Market Journal: Ag Income and Expenses in 2007

Market Journal: Ag Income and Expenses in 2007

May 16, 2008

Lessons Learned from 2007 Farm Income Averages

In the April 9, 2008 Cornhusker Economics newsletter (PDF 130KB), Tina Barrett, director of Nebraska Farm Business Association, shares three lessons learned from 2007 farm records:
  1. Not everyone made money. Seven percent of the operations had an accrual basis net loss in 2007. All thesefarms had heavy livestock influence.

     

  2. Most farm income numbers looked good last year, but be prepared to look below the surface. If a crop farmer's efficiency didn't improve and leverage levels didn't decrease, the financial health of the business should be examined.

     

  3. Costs of production are increasing — 39% for irrigated corn, 26% for irrigated beans and 82% for dryland wheat from 2002 to 2007. In 2007, the average cost of production for irrigated corn rose by 44 cents per bushel or $47.05 per acre. That's a 13% increase over 2006's per acre cost.

Barrett writes: "The increase in cost of production means an increased level or risk on each acre of production. This increased level of risk means that if and when things turn for the worse, the ability for your financial health to quickly go bad, and be worse than ever before, is at a higher level than ever experienced."

Check out Barrett's article in Cornhusker Economics for more information.

 

On this week's Market Journal, Tina Barrett, director of Nebraska Farm Business Association, discusses ag income and expenses for 2007. The average net farm income for Nebraska Farm Business clients was about $200,000 in 2007, a healthy increase from the previous year. Unfortunately, expenses also increased.

Also on the program this week:

  • Cattle prices may hold through summer — Mike Briggs, Seward feedlot owner;
  • Controlling winter annual weeds — Lowell Sandell, Extension weed science educator;
  • Adjusting insect treatment plans for current crop prices — Bob Wright, extension entomologist; and
  • Weather — Al Dutcher, Nebraska state climatologist

Next week's Market Journal will include an analysis of the wheat market by Paul Burgener, Extension ag economics research analyst at the Panhandle Research and Extension Center, Scottsbluff.p>Market Journal broadcast times:

NET1 - Saturday, 7 a.m. CT
NET2 - Sunday, 9 a.m. CT
Dish Network, Channel 9411
Friday, 12:30 p.m. CT
Sunday, 9:30 p.m. CT
Wednesday, 8:30 a.m. CT