2007 Michigan Cash Grain Farm Business Analysis Summary. Eric Wittenberg And Stephen Harsh. Staff Paper December, 2008

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1 2007 Michigan Cash Grain Farm Business Analysis Summary Eric Wittenberg And Stephen Harsh Staff Paper December, 2008 Department of Agricultural, Food, and Resource Economics MICHIGAN STATE UNIVERSITY East Lansing, Michigan MSU is an Affirmative Action/Equal Opportunity Institution

2 2007 Michigan Cash Grain Farm Business Analysis Summary 2007 Michigan TelFarm and Farm Credit Services Data Staff Paper No by Eric Wittenberg and Stephen Harsh Copyright 2008 by Eric Wittenberg and Stephen Harsh. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. 2

3 2007 Michigan Cash Grain Farm Business Analysis Summary by Eric Wittenberg and Stephen Harsh 1 Table of Contents Page Executive Summary 5 List of Tables Summary Tables 1) Average MI Farm Characteristics.. 5 2) Average MI Farm Income Statement 6 3) Average MI Profitability Indicators. 7 4) Average Characteristics by Farm Size. 7 5) Average Income and Expenses by Farm Size. 7 6) Average Profitability Indicators by Farm Size (Cost). 8 7) Average Profitability Indicators by Farm Size (Market). 8 A) Averages of 77 Cash Grain Farms, All Sizes 8) Crop Production Summary 9 9) Farm Income Statement ) Inventory Changes ) Depreciation and Other Capital Adjustments ) Profitability Measures ) Liquidity Measures ) Balance Sheet at Cost Values ) Balance sheet at Market Values ) Statement of Cash Flows ) Financial Standards Measures ) Operator and Labor Information ) Financial Summary. 21 B) Average of 43 Cash Grain Farms, 50 to 799 Acres. 22 Similar tables as previous summary, Tables 20 to 31 1 Co-workers in the TelFarm project were: R. Betz, L. Borton, B. Battel, W. Schauer, D. Stein, and V. Varner with the assistance of Michigan State University Extension Agents. Farm Credit Services of Michigan co-workers were Kelly Tobin, Steve Eshelman, Janice Raymond, Tiffany Aldrich, Anne Gerke, Kathleen Spranger, Sonya Pentecost, and Lynette Wood. Farm Credit Services of Wisconsin co-worker was Steve Zimmerman. 3

4 C) Average of 12 Cash Grain Farms, 800 to 1199 Acres. 35 Similar tables as previous summary, Tables 32 to 43 D) Average of 22 Cash Grain Farms, 1200 Acres plus. 48 Similar tables as previous summary, Tables 44 to 55 4

5 Executive Summary This report summarizes the 2007 financial and production records of 77 Michigan cash grain farms. To be included, the farms must have produced at least 50 percent of gross cash farm income from one or a combination of these items: corn, soybeans, wheat, navy beans, oats, sugar beets and other small grains. The records came from Michigan State University s TelFarm project and Farm Credit Service of Michigan. The values were pooled into averages for reporting purposes. Farm records were included if a farm financial analysis had completed 2007 data including beginning and ending balance sheets and a statement of income and expenses. The data was checked to verify that cash discrepancy was less than 10% of gross cash inflow and that debt discrepancy was less than $1,000. While considerable variation in the data exists, average values are reported in the summary tables below. Summary of Results Average size of farms measured in acres is presented in Table 1. However, there is considerable range and variability around this average. Table 1. Average Michigan Cash Grain Farm Characteristics, Total acres owned Total crop acres Number of farms Net farm income is the profit (loss) remaining after all farm expenses and inventory changes have been recognized. The net farm income value is the return to unpaid operator management, labor and equity capital invested, as illustrated in Table 2. Net farm income in 2007 averaged $114,875; and the median was $56,281, with a standard deviation of $226,262. This average somewhat obscures a very large range of net farm income values. As illustrated in the second page of Table 9, the farms in the top 25 percent of the net farm income distribution averaged $233,192 while those in the bottom 25 percent averaged a negative $22,924. The total difference across the averages of the top versus the bottom groups of farms is $256,116. Gross cash farm income averaged $567,604 in 2007 (Table 2). The two largest components of these revenues were corn and soybeans sales, which averaged $160,315 and $123,933, respectively. Government payments averaged $20,076 per farm in

6 Average total cash expenses were $478,442 in 2007 and average net cash farm income was $89,162. The net inventory changes in 2007 were $75,614 because of changes in prepaid expenses & supplies and crops & feed inventories, farms were building inventories. Depreciation and capital adjustments averaged $49,902. Table 2. Average Michigan Cash Grain Farm Income Statement, ($) ($) ($) ($) ($) Gross cash farm income 365, , , , ,604 - Total cash expense 320, , , , ,442 = Net cash farm income 45,464 69,176 73,063 74,807 89,162 + Inventory change* 9,635 11,042 31,182 53,116 75,614 + Depreciation + capital adjustments* -42,311-50,693-46,936-50,898-49,902 = Net farm income 12,788 29,524 57,310 77, ,875 * Changes calculated as ending values minus beginning value Four key financial performance indicators are presented in Table 3. The rate of return on assets (ROA) is calculated as if the farm has no debt. ROA indicates the farm earnings, after subtracting out an allowance for unpaid operator labor and management. ROA provides the key summary performance indicator for your farm. By multiplying the operating profit margin by the asset turnover rate, the ROA is determined. The average ROA was 9.0 percent; an improvement over the last five years (Table 3). The rate of return on equity (ROE) represents the farm earnings after interest payments which covers the cost of borrowed funds. In 2007, ROE was higher than the ROA, 9.9 and 9.0 respectively, indicating that profits were being made on borrowed money. Table 3 reveals that for the last three years ROE is greater then ROA. Operating profit margin (OPM) measures the dollars of profit generated per dollar of revenue. In 2007, Michigan cash grain farms generated 31.7 cents of profit per dollar of revenue. Asset turnover ratio (ATO) measures the efficiency with which farm assets generate revenue. In 2007, this ratio was 28.3 percent. Table 3 indicates that the first three profitability ratios were above the four previous years and the ATO has remained fairly constant over the last four years. 6

7 Table 3. Average Michigan Cash Grain Farm Profitability Indicators, (%) (%) (%) (%) (%) Rate of return on assets* Rate of return on equity Operating profit margin Asset turnover rate* * Assets valued at market value (rather than cost value). Results by Farm Size To further facilitate financial comparisons and benchmarking, the financial summaries were categorized by cropped acres, Table 4. The smallest size category, 50 to 799 cropped acres, includes 43 farms. The medium size category, 800 to 1199 cropped acres, includes 12 farms. The largest size category, 1200 plus cropped acres, contains the remaining 22 farms. Table 4. Average 2007 Michigan Cash Grain Farm Characteristics by Farm Size Category Acres Acres Acres Total acres owned Total crop acres ,115 Number of farms Table 5 presents the average farm income statement by farm acreage size. The smallest farms returned $28,879; the medium farms $74,674; and the largest farms $304,886. Table 5. Average 2007 Michigan Cash Grain Farm Income Statement by Size Acres Acres Acres ($) ($) ($) Gross cash farm income 194, ,432 1,223,370 - Total cash expense 163, ,161 1,040,411 = Net cash farm income 30, , ,959 + Inventory change* 23,809 20, ,730 + Depreciation and capital adjustments* -25,469-73,465-84,804 = Net farm income 28,879 74, ,886 * Changes calculated as ending values minus beginning value 7

8 Table 6 compares profitability measures across farm sizes with assets valued at cost. The larger-sized farms ( acres) had the most positive financial profitability indicators: the highest ROA, ROE, OPM, and ATO; at 17.1 percent, 32.6 percent, 23.9 percent and 74.1 percent, respectively. Table 6. Average 2007 Michigan Cash Grain Farm Profitability Indicators by Size Acres Acres Acres (Percent) Rate of return on assets* Rate of return on equity Operating profit margin Asset turnover rate* * Assets valued at cost value (rather than market). Table 7 compares profitability measures across farm sizes with assets valued at market. The market value approach includes the impact of price appreciation (inflation) of the asset base (land primarily) as a form of income. Financial performance indicators like ROA can be looked upon in this comparison as the opportunity cost of farming versus alternative investments. Market value for assets is more appropriate when comparing across different farms (while cost is more appropriate to compare the same farm across time). Again, the larger-sized farms had the highest ROA, ROE, and ATO in The smallest-sized farms realized the highest average OPM. Table 7. Average 2007 Michigan Cash Grain Farm Profitability Indicators by Size Acres Acres Acres (Percent) Rate of return on assets* Rate of return on equity Operating profit margin Asset turnover rate* *Assets valued at market value (rather than cost). The details in deriving these profitability measures are provided in the following pages. The data for the smallest sized farms starts in Section B, page 22, Tables 20 to 31. The data for the mid-sized farms starts in section C, page 35, Tables 32 to 43. The data for the largest size category of farms starts in section D, page 48, Tables 44 to 55. 8

9 A) Average of 77 Cash Grain Farms, All Farms Table 8 Crop Production and Marketing Summary 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Acreage Summary Total acres owned Total crop acres ,158 Crop acres owned Crop acres cash rented Crop acres share rented Total pasture acres Average Price Received (Cash Sales Only) Corn per bushel Soybeans per bushel Wheat, Winter per bushel Straw per ton Hay, Mixed per ton

10 Table 9 Farm Income Statement 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Cash Farm Income Beans, Green 1, Beans, Navy 3,567 3,058 6,006 Cordwood Corn 160, , ,787 Corn Silage 2,618 2,368 - Corn, Seed 30,787-20,261 Hay, Alfalfa 1,326 1,740 1,695 Hay, Mixed 2, Haylage, Mixed 2,752-1,386 Oats Potatoes 15,886 43,797 19,553 Rye Soybeans 123,933 57, ,588 Straw 2, Sugar Beets 9,406-31,025 Watermelon 450-1,733 Wheat, Winter 28,832 22,133 26,066 Wheat, Seed Miscellaneous crop income Beef Bulls 1, Beef Cow-Calf, Beef Calves 1,838 1, Beef, Custom Fed Beef, Background Beef Beef, Finish Beef Calves 17, ,890 Beef, Finish Yrlg Steers 20,270-74,695 Hogs, Farrow-Fin, Raised Hogs 2,847-9,747 Hogs, Finish Feeder Pigs 5, Sheep, Market Lambs, Mkt Lambs 3,741 1,021 1,133 Beef, Finish Cull Cows Hogs, Weaning to Finish 1, Cull breeding livestock Misc. livestock income 2,072 8, Direct & CC govt payments 6,669 5,018 11,587 Other government payments 13,407 5,501 12,956 Custom work income 48,634 27,677 68,076 Patronage dividends, cash 1, Insurance income 7,226 1,888 5,556 Contract livestock income Other farm income 26,209 13,730 13,401 Gross Cash Farm Income 567, , ,264 10

11 Table 9 Farm Income Statement (Continued) 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Cash Farm Expense Seed 39,503 19,421 52,898 Fertilizer 78,360 55,742 83,503 Crop chemicals 30,537 16,623 38,026 Crop insurance 5,612 1,702 7,730 Drying fuel 2, Irrigation energy 1,197-1,521 Crop packaging and supplies Crop supplies 285 1,155 - Crop custom hire Crop utilities Crop hauling and trucking 1,533 4, Crop marketing 1,668 3,221 1,735 Crop miscellaneous 2, ,451 Feeder livestock purchase 26,264 6,687 46,590 Purchased feed 11,554 2,053 14,743 Breeding fees Veterinary 1,561 1, Livestock supplies 2,173 4,564 2,103 Livestock machinery leases Livestock utilities Livestock hauling and trucking Livestock marketing Interest 29,135 20,952 29,847 Packaging and supplies ,828 Supplies 521 1, Fuel & oil 30,079 25,103 31,403 Repairs 32,680 23,057 34,927 Custom hire 16,573 4,770 16,514 Hired labor 29,640 29,432 29,285 Land rent 61,721 25,590 90,002 Machinery leases 6, ,281 Real estate taxes 8,612 7,255 6,698 Personal property taxes Farm insurance 16,538 8,717 16,853 Utilities 10,398 5,934 7,790 Hauling and trucking Dues & professional fees 5,034 3,276 4,901 Hedging account deposits Miscellaneous 22,088 3,955 34,128 Total cash expense 478, , ,876 Net cash farm income 89,162 49, ,388 Inventory Changes Crops and feed 49,176-31, ,843 Market livestock ,662 2,885 Accounts receivable 15,379 4,284 6,944 Prepaid expenses and supplies 15,795 3,885 26,013 Accounts payable -4,453-6,370-2,683 Total inventory change 75,614-31, ,002 Net operating profit 164,776 18, ,390 Depreciation and Other Capital Adjustments Breeding livestock ,981 1,800 Machinery and equipment -39,893-27,881-38,685 Buildings and improvements -7,880-1,355-9,562 Other farm capital -1,939-8, Total depr. and other capital adj -49,902-40,973-46,198 Net farm income 114,875-22, ,192 11

12 Table 10 Inventory Changes 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Net cash farm income 89,162 49, ,388 Crops and Feed Ending inventory 288,233 99, ,773 Beginning inventory 239, , ,930 Inventory change 49,176-31, ,843 Market Livestock Ending inventory 33,909 18,697 54,201 Beginning inventory 34,192 20,359 51,316 Inventory change ,662 2,885 Accts Receivable & Other Current Assets Ending inventory 41,764 17,460 30,824 Beginning inventory 26,385 13,175 23,880 Inventory change 15,379 4,284 6,944 Prepaid Expenses and Supplies Ending inventory 49,891 17,685 65,472 Beginning inventory 34,096 13,800 39,459 Inventory change 15,795 3,885 26,013 Accounts Payable & Accrued Expenses Beginning inventory 18,393 6,498 15,774 Ending inventory 22,846 12,868 18,457 Inventory change -4,453-6,370-2,683 Total inventory change 75,614-31, ,002 Net operating profit 164,776 18, ,390 12

13 Table 11 Depreciation and Other Capital Adjustments 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Net operating profit 164,776 18, ,390 Breeding Livestock Ending inventory 15,902 25,283 3,674 Capital sales Beginning inventory 15,580 27,823 1,747 Capital purchases Depreciation, capital adjust ,981 1,800 Machinery and Equipment Ending inventory 138, , ,208 Capital sales 6,253 7,449 2,490 Beginning inventory 122, ,580 95,880 Capital purchases 62,411 80,253 49,503 Depreciation, capital adjust. -39,893-27,881-38,685 Buildings and Improvements Ending inventory 59,992 48,863 67,289 Capital sales 2,297 8,782 - Beginning inventory 56,703 54,663 53,851 Capital purchases 13,466 4,336 23,000 Depreciation, capital adjust. -7,880-1,355-9,562 Other Capital Assets Ending inventory 18,619 11,239 11,944 Capital sales 9,670 11,134 3,001 Beginning inventory 20,100 12,791 12,643 Capital purchases 10,127 18,338 2,053 Depreciation, capital adjust. -1,939-8, Total depreciation, capital adj. -49,902-40,973-46,198 Net farm income 114,875-22, ,192 13

14 Table 12 Profitability Measures 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Profitability (assets valued at cost) Net farm income 114,875-22, ,192 Labor and management earnings 86,277-39, ,664 Rate of return on assets 11.3 % -5.0 % 23.0 % Rate of return on equity 17.0 % % 39.9 % Operating profit margin 18.2 % -9.7 % 30.1 % Asset turnover rate 62.0 % 51.9 % 76.5 % Interest on farm net worth 28,597 16,734 30,528 Farm interest expense 31,059 20,305 30,832 Value of operator lbr and mgmt. 37,969 25,374 34,086 Return on farm assets 107,965-27, ,938 Average farm assets 958, , ,312 Return on farm equity 76,906-48, ,106 Average farm equity 452, , ,555 Value of farm production 593, , ,403 All Farms Low 25% High 25% Number of farms Profitability (assets valued at market) Net farm income 194,920-11, ,555 Labor and management earnings 100,085-77, ,627 Rate of return on assets 9.0 % -1.2 % 19.8 % Rate of return on equity 9.9 % -3.4 % 24.8 % Operating profit margin 31.7 % -5.7 % 48.7 % Asset turnover rate 28.3 % 20.9 % 40.7 % Interest on farm net worth 94,835 65,739 82,928 Farm interest expense 31,059 20,305 30,832 Value of operator lbr and mgmt. 37,969 25,374 34,086 Return on farm assets 188,010-16, ,300 Average farm assets 2,097,596 1,382,378 1,878,670 Return on farm equity 156,951-36, ,469 Average farm equity 1,579,490 1,095,654 1,377,913 Value of farm production 593, , ,403 14

15 Table 13 Liquidity Measures 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Liquidity (cash) Net cash farm income 89,162 49, ,388 Net nonfarm income 25,133 45,701 22,080 Family living and taxes 48,448 40,935 61,999 Principal due on long term debt 19,439 11,640 17,234 Cash available for interm. debt 46,408 42,689 74,236 Average intermediate debt 119,911 64, ,524 Years to turnover interm. debt Expense as a % of income 84 % 85 % 81 % Interest as a % of income 5 % 6 % 4 % Working capital to gross income 43 % 32 % 52 % Liquidity (accrual) Total accrual farm income 631, , ,936 Total accrual operating expense 467, , ,546 Net accrual operating income 164,776 18, ,390 Net nonfarm income 25,133 45,701 22,080 Family living and taxes 48,448 40,935 61,999 Principal due on long term debt 19,439 11,640 17,234 Available for intermediate debt 122,022 11, ,237 Average intermediate debt 119,911 64, ,524 Years to turnover interm. debt Expense as a % of income 74 % 94 % 66 % Interest as a % of income 5 % 7 % 4 % Working capital to gross income 39 % 35 % 44 % 15

16 Table 14 Balance Sheet at Cost Values 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Beginning Ending Beginning Ending Beginning Ending Assets Current Farm Assets Cash and checking balance 33,734 37,439 7,728 31,894 32,003 35,109 Prepaid expenses & supplies 34,096 49,891 13,800 17,685 39,459 65,472 Growing crops 8,198 12,579 4,860 5,211 9,599 16,460 Accounts receivable 19,797 29,622 6,902 11,252 13,720 14,259 Hedging accounts -2, Crops held for sale or feed 239, , ,639 99, , ,773 Crops under government loan Market livestock held for sale 34,192 33,909 20,359 18,697 51,316 54,201 Other current assets , Total current farm assets 367, , , , , ,378 Intermediate Farm Assets Breeding livestock 15,580 15,902 27,823 25,283 1,747 3,674 Machinery and equipment 121, , , ,504 94, ,253 Titled vehicles 1, , Other intermediate assets 11,924 11,294 5,780 6,547 9,497 8,520 Total intermediate farm assets 149, , , , , ,403 Long Term Farm Assets Farm land 319, , , , , ,629 Buildings and improvements 56,703 59,992 54,663 48,863 53,851 67,289 Other long-term assets 8,176 7,325 7,010 4,692 3,145 3,424 Total long-term farm assets 384, , , , , ,342 Total Farm Assets 901,432 1,015, , , ,502 1,091,122 Total Nonfarm Assets 179, , , ,211 68,542 90,392 Total Assets 1,081,096 1,208, , , ,044 1,181,514 Liabilities Current Farm Liabilities Accrued interest 7,255 9,180 2,163 1,516 6,455 7,440 Accounts payable 11,138 13,666 4,335 11,351 9,319 11,017 Current notes 136, ,466 44,454 38, , ,550 Government crop loans Principal due on term debt 42,836 43,260 24,433 29,182 42,909 41,792 Total current farm liabilities 197, ,572 75,384 80, , ,799 Total intermediate farm liabs 93,983 95,872 51,408 51,106 75,726 74,505 Total long term farm liabilities 203, , , , , ,219 Total farm liabilities 495, , , , , ,524 Total nonfarm liabilities 16,628 15,064 5,324 4,802 10,755 8,270 Total liabilities 512, , , , , ,794 Net worth (farm and nonfarm) 568, , , , , ,720 Net worth change 108,126 36, ,422 Ratio Analysis Current farm liabilities / assets 54 % 46 % 40 % 43 % 49 % 34 % Curr. & interm farm liab. / assets 56 % 49 % 38 % 35 % 54 % 40 % Long term farm liab. / assets 53 % 54 % 68 % 86 % 56 % 58 % Total debt to asset ratio 47 % 44 % 39 % 40 % 52 % 44 % 16

17 Table 15 Balance Sheet at Market Values 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Beginning Ending Beginning Ending Beginning Ending Assets Current Farm Assets Cash and checking balance 33,734 37,439 7,728 31,894 32,003 35,109 Prepaid expenses & supplies 34,096 49,891 13,800 17,685 39,459 65,472 Growing crops 8,198 12,579 4,860 5,211 9,599 16,460 Accounts receivable 19,797 29,622 6,902 11,252 13,720 14,259 Hedging accounts -2, Crops held for sale or feed 239, , ,639 99, , ,773 Crops under government loan Market livestock held for sale 34,192 33,909 20,359 18,697 51,316 54,201 Other current assets , Total current farm assets 367, , , , , ,378 Intermediate Farm Assets Breeding livestock 15,960 16,203 27,823 25,639 2,718 5,282 Machinery and equipment 405, , , , , ,716 Titled vehicles 7,061 6,681 2,053 2,000 14,078 12,475 Other intermediate assets 12,675 11,852 5,780 6,547 12,389 10,666 Total intermediate farm assets 441, , , , , ,139 Long Term Farm Assets Farm land 1,045,117 1,115, , , , ,645 Buildings and improvements 138, , , , , ,076 Other long-term assets 7,865 6,937 7,010 4,692 3,145 3,424 Total long-term farm assets 1,191,413 1,269, , , ,749 1,044,145 Total Farm Assets 2,000,282 2,194,910 1,360,738 1,404,019 1,715,679 2,041,662 Total Nonfarm Assets 382, , , , , ,891 Total Assets 2,382,595 2,593,862 1,646,449 1,731,787 2,021,810 2,351,552 Liabilities Current Farm Liabilities Accrued interest 7,255 9,180 2,163 1,516 6,455 7,440 Accounts payable 11,138 13,666 4,335 11,351 9,319 11,017 Current notes 136, ,466 44,454 38, , ,550 Government crop loans Principal due on term debt 42,836 43,260 24,433 29,182 42,909 41,792 Total current farm liabilities 197, ,572 75,384 80, , ,799 Total intermediate farm liabs 93,983 95,872 51,408 51,106 75,726 74,505 Total long term farm liabilities 203, , , , , ,219 Total farm liabilities 495, , , , , ,524 Total nonfarm liabilities 16,628 15,064 5,324 4,802 10,755 8,270 Total liabs excluding deferreds 512, , , , , ,794 Total deferred liabilities 12,588 13, Total liabilities 524, , , , , ,794 Retained earnings 568, , , , , ,720 Market valuation equity 1,288,910 1,372, , ,480 1,045,766 1,170,038 Net worth (farm and nonfarm) 1,857,649 2,048,893 1,371,423 1,423,240 1,517,064 1,835,758 Net worth excluding deferreds 1,870,238 2,062,402 1,371,423 1,423,240 1,517,064 1,835,758 Net worth change 191,243 51, ,695 Ratio Analysis Current farm liabilities / assets 54 % 46 % 40 % 43 % 49 % 34 % Curr. & interm farm liab. / assets 36 % 33 % 25 % 23 % 34 % 27 % Long term farm liab. / assets 17 % 17 % 17 % 21 % 24 % 23 % Total debt to asset ratio 22 % 21 % 17 % 18 % 25 % 22 % Debt to assets excl deferreds 22 % 20 % 17 % 18 % 25 % 22 % 17

18 Table 16 Statement Of Cash Flows 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Beginning cash (farm & nonfarm) 37,213 9,950 32,303 Cash From Operating Activities Gross cash farm income 567, , ,264 Net nonfarm income 25,133 45,701 22,080 Total cash farm expense -478, , ,876 Apparent family living expense -45,127-36,846-56,478 Income and social security tax -3,321-4,089-5,522 Cash from operations 65,847 54,330 91,470 Cash From Investing Activities Sale of breeding livestock Sale of machinery & equipment 6,253 7,449 2,490 Sale of titled vehicles Sale of farm land 16,970 56,037 - Sale of farm buildings 2,297 8,782 - Sale of other farm assets 9,670 11,134 3,001 Sale of nonfarm assets Purchase of breeding livestock Purchase of machinery & equip. -62,411-80,253-49,503 Purchase of titled vehicles Purchase of farm land -14,913-7,739-15,835 Purchase of farm buildings -13,466-4,336-23,000 Purchase of other farm assets -10,127-18,338-2,053 Purchase of nonfarm assets -6, ,389 Cash from investing activities -72,249-27,707-97,416 Cash From Financing Activities Money borrowed 197,365 81, ,129 Cash gifts and inheritances 8,524 4, Principal payments -182,625-54, ,470 Dividends paid Gifts given -12,762-34,060 - Cash from financing activities 10,501-2,479 8,753 Net change in cash balance 4,099 24,144 2,806 Ending cash (farm & nonfarm) 41,313 34,094 35,109 18

19 Table 17 Financial Standards Measures 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Liquidity Current ratio Working capital 245, , ,579 Solvency (market) Farm debt to asset ratio 24 % 22 % 25 % Farm equity to asset ratio 76 % 78 % 75 % Farm debt to equity ratio 32 % 28 % 33 % Profitability (cost) Rate of return on farm assets 11.3 % -5.0 % 23.0 % Rate of return on farm equity 17.0 % % 39.9 % Operating profit margin 18.2 % -9.7 % 30.1 % Net farm income 114,875-22, ,192 Repayment Capacity Term debt coverage ratio 254 % 94 % 427 % Capital replacement margin 96,331-2, ,418 Efficiency Asset turnover rate (cost) 62.0 % 51.9 % 76.5 % Operating expense ratio 69.0 % 87.3 % 62.3 % Depreciation expense ratio 7.9 % 13.6 % 5.6 % Interest expense ratio 4.9 % 6.7 % 3.7 % Net farm income ratio 18.2 % -7.6 % 28.3 % 19

20 Table 18 Operator and Labor Information 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Operator Information Average number of operators Average age of operators Average number of years farming Results Per Operator Working capital 192,825 90, ,540 Total assets (market) 2,035,957 1,495,634 1,741,891 Total liabilities 427, , ,070 Net worth (market) 1,608,203 1,229,162 1,359,821 Net worth excl deferred liabs 1,618,807 1,229,162 1,359,821 Gross farm income 495, , ,323 Total farm expense 405, , ,588 Net farm income 90,167-19, ,735 Net nonfarm income 19,727 39,469 16,356 Family living & tax withdrawals 38,027 35,353 45,925 Total acres owned Total crop acres Crop acres owned Crop acres cash rented Crop acres share rented Total pasture acres Labor Analysis Number of farms Total unpaid labor hours 2,694 1,974 2,755 Total hired labor hours 1,469 1,663 1,167 Total labor hours per farm 4,164 3,637 3,922 Unpaid hours per operator 2,103 1,705 2,041 Value of farm production / hour Net farm income / unpaid hour Average hourly hired labor wage Partnerships & LLCs Number of farms Number of operators Owner withdrawals per farm Withdrawals per operator

21 Table 19 Financial Summary 2007 MI Cash Grain (All Farms) All Farms Low 25% High 25% Number of farms Income Statement Gross cash farm income 567, , ,264 Total cash farm expense 478, , ,876 Net cash farm income 89,162 49, ,388 Inventory change 75,614-31, ,002 Depreciation and capital adjust -49,902-40,973-46,198 Average net farm income 114,875-22, ,192 Median net farm income 56,281 5, ,917 Profitability (cost) Labor and management earnings 86,277-39, ,664 Rate of return on assets 11.3 % -5.0 % 23.0 % Rate of return on equity 17.0 % % 39.9 % Operating profit margin 18.2 % -9.7 % 30.1 % Asset turnover rate 62.0 % 51.9 % 76.5 % Profitability (market) Labor and management earnings 100,085-77, ,627 Rate of return on assets 9.0 % -1.2 % 19.8 % Rate of return on equity 9.9 % -3.4 % 24.8 % Operating profit margin 31.7 % -5.7 % 48.7 % Asset turnover rate 28.3 % 20.9 % 40.7 % Liquidity Ending current ratio Ending working capital 245, , ,579 End working capital to gross inc 43.3 % 31.9 % 52.4 % Term debt coverage ratio % 93.6 % % Expense as a percent of income 73.9 % 94.0 % 66.1 % Interest as a percent of income 4.9 % 6.7 % 3.7 % Solvency (cost) Number of farms Ending farm assets 1,015, ,096 1,091,122 Ending farm liabilities 516, , ,524 Ending total assets 1,208, ,307 1,181,514 Ending total liabilities 531, , ,794 Ending net worth 676, , ,720 Net worth change 108,126 36, ,422 Ending farm debt to asset ratio 51 % 53 % 47 % Beg total debt to asset ratio 47 % 39 % 52 % End total debt to asset ratio 44 % 40 % 44 % Solvency (market) Number of farms Ending farm assets 2,194,910 1,404,019 2,041,662 Ending farm liabilities 528, , ,524 Ending total assets 2,593,862 1,731,787 2,351,552 Ending total liabilities 544, , ,794 Ending net worth 2,048,893 1,423,240 1,835,758 Net worth change 191,243 51, ,695 Ending farm debt to asset ratio 24 % 22 % 25 % Beg total debt to asset ratio 22 % 17 % 25 % End total debt to asset ratio 21 % 18 % 22 % Nonfarm Information Net nonfarm income 25,133 45,701 22,080 Farms reporting living expenses Total family living expense 48, Total living, invest, & capital 52, Crop Acres Total acres owned Total crop acres ,158 Total crop acres owned Total crop acres cash rented Total crop acres share rented

22 B) Average 43 Cash Grain Farms, 50 to 799 Acres Table 20 Crop Production and Marketing Summary 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Acreage Summary Total acres owned Total crop acres Crop acres owned Crop acres cash rented Crop acres share rented Total pasture acres Average Price Received (Cash Sales Only) Corn per bushel Wheat, Winter per bushel Soybeans per bushel Straw per ton

23 Table 21 Farm Income Statement 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Cash Farm Income Beans, Green 1, Beans, Navy 4,315 5,282 2,821 Cordwood Corn 51,685 52,821 31,968 Corn Silage 3,989 4,091 11,410 Corn, Seed 1, Hay, Alfalfa 1,540 1,225 3,082 Hay, Mixed 3, Haylage, Mixed 4, Oats 1, ,485 Potatoes 1,038 4,058 - Rye Soybeans 38,186 25,677 43,733 Straw 3, Sugar Beets 7,295-19,079 Wheat, Winter 18,385 17,626 18,272 Oats, Seed Wheat, Seed 618-2,416 Miscellaneous crop income Beef Cow-Calf, Beef Calves 1, Beef, Custom Fed Beef, Background Beef Beef, Finish Beef Calves 3, ,440 Beef, Finish Yrlg Steers 1, Hogs, Finish Feeder Pigs 7, Sheep, Market Lambs, Mkt Lambs 1,954 1,763 2,060 Sheep, Market Lambs, Wool Beef, Finish Cull Cows Cull breeding livestock Misc. livestock income Direct & CC govt payments 3,674 3,952 4,946 Other government payments 3, ,749 Custom work income 4,244 2,459 4,691 Patronage dividends, cash Insurance income 1,276 2, Other farm income 10,069 10,303 1,455 Gross Cash Farm Income 194, , ,457 23

24 Table 21 Farm Income Statement (Continued) 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Cash Farm Expense Seed 13,264 11,823 11,150 Fertilizer 31,518 32,547 30,248 Crop chemicals 9,560 5,774 8,739 Crop insurance 1,410 1,058 1,553 Drying fuel Irrigation energy Crop custom hire Crop utilities Crop hauling and trucking Marketing Crop miscellaneous 3, ,295 Feeder livestock purchase 9,808 2,733 3,768 Purchased feed 7,190 2,502 3,044 Veterinary Livestock supplies Livestock hauling and trucking Interest 9,888 5,865 7,189 Packaging and supplies ,510 Supplies 445 1, Fuel & oil 11,113 11,764 10,161 Repairs 11,096 11,221 10,581 Custom hire 5,357 1,435 4,283 Hired labor 8,354 9,198 4,337 Land rent 13,113 10,117 11,029 Machinery leases 864 1, Real estate taxes 6,200 4,576 5,248 Personal property taxes Farm insurance 7,282 5,933 7,408 Utilities 4,425 2,581 2,490 Dues & professional fees 1,510 1,189 2,077 Hedging account deposits 591 1, Miscellaneous 4,231 3,637 2,349 Total cash expense 163, , ,582 Net cash farm income 30,538 23,187 25,875 Inventory Changes Crops and feed 15,976-17,801 25,128 Market livestock ,324 8,145 Accounts receivable 4,146 6,201-1,437 Prepaid expenses and supplies 4,839 4,669 7,269 Accounts payable Total inventory change 23,809-10,848 38,820 Net operating profit 54,347 12,339 64,695 Depreciation and Other Capital Adjustments Breeding livestock ,237 Machinery and equipment -19,579-20,428-15,354 Buildings and improvements -6,745-12,974-4,645 Other farm capital Total depr. and other capital adj -25,469-33,643-16,551 Net farm income 28,879-21,304 48,143 24

25 Table 22 Inventory Changes 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Net cash farm income 30,538 16,846 25,875 Crops and Feed Ending inventory 91,369 45,496 85,062 Beginning inventory 75,393 60,018 59,933 Inventory change 15,976-14,522 25,128 Market Livestock Ending inventory 14,915 13,190 9,255 Beginning inventory 15,394 16,847 1,109 Inventory change ,657 8,145 Accts Receivable & Other Current Assets Ending inventory 17,203 21,889 15,344 Beginning inventory 13,058 13,268 16,781 Inventory change 4,146 8,621-1,437 Prepaid Expenses and Supplies Ending inventory 15,421 8,963 14,453 Beginning inventory 10,582 3,827 7,184 Inventory change 4,839 5,136 7,269 Accounts Payable & Accrued Expenses Beginning inventory 7,062 5,786 8,773 Ending inventory 7,735 6,437 9,059 Inventory change Total inventory change 23,809-5,073 38,820 Net operating profit 54,347 11,773 64,695 25

26 Table 23 Depreciation and Other Capital Adjustments 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Net operating profit 54,347 11,773 64,695 Breeding Livestock Ending inventory 10,495 29,605 6,336 Capital sales Beginning inventory 9,623 29,926 2,868 Capital purchases Depreciation, capital adjust ,237 Machinery and Equipment Ending inventory 40,728 40,703 27,370 Capital sales 3, ,723 Beginning inventory 40,731 26,499 29,066 Capital purchases 22,946 32,780 16,381 Depreciation, capital adjust. -19,579-18,476-15,354 Buildings and Improvements Ending inventory 42,039 23,449 52,162 Capital sales Beginning inventory 40,149 29,446 49,758 Capital purchases 8,635 8,061 7,050 Depreciation, capital adjust. -6,745-14,058-4,645 Other Capital Assets Ending inventory 13,350 11,179 3,653 Capital sales 7,580 1,000 0 Beginning inventory 19,017 10,915 2,920 Capital purchases 1,785 1, Depreciation, capital adjust Total depreciation, capital adj. -25,469-32,799-16,551 Net farm income 28,879-21,026 48,143 26

27 Table 24 Profitability Measures 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Profitability (assets valued at cost) Net farm income 28,879-21,026 48,143 Labor and management earnings 11,806-35,232 30,816 Rate of return on assets 3.6 % % 8.0 % Rate of return on equity 2.3 % % 10.1 % Operating profit margin 8.1 % % 19.1 % Asset turnover rate 43.8 % 38.9 % 41.9 % Interest on farm net worth 17,072 14,206 17,328 Farm interest expense 9,694 4,176 7,501 Value of operator lbr and mgmt. 22,478 19,962 19,909 Return on farm assets 16,095-36,812 35,735 Average farm assets 451, , ,061 Return on farm equity 6,401-40,988 28,235 Average farm equity 272, , ,813 Value of farm production 197, , ,719 All Farms Low 25% High 25% Number of farms Profitability (assets valued at market) Net farm income 98,694-24, ,424 Labor and management earnings 33,880-69, ,660 Rate of return on assets 6.7 % -4.7 % 18.3 % Rate of return on equity 7.1 % -5.9 % 20.5 % Operating profit margin 43.4 % % % Asset turnover rate 15.5 % 15.4 % 15.5 % Interest on farm net worth 64,814 45,358 62,764 Farm interest expense 9,694 4,176 7,501 Value of operator lbr and mgmt. 22,478 19,962 19,909 Return on farm assets 85,910-40, ,016 Average farm assets 1,278, ,904 1,203,644 Return on farm equity 76,216-44, ,515 Average farm equity 1,078, ,966 1,038,395 Value of farm production 197, , ,719 27

28 Table 25 Liquidity Measures 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Liquidity (cash) Net cash farm income 30,538 16,846 25,875 Net nonfarm income 38,630 70,680 42,690 Family living and taxes 27,429 30,281 34,142 Principal due on long term debt 6,208 3,150 6,055 Cash available for interm. debt 35,531 54,095 28,368 Average intermediate debt 55,174 22,622 54,410 Years to turnover interm. debt Expense as a % of income 84 % 89 % 84 % Interest as a % of income 5 % 3 % 5 % Working capital to gross income 62 % 72 % 75 % Liquidity (accrual) Total accrual farm income 214, , ,294 Total accrual operating expense 159, , ,600 Net accrual operating income 54,347 11,773 64,695 Net nonfarm income 38,630 70,680 42,690 Family living and taxes 27,429 30,281 34,142 Principal due on long term debt 6,208 3,150 6,055 Available for intermediate debt 59,340 49,022 67,188 Average intermediate debt 55,174 22,622 54,410 Years to turnover interm. debt Expense as a % of income 75 % 92 % 66 % Interest as a % of income 5 % 3 % 4 % Working capital to gross income 56 % 77 % 62 % 28

29 Table 26 Balance Sheet at Cost Values 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Beginning Ending Beginning Ending Beginning Ending Assets Current Farm Assets Cash and checking balance 23,812 36,069 6,899 46,315 43,246 51,008 Prepaid expenses & supplies 10,582 15,421 3,827 8,963 7,184 14,453 Growing crops 5,850 8,942 2,660 4,145 4,757 8,621 Accounts receivable 6,303 7,514 10,000 17,186 11,003 6,723 Hedging accounts ,020 0 Crops held for sale or feed 75,393 91,369 60,018 45,496 59,933 85,062 Crops under government loan Market livestock held for sale 15,394 14,915 16,847 13,190 1,109 9,255 Other current assets Total current farm assets 138, , , , , ,121 Intermediate Farm Assets Breeding livestock 9,623 10,495 29,926 29,605 2,868 6,336 Machinery and equipment 40,591 40,705 26,499 40,703 28,520 27,277 Titled vehicles Other intermediate assets 11,500 5,635 10,154 10,324 1,940 1,868 Total intermediate farm assets 61,854 56,858 66,579 80,632 33,874 35,574 Long Term Farm Assets Farm land 186, , , , , ,695 Buildings and improvements 40,149 42,039 29,446 23,449 49,758 52,162 Other long-term assets 7,517 7, ,784 Total long-term farm assets 234, , , , , ,642 Total Farm Assets 434, , , , , ,337 Total Nonfarm Assets 193, ,427 45, , , ,613 Total Assets 627, , , , , ,950 Liabilities Current Farm Liabilities Accrued interest 2,075 1,881 2,230 1, ,028 Accounts payable 4,987 5,854 3,555 4,666 8,057 8,032 Current notes 32,797 30,410 20,675 15,259 24,214 31,618 Government crop loans Principal due on term debt 17,666 17,195 8,550 6,612 18,100 15,913 Total current farm liabilities 57,526 55,341 35,011 28,308 51,087 56,591 Total intermediate farm liabs 46,725 41,296 19,680 15,664 43,958 42,030 Total long term farm liabilities 78,432 78,315 54,428 60,785 67,190 69,641 Total farm liabilities 182, , , , , ,262 Total nonfarm liabilities 13,637 12,553 3,098 2,731 27,851 26,413 Total liabilities 196, , , , , ,676 Net worth (farm and nonfarm) 431, , , , , ,274 Net worth change 58, ,803 74,788 Ratio Analysis Current farm liabilities / assets 42 % 32 % 35 % 21 % 40 % 32 % Curr. & interm farm liab. / assets 52 % 42 % 33 % 20 % 59 % 47 % Long term farm liab. / assets 33 % 33 % 35 % 42 % 26 % 27 % Total debt to asset ratio 31 % 28 % 31 % 22 % 33 % 29 % 29

30 Table 27 Balance Sheet at Market Values 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Beginning Ending Beginning Ending Beginning Ending Assets Current Farm Assets Cash and checking balance 23,812 36,069 6,899 46,315 43,246 51,008 Prepaid expenses & supplies 10,582 15,421 3,827 8,963 7,184 14,453 Growing crops 5,850 8,942 2,660 4,145 4,757 8,621 Accounts receivable 6,303 7,514 10,000 17,186 11,003 6,723 Hedging accounts ,020 0 Crops held for sale or feed 75,393 91,369 60,018 45,496 59,933 85,062 Crops under government loan Market livestock held for sale 15,394 14,915 16,847 13,190 1,109 9,255 Other current assets Total current farm assets 138, , , , , ,121 Intermediate Farm Assets Breeding livestock 9,792 11,250 29,926 29,605 2,868 8,323 Machinery and equipment 209, , , , , ,133 Titled vehicles 4,421 4, ,818 10,864 Other intermediate assets 11,988 5,937 10,154 10,324 3,849 3,050 Total intermediate farm assets 236, , , , , ,369 Long Term Farm Assets Farm land 753, , , , , ,812 Buildings and improvements 91,667 95,440 73,237 71, , ,973 Other long-term assets 6,959 7, ,784 Total long-term farm assets 851, , , , , ,570 Total Farm Assets 1,226,283 1,331, , ,502 1,085,229 1,322,059 Total Nonfarm Assets 398, , , , , ,816 Total Assets 1,624,515 1,759, ,617 1,089,880 1,334,026 1,585,875 Liabilities Current Farm Liabilities Accrued interest 2,075 1,881 2,230 1, ,028 Accounts payable 4,987 5,854 3,555 4,666 8,057 8,032 Current notes 32,797 30,410 20,675 15,259 24,214 31,618 Government crop loans Principal due on term debt 17,666 17,195 8,550 6,612 18,100 15,913 Total current farm liabilities 57,526 55,341 35,011 28,308 51,087 56,591 Total intermediate farm liabs 46,725 41,296 19,680 15,664 43,958 42,030 Total long term farm liabilities 78,432 78,315 54,428 60,785 67,190 69,641 Total farm liabilities 182, , , , , ,262 Total nonfarm liabilities 13,637 12,553 3,098 2,731 27,851 26,413 Total liabs excluding deferreds 196, , , , , ,676 Total deferred liabilities 22,542 24, Total liabilities 218, , , , , ,676 Retained earnings 431, , , , , ,274 Market valuation equity 974,077 1,057, , , , ,926 Net worth (farm and nonfarm) 1,405,653 1,547, , ,393 1,143,940 1,391,200 Net worth excluding deferreds 1,428,195 1,571, , ,393 1,143,940 1,391,200 Net worth change 141, , ,259 Ratio Analysis Current farm liabilities / assets 42 % 32 % 35 % 21 % 40 % 32 % Curr. & interm farm liab. / assets 28 % 23 % 19 % 13 % 28 % 25 % Long term farm liab. / assets 9 % 9 % 10 % 11 % 9 % 8 % Total debt to asset ratio 13 % 12 % 11 % 10 % 14 % 12 % Debt to assets excl deferreds 12 % 11 % 11 % 10 % 14 % 12 % 30

31 Table 28 Statement Of Cash Flows 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Beginning cash (farm & nonfarm) 30,042 7,999 43,791 Cash From Operating Activities Gross cash farm income 194, , ,457 Net nonfarm income 38,630 70,680 42,690 Total cash farm expense -163, , ,582 Apparent family living expense -25,585-26,317-33,748 Income and social security tax -1,844-3, Cash from operations 41,740 57,245 34,423 Cash From Investing Activities Sale of breeding livestock Sale of machinery & equipment 3, ,723 Sale of titled vehicles Sale of farm land 24, ,470 - Sale of farm buildings Sale of other farm assets 7,580 1,000 0 Sale of nonfarm assets Purchase of breeding livestock Purchase of machinery & equip. -22,946-32,780-16,381 Purchase of titled vehicles Purchase of farm land -6,134-14,705-1,518 Purchase of farm buildings -8,635-8,061-7,050 Purchase of other farm assets -1,785-1, Purchase of nonfarm assets -6, ,430 Cash from investing activities -10,103 50,816-31,408 Cash From Financing Activities Money borrowed 63,899 30,454 61,484 Cash gifts and inheritances 5, Principal payments -73,031-35,816-57,342 Dividends paid Gifts given -15,666-64,715 - Cash from financing activities -18,975-69,244 4,202 Net change in cash balance 12,661 38,817 7,217 Ending cash (farm & nonfarm) 42,703 46,815 51,008 31

32 Table 29 Financial Standards Measures 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Liquidity Current ratio Working capital 119, , ,530 Solvency (market) Farm debt to asset ratio 15 % 12 % 13 % Farm equity to asset ratio 85 % 88 % 87 % Farm debt to equity ratio 17 % 14 % 15 % Profitability (cost) Rate of return on farm assets 3.6 % % 8.0 % Rate of return on farm equity 2.3 % % 10.1 % Operating profit margin 8.1 % % 19.1 % Net farm income 28,879-21,026 48,143 Repayment Capacity Term debt coverage ratio 284 % 461 % 339 % Capital replacement margin 45,600 41,963 54,215 Efficiency Asset turnover rate (cost) 43.8 % 38.9 % 41.9 % Operating expense ratio 70.1 % 88.5 % 62.1 % Depreciation expense ratio 11.9 % 23.6 % 8.7 % Interest expense ratio 4.5 % 3.0 % 3.9 % Net farm income ratio 13.5 % % 25.3 % 32

33 Table 30 Operator and Labor Information 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Operator Information Average number of operators Average age of operators Average number of years farming Results Per Operator Working capital 109,454 89, ,530 Total assets (market) 1,609, ,233 1,585,875 Total liabilities 193,680 89, ,676 Net worth (market) 1,415, ,661 1,391,200 Net worth excl deferred liabs 1,438, ,661 1,391,200 Gross farm income 195, , ,294 Total farm expense 169, , ,151 Net farm income 26,421-17,522 48,143 Net nonfarm income 35,342 58,900 42,690 Family living & tax withdrawals 25,094 25,234 34,142 Total acres owned Total crop acres Crop acres owned Crop acres cash rented Crop acres share rented Total pasture acres Labor Analysis Number of farms Total unpaid labor hours 2,149 1,850 2,123 Total hired labor hours Total labor hours per farm 2,687 2,310 2,434 Unpaid hours per operator 1,958 1,542 2,123 Value of farm production / hour Net farm income / unpaid hour Average hourly hired labor wage

34 Table 31 Financial Summary 2007 MI Cash Grain ( Acres) All Farms Low 25% High 25% Number of farms Income Statement Gross cash farm income 194, , ,457 Total cash farm expense 163, , ,582 Net cash farm income 30,538 16,846 25,875 Inventory change 23,809-5,073 38,820 Depreciation and capital adjust -25,469-32,799-16,551 Average net farm income 28,879-21,026 48,143 Median net farm income 20,831-10,823 46,843 Profitability (cost) Labor and management earnings 11,806-35,232 30,816 Rate of return on assets 3.6 % % 8.0 % Rate of return on equity 2.3 % % 10.1 % Operating profit margin 8.1 % % 19.1 % Asset turnover rate 43.8 % 38.9 % 41.9 % Profitability (market) Labor and management earnings 33,880-69, ,660 Rate of return on assets 6.7 % -4.7 % 18.3 % Rate of return on equity 7.1 % -5.9 % 20.5 % Operating profit margin 43.4 % % % Asset turnover rate 15.5 % 15.4 % 15.5 % Liquidity Ending current ratio Ending working capital 119, , ,530 End working capital to gross inc 61.5 % 72.4 % 74.8 % Term debt coverage ratio % % % Expense as a percent of income 74.6 % 91.5 % 66.0 % Interest as a percent of income 4.5 % 3.0 % 3.9 % Solvency (cost) Number of farms Ending farm assets 468, , ,337 Ending farm liabilities 174, , ,262 Ending total assets 677, , ,950 Ending total liabilities 187, , ,676 Ending net worth 490, , ,274 Net worth change 58, ,803 74,788 Ending farm debt to asset ratio 37 % 29 % 36 % Beg total debt to asset ratio 31 % 31 % 33 % End total debt to asset ratio 28 % 22 % 29 % Solvency (market) Number of farms Ending farm assets 1,331, ,502 1,322,059 Ending farm liabilities 197, , ,262 Ending total assets 1,759,304 1,089,880 1,585,875 Ending total liabilities 211, , ,676 Ending net worth 1,547, ,393 1,391,200 Net worth change 141, , ,259 Ending farm debt to asset ratio 15 % 12 % 13 % Beg total debt to asset ratio 13 % 11 % 14 % End total debt to asset ratio 12 % 10 % 12 % Nonfarm Information Net nonfarm income 38,630 70,680 42,690 Crop Acres Total acres owned Total crop acres Total crop acres owned Total crop acres cash rented Total crop acres share rented

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