@article{Olson:13612,
      recid = {13612},
      author = {Olson, Kent D. and Christensen, James L. and Weness, Erlin  J. and Anderson, Robert D. and Fales, Perry A. and  Nordquist, Dale W.},
      title = {2000 ANNUAL REPORT OF THE SOUTHWESTERN MINNESOTA FARM  BUSINESS MANAGEMENT ASSOCIATION},
      address = {2001},
      number = {1701-2016-138688},
      series = {Staff Paper 01-2},
      pages = {84},
      year = {2001},
      abstract = {Average net farm income was $81,750 in 2000 for the 212  farms included in this annual report of the Southwestern  Minnesota Farm Business Management Association.  The median  or middle income was $69,414.  This is the second annual  increase from the extremely low levels of 1998.  Almost all  of the increase can be attributed to the increase in the  value of inventories, government payment, and the decrease  in depreciation charge.  

	However, the change in  depreciation was almost entirely due to a change in the  accounting procedures, not a change in purchasing behavior  by farmers.  Using the "new" depreciation rules, net farm  income (NFI) in the previous 5 years was estimated to be  higher than when the "old" rules were used.  For example,  the "new" NFI was estimated to be $61,347 in 1999 which is  $17,585 higher than the NFI using the "old" rules.

	As in  previous years, the actual profit levels experienced by  individual farms vary greatly from the overall average  profit.  When the net farm incomes for the 212 farms in the  report are ranked from lowest to highest, the resulting  graph shows how much the incomes do vary.  Several farms  experienced negative income and several experienced very  high incomes.  Most of the net farm incomes ranged from  below 0 to about $150,000.  The median or middle income was  $69,414. The high 20% of the farms had an average net farm  income of $199,929 which is an increase from 1999. The low  20% of the farms had an average loss of $424 in 2000 which  is better than 1999.

	Average gross cash farm income in  2000 was $422,897.   This was a 9% increase from 1999.   Four sources of sales again dominated:  corn, hogs,  soybeans, and beef finishing.  Soybean sales increased 18%  between 1999 and 2000; hog sales, by 14%; corn sales by 4%,  and beef finishing by 7%.

	Government payments of all  types increased again to $50,567 per average farm  in  2000--an increase from $44,674 in 1999, $30,021 in 1998,  and $12,257 in 1997.  As a percentage of total income,  government payments were 12% in 2000, compared to 11% in  1999, 8% in 1998, and 3% in 1997. 

	Cash expenses  increased 7% to an average of $348,711 in 2000.  As a  percentage of both cash expenses and depreciation in 2000,  feeder purchases; feed, seed, fertilizer, and crop  chemicals; and rent dominate. 

	Both the average rate of  return on assets (ROA) and the rate of return to equity  (ROE) increased substantially in 2000 compared to 1999.  In  2000 ROA averaged 12% and ROE was 19% using assets valued  on a cost basis. 

	Using a market value basis, average  total equity (of the 181 sole proprietors) was $605,149 at  the end of 2000.  This was an increase of $50,064 during  the year for these 181 farms.  Average equity has continued  to improve since 1986.  The average debt-asset ratio  improved, that is, decreased to 47% at the end of  2000.

	The average corn yield was 150 bushels per acre;  soybeans were at 46 bushels per acre.

Results by Type of  Farm	

	The 212 farms in the report are classified as a  certain type of farm (e.g., hog) on the basis of having 70  percent or more of their gross sales from that category.   Using this 70 percent rule in 2000, there are 63 crop  farms, 13 hog farms, 24 crop and hog farms, 6 beef farms,  and 15 crop and beef farms.  (There are 87 farms which do  not have a single source (or pair of sources) of income  over 70%.)

	Compared to 1999, all types of farms (except  beef farms) had better net farm incomes in 2000.  A similar  story can be seen in the rate of return to assets (ROA).   (Assets are valued on a cost-basis for ROA). 

	Using  assets valued on a market basis, the average crop farm has  a debt-to-asset ratio of 45% at the end of 2000.  Farms  with 70% of their income from either hogs or beef had an  average debt-to-asset ratio higher than 50%.

	The report  provides additional information on profitability,  liquidity, and solvency as well as other whole-farm  information and detailed information on crop and livestock  enterprises.  Also reported are whole-farm financial  condition and performance by county, sales size class, and  type of farm.},
      url = {http://ageconsearch.umn.edu/record/13612},
      doi = {https://doi.org/10.22004/ag.econ.13612},
}