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Finances

2017 Gross Revenue Scenarios for Corn

Crop margins have been extremely tight since 2014 and are likely to remain tight for in 2017. In this environment, it is natural to think about possible gross revenues for corn in 2017.

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Relationship between Cash Rent and Net Return to Land

This article examines the relationship between cash rent and net return to land for Indiana, and attempts to answer this question.

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Contribution Margins for Corn/Soybean Rotation

The contribution margin for an enterprise is defined as the difference between market revenue and total variable cost. Fertilizer, seed, pesticides, dryer fuel, machinery fuel, machinery repairs, hauling, interest, insurance, and miscellaneous cost are typically included in total variable cost.

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How Should Business Income be Divided?

A model described that can be used to divide farm business income and provided an illustration of how this model could be used in practice.

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Stress Testing Financial Performance

Stress testing describes a range of techniques that can be used to access the vulnerability of a firm’s balance sheet and income statement to changes in prices, production, or financing. Stress testing can be an extremely useful tool when evaluating strategies for dealing with lower prices, higher costs, asset purchases, and changes in loan terms.

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Leverage and Interest Rate Risk

Financial risk is incurred when a farm borrows money to purchase assets or operate the farm. Financial risk is caused by uncertainty pertaining to interest rates, lending relationships, changes in market value of assets used as collateral, and cash flow used to repay debt.

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Leverage and Financial Risk

Financial risk is incurred when a farm borrows money to purchase assets or operate the farm. Financial risk is caused by uncertainty pertaining to interest rates, lending relationships, changes in market value of assets used as collateral, and cash flow used to repay debt.

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Becoming a “Best in Class” Farm

Corn Belt agriculture is in the midst of transitioning from one of the most profitable periods on record to what could be an extended period of tight margins for most corn and soybean operations. Now that the 2015 planting season is drawing to a close, you should take time to reevaluate your farming operation and consider how you can make sure your farm is strategically positioned to be a “best in class” operation in the years ahead. Doing so will help ensure that your farm will thrive, not just survive, in an era of tight operating margins.

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Estimating the Cost for Drying Corn

The cost of drying corn grain will depend on the type and size of drying system utilized, the amount of moisture to be removed, the weather conditions during the drying period, and the current per unit costs for electricity and drying fuel.

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Depreciation and Expensing Options

This article reviews depreciation and expensing options for recent years and options currently available for 2013 and 2014. The discussion emphasizes changes affecting agricultural producers and farm businesses.

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