NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665
September 7, 2000
In 1999 the debt-to-asset ratio of North Dakota farms improved for the first time in six years, and less than one out of 10 farms had negative net farm income compared to one out of four farms in 1997 and 1998. These findings are among many relating to North Dakota farms in a new publication from North Dakota State University.
Titled "Financial Characteristics of North Dakota Farms, 1997-1999," the publication contains highlights from a financial analysis of more than 530 farms enrolled in the North Dakota Farm Business Management program, along with useful benchmarks farmers can use to evaluate the financial performance of their own operations, says Andrew Swenson, farm management specialist for the NDSU Extension Service.
Those benchmarks are in the form of median financial performance figures for farms of various types and sizes and in different regions as described by 16 economic measures, including net farm income, debt-to-asset ratio, current ratio (current assets divided by current liabilities), rate of return on assets and interest expense as a percentage of gross revenue.
"The median provides a better indicator of how the typical farm is faring," Swenson explains, "because a few very large farms can significantly raise the average. The median is a midpoint: half the farms have a higher amount and half are lower."
The farms in this study are larger and the operators are younger than the state average. Average size of farm and age of operator in 1999 was 2,244 acres and 43 years, respectively, compared to 1,292 acres and 51 years for all farms in the state.
"These farms may be representative of operators who rely on farming for their livelihood," Swenson concludes. "Nearly 5 percent of all North Dakota farms with gross sales greater than $100,000 are included in the analysis."
Swenson points to other significant findings in the new study:
For a free copy of the publication, contact the Department of Agribusiness and Applied Economics, NDSU, Fargo ND 58105-5437, or call (701) 231-7441. This publication may also be obtained on the World Wide Web (http://agecon.lib.umn.edu/ndsu/aer447.pdf or http://agecon.libu.mn.edu/ndsu.html).
Source: Andy Swenson, (701) 231-7379
Editor: Tom Jirik, (701) 231-9629
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