Dakota State University -- NDSU Agriculture
7 Morrill Hall, Fargo ND, 58105-5655, Tel: 701-231-7881, Fax: 701-231-7044
New Publication Shows Trends in N.D. Farm Financial Performance
In 2001, farms with less than 40 percent debt were five times as likely to have net farm income in excess of $50,000 than farms with greater than 70 percent debt.This finding is among many relating to North Dakota farms in a new publication from North Dakota State University.
Titled "Financial Characteristics of North Dakota Farms, 1999-2001," 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 to evaluate the financial performance of farms of various types and sizes and in different regions, says Andrew Swenson, farm management specialist for the NDSU Extension Service. Farm financial trends for the 1992-2001 period are also presented.
These benchmarks are in the form of 16 median financial performance figures 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 2001 was 2,292 acres and 44 years, respectively, compared to 1,300 acres and 51 years for all farms in the state.
"These farms may be representative of operators who rely on farming for a substantial portion of their livelihood," Swenson concludes. "Nearly 5 percent of all North Dakota farms with gross revenue greater than $100,000 are included in the analysis."
Swenson points to other significant findings in the 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 at http://agecon.lib.umn.edu/ (select North Dakota State University and Report No. 490).