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Finances
Recorded February 24, 2020 | Purdue agricultural economists, Nathan Thompson and James Mintert discuss 2020 crop insurance choices and provide insight into decision making for corn and soybean farmers.
Read MoreThe slidedeck presented by the Center’s Michael Langemeier during the farm finance presentation at our Crop Marketing & Farm Finance Workshops. The session explored the use of enterprise budgets to evaluate long-term enterprise profitability, and whole-farm financial projections to evaluate profitability and repayment capacity for the upcoming year.
Read MoreRecent trends in feed costs for farrow-to-finish and swine finishing enterprises, and projections for 2020. Feed costs are expected to be similar to that experienced in 2019. However, current projections have a wide band around them.
Read MoreAt the end of 2019, fed cattle prices were $122.00. This increase in fed cattle prices had a large impact on cattle finishing profitability in the fourth quarter of 2019. Moreover, fed cattle prices are predicted to remain strong through at least the second quarter of 2020.
Read MoreCorn prices have been quite volatile in 2019. Corn prices in Indiana were approximately $3.70 per bushel in April, $4.55 in July, and $3.90 in December. Given the uncertainty regarding what gets planted to large amount of acres that were not planted in 2019 (i.e., prevent plant acres), corn prices are likely to also be volatile in 2020.
Read MoreUsing Indiana cash prices reported by USDA-NASS, the soybean to corn price ratio was quite variable in 2019 ranging from 1.93 in July to 2.37 in January. This leads to two important questions. How common or uncommon is it for this ratio to be substantially above or below the long-run average? Does a low or high ratio signal a change in the relative profitability between corn and soybeans?
Read More2019 Ag Policy Forum, hosted by the Indiana Soybean Alliance & Indiana Corn Growers Association in Noblesville, Indiana, presentation by James Mintert.
Read MoreThough both having a negative profit margin and a debt to asset ratio over 0.70 are important determinants of financial stress, a high debt ratio explains the vast majority of the variation in financial stress over time.
Read MoreWhy is working capital so important in today’s environment? To start with, working capital represents a farm’s first defense against financial stress. When cash flow is tight or even negative, working capital can be used to cover the gap or shortfall.
Read MoreFarms with low profitability and high solvency are typically financially stressed. This article uses the operating profit margin ratio and the debt to asset ratio to create a measure of financial stress.
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