The publication "Financial Characteristics of North Dakota Farms, 2000-2009" summarizes the performance of more than 500 farms enrolled in the North Dakota Farm Business Management Education program The program use 16 financial measures to evaluate liquidity, solvency, repayment capacity, profitability and financial efficiency.
Farms are grouped by region, type, size, gross cash sales, land tenure, profit, debt-to-assets ratio and the age of the farmer to look at relationships between financial performance and farm characteristics.
In 2009, median and average acreage per farm was 1,995 acres and 2,516 acres, respectively. Farm gross cash revenue has doubled during the past decade. In 2009, the median and average was $430,321 and $558,305, respectively. More than 70 percent of the farms were crop farms.
"Farm financial performance in 2007 and 2008 was much superior to other years in the 2000- 2009 period," says Andy Swenson, North Dakota State University Extension Service farm management specialist. "Overall, performance was the worst in 2001. One measure of financial efficiency is the percentage of each dollar of gross revenue that is converted to profit. Median net farm income as a percent of gross revenue was the lowest of the decade in 2009 at 13.4 percent. It peaked at 30.6 percent in 2007 and ranged from 14 to 19.6 percent from 2001 to 2006."
The Red River Valley and crop farms typically had stronger profitability,
solvency and repayment capacity than other regions and farm types. Exceptions were 2007 and 2009, when the north-central region had the best regional performance, and 2005, when the south-central region and livestock farms had a better performance.
"Farms with sales of less than $250,000 were more than twice as likely to have a greater than 70 percent debt-to-asset ratio, as compared with farms with sales greater than $250,000," Swenson says. "As expected, the percent of debt-to-asset ratio decreased and the level of cropland ownership increased as farmers got older. The rate of return on equity was greater than the rate of return on assets, which indicates that debt capital was employed profitably during nine years of the past decade for farms with sales greater than $500,000, but never by the farm group with less than $100,000 in sales."
For a free copy of the publication, contact the Department of Agribusiness and Applied Economics, NDSU Dept. 7610, P.O. Box 6050, Fargo, ND 58108-6050, or call (701) 231-7441.
This publication also may be obtained on the Web at http://agecon.lib.umn.edu/ (search for "Financial Characteristics of North Dakota Farms, 2000-2009").
