BERRY FARM BUSINESS ANALYSIS 2015 EMPIRE PRODUCER’S EXPO DAN WELCH CHARLES H. DYSON SCHOOL OF...

BERRY FARM BUSINESS ANALYSIS

2015 EMPIRE PRODUCER’S EXPO

DAN WELCH

CHARLES H. DYSON SCHOOL OF APPLIED ECONOMICS AND MANAGEMENT

JANUARY 22, 2015

TYPES OF RECORDSProduction Records

• Enterprise Budgets• Yield, Pesticides, Crop Rotations etc.

Financial Records

• Income Statement • Balance Sheet• Cash Flow Statement• Ratio Analysis• Family Living

Ownership Records

• Asset Inventory • Legal Documents• Estate Plan

INCOME STATEMENT

Summary of revenue and expenses for a certain time period

Includes all business income

• Can be cash or non-cash

Identify all expenses

• Cash: plants, fertilizer, pesticides• Non-cash: depreciation, accounts payable, accrued interest

Net Farm Income from Operations= Total Revenue-Total Expenses

INCOME STATEMENT

BALANCE SHEET

Records everything “owned” and “owed” by the farm

Assets- Anything of value owned

Liabilities- Debt or something owed

Net Worth=Assets-Liabilities

Current Assets/Liabilities

• 1 year• “Liquid”

Intermediate Assets/Liabilities

• 1-10 years• Machinery and Irrigation

Long Term

BALANCE SHEET

CHANGES IN NET WORTH

2012 2013

Total Assets 782,471 873.022

Total Liabilities 196,953 127,955

Net Worth 585,518 745,067

CASH FLOW STATEMENT

Cash in/Cash out for a period of time

Estimate for borrowing needs and seasonal variation

Includes any cash out of the business for family living expenses

Can be used to plan for capital purchases

CASH FLOW STATEMENT

ANALYSISMeasures of profitability, liquidity, solvency

Profitability

• Net Farm Income• Return on Assets= Return to Assets ($)/Asset Value• Return on Equity= Return to Equity($)/Average Equity

Liquidity

• Current Ratio= Current Assets/Current Liabilities• Working Capital= Current Assets-Current Liabilities

Solvency

• Debt to Asset Ratio= Liabilities/Assets• Equity to Asset Ratio= Net Worth/Total Assets• Debt to Equity Ratio= Total Liabilities/Net Worth

NET FARM INCOME 2012 & 2013

RETURN ON EQUITY

2012

Net Farm Income with appreciation

7,216

Labor and Management Income per Operator

2,466

Return on Equity Capital -15.31%

ENTERPRISE BUDGETS

Enterprise budgets estimate profitability of each separate crop or operation on the farm

Used to calculate breakeven price and yield

Our team is developing enterprise budgets for the three main berry crops

Budgets will be validated by growers from the NYSBGA in late winter and early spring

CROP PRODUCTIONCrop 2012 BFBS 2012 USDA

Survey Data

Strawberries 91.96 cwt/Acre 27 cwt/acre

Blueberries 4,583 lbs/acre 1,100 lbs/acre

Brambles 6,795 lbs/acre ????

RESEARCH FUNDED BY THE NYFVI PROJECT #AIC 12-001“BUILDING A BETTER BOTTOM LINE FOR

NYS BERRY GROWERS”

Thanks for Listening!

Questions? Suggestions?dlw56@cornell.edu (Dan Welch)

bjr83@cornell.edu (Brad Rickard)