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Weekly Farm Economics

Trends in Farm Balance Sheets over Time

  • March 13, 2018
  • Gary Schnitkey

Trends in the financial position of Illinois farms are presented in this article. Overall, farms gained financial strength from 2006 to 2012. Since 2012, working capital has declined. The net…
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IFES 2017: Where To From Here

  • January 5, 2018
  • Dwight Raab

While yields for most have assisted in mitigating working capital losses, commodity prices continue to present challenges in creating positive cash flows and profits. Corn at less than $4 continues…
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U.S. Farm Sector Financial Performance

  • October 18, 2017
  • Michael Langemeier

Metrics that can be used to measure farm profitability include earnings before interest, taxes, and amortization (EBITA), net farm income, the operating profit margin ratio, return on assets, and return…
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U.S. Farm Sector Balance Sheet

  • September 22, 2017
  • Michael Langemeier

U.S. net farm income has declined approximately 49% since its peak in 2013. The balance sheet for the U.S. farm sector continues to adjust to the declines in U.S. net…
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The Deferred Tax Monster

  • May 19, 2017
  • Brandy Krapf, Dwight Raab, Bradley Zwilling and Bailey Fletcher

Because agriculture producers can use cash accounting for federal and state income tax purposes, there is a recognizable difference between taxable farm income and accrual farm income. These differences can…
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Transferring Business Management

  • April 7, 2017
  • Michael Langemeier

Transferring business management between generations is one of the most critical steps in transitioning the business from an older generation to a younger generation. Having said that, in numerous instances,…
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Agricultural Debt Continues to Increase

  • February 17, 2017
  • Brandy Krapf, Dwight Raab and Bradley Zwilling

Agricultural debt on a nominal basis in Illinois has been increasing since 1991. Data from the U.S. Department of Agriculture (USDA) and Illinois Farm Business Farm Management (FBFM) are shown…
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Where Is Your Net Worth?

  • November 18, 2016
  • Bradley Zwilling, Brandy Krapf, and Dwight Raab

Net Worth is measured as all assets less all liabilities. If you consider that your liabilities are claims on your assets by your lenders, then you can consider the liabilities…
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Weekly Farm Economics

The Danger of Refinancing

  • August 30, 2016
  • Gary Schnitkey

Many farms have depleted working capital in the past several years. Now operating loan balances may exist that cannot be paid down with this year's cash returns from farming operations.…
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Debt, Repayment Margins and Farm Income

  • July 15, 2016
  • Bradley Zwilling, Dwight Raab, and Brandy Krapf

Earlier articles by Schnitkey and Zwilling reviewed farm business liquidity in terms of the current ratio and working capital. This article reviews three measures of debt and repayment ability for…
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Du Pont Financial Analysis

  • April 21, 2016
  • Michael Langemeier

The Du Pont financial analysis model is a useful method of illustrating the relationship between the asset turnover ratio, the operating profit margin ratio, return on assets, and return on…
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