摘要：Average net farm income was $242,267 in 2007 for the 107 farms included in this annual report of the Southwestern Minnesota Farm Business Management Association. Average earnings increased by 57% over the average of $154,698 in 2006. In constant dollars, 2007 was the most profitable year for association members in the last 20 years (Figure 1). In fact, we have to go back to 1973 to find a more profitable year for association members. 2007 continued a steady climb in average earnings since 2001. Above average prices for corn, soybeans, and other crops more than compensated for reduced profitability of hog and beef enterprises. As in previous years, the earnings of individual farms varied greatly from the overall average. The median or middle income was $199,745. Unlike most previous years, no farms experienced negative net farm incomes in 2007; 7 % had incomes under $50,000 while 81% had incomes over $100,000. The high 20% of the farms had an average net farm income of $518,851, an increase of 36% over 2006. The low 20% of the farms had an average net farm income of $59,571 in 2007, an increase of 43% over 2006. Average gross cash farm income was $731,897, a 20% increase from 2006 (Figure 2). Three sources of sales dominated: hogs, corn, and soybeans (Figures 3 and 4). Total crop sales accounted for 44% while livestock sales and contracting income accounted for 45% of total cash receipts. Entire report is available at: http://www.cffm.umn.edu/Publications/Pubs/FBMA/SW_MN_FBMA_2007.pdfGovernment payments of all types averaged $17,033 in 2007, a 48% decrease from the previous year (Figure 2). With higher crop prices, no farms reported loan deficiency (LDP) payments in their farm income in 2007, compared to $3,145 in 2006 and $26,519 in 2005. Government payments represented 2% of gross cash farm income in 2007 compared to 5% in 2006. Cash expenses increased by 20% in 2007, the same percentage increase as cash income, to an average of $592,841. As a percentage of total expenses, seed, fertilizer, and crop chemicals (17%), feeder livestock purchases (16%), feed (16%), and land rent (10%) continue to be the largest expense items (Figures 5 and 6). Fuel and oil expense accounted for 4% of total expenses, unchanged from 2006. Average rate of return on assets (ROA) was 17% in 2007 with assets valued at adjusted cost or book value, up from 13% the previous year (Figure 7). Rate of return on equity (ROE) averaged 25%, up from 19 percent. The fact that ROE exceeded ROA indicates that debt capital earned more than its cost. Using the market value of assets, average total equity (of the 91 sole proprietors) was $1,224,181 at the end of 2007 (Figure 8), an increase of $252,175 from the beginning of the year for these farms. The average debt-to-asset ratio improved slightly to 40%. The average corn yield was 162 bushels per acre, down from 169 bushels in 2006. Soybeans averaged 49 bushels per acre, down from 51 bushels in 2006 (Figure 9). Results by Type of Farm The 107 farms in the report were classified as a certain type of farm (e.g., hog) on the basis of having 70 percent or more of their gross sales from that category. Using this criteria, there were 63 crop farms, 5 hog farms, 7 crop and hog farms, and 8 crop and beef farms. (There were 18 farms which did not have a single source (or pair of sources) of income over 70%.) Based on Net Farm Income, only Crop Farms and Crop and Beef Farms were more profitable than in 2006. Specialized Hog Farms were again the most profitable (Figure 10) based on absolute income levels but it must be recognized that the Hog Farms were much larger in terms of gross sales than any other farm type. In fact, the average Hog Farm's gross sales were five times the association average. Crop and Beef Farms had the highest rate of return on assets (ROA) at 21%, followed closely by Crop Farms at 20% (Figure 11). Hog Farms, while they had the highest absolute profit levels, had the lowest ROA at 9%. (Assets are valued at adjusted cost basis for ROA calculations.) Using assets valued at estimated market value and including deferred liabilities (estimated taxes if liquidated) , the average farm had a debt-to-asset ratio of 40% at the end of 2007. Crop and Beef Farms, at 49%, carried more debt as a percentage of assets than any other farm type (Figure 12). The report provides additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Also reported are whole-farm financial condition and performance by county, sales size class, type of farm, debt-to-asset ratio, and age of operator.
