Farm finance

Learn what a balance sheet is and how it can help you understand your financial situation.

• A balance sheet lists assets, liabilities and net worth as of a certain date.

• View an example balance sheet.

• Learn what terms on a balance sheet meet--such as current, intermediate and long-term assets.

An income statement measures profit or loss in a given length of time. View an example income statement and learn more about income statements including:

• Steps in creating an accrual adjusted income statement.

• What you can learn from an income statement.

The statement of owner's equity is a financial statement that analyzes why a farmer’s net worth (or owner equity) changed over the past year.

The statement of owner's equity is divided into three groups, each examining an individual portion of a farm’s financial life: earnings, things that don’t happen every year, and changes in capital assets and deferred liabilities.

The statement of cash flows examines how cash has entered and left your financial life during the year.

• Understand the difference between cash flow and net profit.

• Create your own statement of cash flows to examine different sources and uses for cash.

In the last few decades, much progress has been made to standardize financial statements in agriculture. This allows for ratios and measurements commonly used in other industries to become standard in the farmer’s financial world.

Key ratios and measurements covering liquidity, solvency, profitability, repayment capacity and efficiency have become standards in the agricultural industry and are generated from these financial statements.

• Learn about different ways to measure liquidity, solvency, profitability, repayment capacity and efficiency.

• Learn about different ratios including current ratio, debt to equity ratio and others.

Benchmarking is a process that makes it possible to research your farming business to find opportunities to improve your financial position, efficiency and profitability.

Learn more about how to interpret financial statements and measures.

The 2019 FINBIN report on Minnesota finances (PDF) includes information about the state of agriculture in Minnesota. 

• Profitability
• Liquidity
• Solvency
• Debt repayment capacity
• Median net farm income including for crop and livestock farms

The 2,306 Minnesota farms included in the FINBIN database represent a broad cross-section of Minnesota production agriculture. FINBIN data is provided by farms that participate in Minnesota State Farm Business Management Education programs and the Southwestern Minnesota Farm Business Management Association. 

• View 10-year average, past year actual, and this year's projected data of income and expenses in crop budgets for southern, central and northwestern Minnesota.
• Copy the acceptable crop price worksheet to your workspace to determine breakeven prices for your crops. You can also download a PDF version.
• View averages for Minnesota corn and soybean yields. Data includes the five-year averages for counties, regions and the state.

Prevented planting: Crop insurance and tax considerations  — Options for farmers with federal crop insurance who have not been able to plant by a given crop's final planting date or have drowned out areas in fields.

What does it cost to own and operate farm machinery? Machinery costs are substantial; control of them is important. 

• View document with machine costs separated into time-related and use-related categories.
• Or, complete a form to get this information as an Excel file. 

The USDA announced a Market Facilitation Program on July 25, 2019 for the 2019 program crops planted. The payment for 2019 varied from 2018 when most of the payment went to soybeans and was based on actual bushels produced.  

The program was modified to include a $15 dollar payment across the board for any prevented planting acres that were planted to a cover crop by August 1, 2019.

• The 2019 payment is based on acres planted of 20 program crops.  
• The payment is not based on bushels. It is a set amount per acre for any acres planted to one of the 20 program crops.  
• It varies by county. All of Minnesota individual county figures per acre are listed in the table below.