
column format
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
5 Steps to Generating a FINBIN Report
• Select a report type/enterprise
• Select location
• Select column format
• Select characteristics– Years
– Type of farm
– etc
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
5 Steps to Generating a FINBIN Report
• Select a report type/enterprise
• Select location
• Select column format
• Select characteristics
• Run the report
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Whole Farm Reports
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
FINBIN Key Ratios2004 - 2006
<30 Yr Old Crop Farms
51-60 Yr Old Crop
Farms
LiquidityCurrent Ratio 1.25 1.50
Working Cap to Gross 13.2 % 20.7 %
Solvency Debt to Asset Ratio 64 % 46 %
ProfitabilityROA 9.5 % 7.5 %
ROE 16.1 % 9.0 %
RepaymentTerm Debt Coverage 180 % 175 %
Efficiency Asset Turnover Rate 64.6 % 46.2 %
FINBIN Key Ratios2004 - 2006
Beef Farms Sales
<$250,000
Beef Farms Sales
>$250,000
LiquidityCurrent Ratio 1.55 1.49
Working Cap to Gross 27.4 % 19.9%
Solvency Debt to Asset Ratio 41 % 49 %
ProfitabilityROA 1.7 % 8.1 %
ROE -1.3 % 10.8 %
RepaymentTerm Debt Coverage 146 % 194 %
Efficiency Asset Turnover Rate 18.5 % 38.2 %
FINBIN Key Ratios2004 - 2006
<50 Yr Old Dairy 200
+Cows
>50 Yr Old Dairy <
100 Cows
LiquidityCurrent Ratio 1.18 2.00
Working Cap to Gross 1.7 % 16.2 %
Solvency Debt to Asset Ratio 55 % 35 %
ProfitabilityROA 9.6 % 6.3%
ROE 14.6 % 6.5 %
RepaymentTerm Debt Coverage 162 % 154 %
Efficiency Asset Turnover Rate 52.7 % 36.4 %
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Crop Enterprise Reports
Corn, Cash Rented, 2006FINBIN Database, So MN
Cost of productionHigh Cost
20 % 20-40% 40-60% 60-80%Low Cost
20%
Yield 158 175 178 180 186
Gross return $476.05 $514.61 $518.48 $517.81 $536.57
Seed 51.96 55.95 54.62 52.99 53.41
Fertilizer 76.58 79.74 73.03 71.52 60.96
Chemicals 27.65 25.79 24.31 22.62 19.92
Rent 113.76 120.11 119.06 111.73 109.41
Total direct cost 388.67 386.83 362.01 340.58 314.36
Total costs 472.36 449.41 420.83 395.43 361.66
Net return to operator lbr & mgt 36.92 98.24 128.61 153.84 205.30
Cost of production 2.95 2.54 2.34 2.16 1.92
Corn, Cash Rented, 2006FINBIN Database, So MN
Cost of productionHigh Cost
20 % 20-40% 40-60% 60-80%Low Cost
20%
Yield 158 175 178 180 186
Gross return $476.05 $514.61 $518.48 $517.81 $536.57
Seed 51.96 55.95 54.62 52.99 53.41
Fertilizer 76.58 79.74 73.03 71.52 60.96
Chemicals 27.65 25.79 24.31 22.62 19.92
Rent 113.76 120.11 119.06 111.73 109.41
Total direct cost 388.67 386.83 362.01 340.58 314.36
Total costs 472.36 449.41 420.83 395.43 361.66
Net return to operator lbr & mgt 36.92 98.24 128.61 153.84 205.30
Cost of production 2.95 2.54 2.34 2.16 1.92
Corn, Cash Rented, 2006FINBIN Database, So MN
Cost of productionHigh Cost
20 % 20-40% 40-60% 60-80%Low Cost
20%
Yield 158 175 178 180 186
Gross return $476.05 $514.61 $518.48 $517.81 $536.57
Seed 51.96 55.95 54.62 52.99 53.41
Fertilizer 76.58 79.74 73.03 71.52 60.96
Chemicals 27.65 25.79 24.31 22.62 19.92
Rent 113.76 120.11 119.06 111.73 109.41
Total direct cost 388.67 386.83 362.01 340.58 314.36
Total costs 472.36 449.41 420.83 395.43 361.66
Net return to operator lbr & mgt 36.92 98.24 128.61 153.84 205.30
Cost of production 2.95 2.54 2.34 2.16 1.92
Corn, Cash Rented, 2006FINBIN Database, So MN
Cost of productionHigh Cost
20 % 20-40% 40-60% 60-80%Low Cost
20%
Yield 158 175 178 180 186
Gross return $476.05 $514.61 $518.48 $517.81 $536.57
Seed 51.96 55.95 54.62 52.99 53.41
Fertilizer 76.58 79.74 73.03 71.52 60.96
Chemicals 27.65 25.79 24.31 22.62 19.92
Rent 113.76 120.11 119.06 111.73 109.41
Total direct cost 388.67 386.83 362.01 340.58 314.36
Total costs 472.36 449.41 420.83 395.43 361.66
Net return to operator lbr & mgt 36.92 98.24 128.61 153.84 205.30
Cost of production 2.95 2.54 2.34 2.16 1.92
Corn, Cash Rented, 2006FINBIN Database, So MN
Cost of productionHigh Cost
20 % 20-40% 40-60% 60-80%Low Cost
20%
Yield 158 175 178 180 186
Gross return $476.05 $514.61 $518.48 $517.81 $536.57
Seed 51.96 55.95 54.62 52.99 53.41
Fertilizer 76.58 79.74 73.03 71.52 60.96
Chemicals 27.65 25.79 24.31 22.62 19.92
Rent 113.76 120.11 119.06 111.73 109.41
Total direct cost 388.67 386.83 362.01 340.58 314.36
Total costs 472.36 449.41 420.83 395.43 361.66
Net return to operator lbr & mgt 36.92 98.24 128.61 153.84 205.30
Cost of production 2.95 2.54 2.34 2.16 1.92
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Corn, Bt vs Conventional Cash Rented, 2003-2006, FINBIN Database, So MN
100% Bt No Bt
Yield 177.5 166.3
Seed 49.91 41.37
Chemicals 24.09 29.13
Drying fuel 13.20 14.14
Total cost 382.00 368.89
Cost of production 2.09 2.54
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Corn, Cash RentedFINBIN Database, All MN
2001 2002 2003 2004 2005 2006 % Diff. 05 vs
01
Seed 36.86 37.08 41.03 43.33 48.49 52.95 44
Fertilizer 49.64 44.60 48.79 56.23 63.66 71.42 44
Chemicals 26.16 26.24 26.54 26.16 24.10 22.32 -15
Fuel & drying
20.08 22.19 17.76 35.38 32.48 32.80 63
Rent 90.05 91.10 93.46 95.38 100.47
103.08
14
Other 97.99 97.21 98.82 100.98
107.85
115.20
18
Total cost 320.78
318.42
322.40
357.43
377.02
397.77
24
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Quiz Time!
What is the single most important factor in determining your cost of production? A. Land costB. Family livingC. YieldD. Government paymentsE. Color of your equipment
Soybeans, Cash Rented, 2006
FINBIN Database, So MNCost of Production
High Cost 20% 20-40% 40-60% 60-80%
Low Cost 20%
Yield 46.7 51.8 52.7 53.9 55.7
Gross return 287.96 320.69 325.61 325.39 337.59
Seed 31.07 30.46 29.20 29.03 28.68
Repairs 23.97 19.69 19.98 17.78 15.58
Chemicals 21.05 20.95 17.66 19.51 17.35
Rent 118.39 120.49 116.47 110.40 100.67
Machinery cost 86.51 71.75 68.44 59.83 53.57
Total direct cost 256.47 250.98 233.62 222.52 199.76
Total costs 320.86 303.95 280.99 264.35 236.32
Net return to operator lbr & mgt -3.01 45.36 73.04 88.71 130.97
Cost of production 6.78 5.76 5.15 4.78 4.04
Soybeans, Roundup vs Conventional
Cash Rented, 2003-2006, FINBIN Database, So MN100% RR No RR
Yield 46.72 45.07
Price 5.92 5.89
Gross return $287.37 $277.74
Seed 27.88 16.71
Chemicals 19.10 26.56
Total direct cost 218.37 212.06
Total costs 264.00 251.54
Net return to operator lbr & mgt 52.11 48.99
Cost of production 5.32 5.38
Soybeans, Conventional vs. Organic
Owned & Cash Rented, 2006, FINBIN Database, MNConventional Organic
Yield 45.69 14.05
Price 6.03 14.57
Gross return $281.78 $256.40
Seed 30.64 31.86
Chemicals 18.39 --
Total direct cost 181.79 197.34
Total costs 239.61 260.19
Net return to operator lbr & mgt 41.68 -3.78
Cost of production 5.09 15.50
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Livestock Enterprise Reports
Dairy, 2006FINBIN Database, MN
No. of Cows 1-50 51-100 101-200 201-500 >500
Milk per cow 17417 19320 20522 23432 23974
Avg. milk price per cwt. 13.22 13.04 13.26 13.41 13.66
Gross return 2,319 2,546 2,729 3,131 3,095
Feed cost 1,039 1,082 1,124 1,215 1,198
Breeding, vet, supplies 250 242 245 308 288
BST 8 11 20 37 76
Hired labor 59 109 235 409 460
Depreciation and Interest 199 218 270 244 231
Total costs 2,090 2,183 2,424 2,788 2,857
Net return to operator lbr & mgt 229 363 305 343 239
Cost of production 13.82 12.49 12.75 12.71 13.22
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Dairy, 2006FINBIN Database, MN
Production System Conventional Organic
Milk per cow 21,647 12,323
Avg. milk price per cwt. 13.23 22.15
Gross return 2,830 2,802
Feed cost 1,150 942
Breeding, vet, supplies 286 174
BST 33 --
Hired labor 282 236
Depreciation and Interest 239 181
Total costs 2,533 1,980
Net return to operator lbr & mgt 297 822
Cost of production 12.79 17.47
Copyright © 2006 Center for Farm Financial Management, University of Minnesota. All Rights Reserved.
Farm Financial Database
www.finbin.umn.edu
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