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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? [email protected] (Dan Welch)
[email protected] (Brad Rickard)
