Texas Crop Farms Current Financial Situation

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Texas Crop Farms Current Financial Situation

• Steven L. Klose
• Texas Agricultural Extension Service
• Southern Region
• Agricultural Outlook Conference
• September 2000

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Texas Risk Management Education Program

• Risk Management Education
• Master Marketer
• Curriculum Guide
• FARM Assistance
• Decision Support System
• Financial analysis of alternative operating
  strategies
• Database of Base Farm Analyses

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What is FARM Assistance?

• A strategic planning tool designed to provide
  farmers and ranchers the flexibility to
• pro forma analyze their operation under risk for
  the purpose of choosing among risk management
  tools and/or business strategies.

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What is FARM Assistance?

• Information
• All Enterprises
• Non-farm Activities
• Projection
• Ten year pro-forma
• Incorporating risk in production and prices
• Reports distribution of key financial performance
  measures
• Comparative Analysis

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Alternative Strategies Analyzed

• Capital investment
• Equipment
• Harvest vs. custom
• Irrigation systems
• Size of the operation
• Buy/Sell land
• Rent/Lease land
• Management
• Crop insurance
• Retirement investment
• Debt Management

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FARM AssistanceData Base

• Data Base of Farms
• 181 Completed Report
• Covering over 450,000 acres
• Categorization of farms
• NCFI performance (3 groups)
• Specific Commodities ( more than 50 of planted
  acres)
• Cotton (48)
• Wheat (15)
• Corn Sorghum (35)

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Farm and Ranch Characteristics
Farm Group ( of farms) Acres 2000 Receipts (1,000) 2000 NCFI (1,000) Off-Farm Salary
Top (61) 3,544 777 178 6,570
Middle (60) 1,776 285 45 11,363
Bottom (60) 1,920 201 -2 13,845

Cotton (48) 1,933 393 92 7,760
Wheat (15) 2,280 279 62 11,227
FeedGrains (35) 1,959 440 58 19,159
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Debt Level andInterest Expense
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Asset Structure (1,000)
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Debt Structure (1,000)
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Projected 2001 Profitability (1,000)
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Projected Risk in 2001
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Equity Growth and Risk for 2001
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Questions or More Information
Joe Outlaw Steven Klose Dean McCorkle George
Knapek 1-877-TAMRISK http//trmep.tamu.edu/