OSU Farm Management

This site uses USDA data to create visualizations of farm financial data. These numbers can be used as benchmarks for comparing with financial data from a viewer’s farm or ranch. The data is presented in an easy to read and understand format. Data is in both graphic and number formats. Click the link below to view these visualizations.

This article examines the persistence of financial performance measures for a sample of farms over a five-year period. Specifically, using KFMA whole-farm data for farms with continuous data from 2015 to 2019, the operating profit margin ratio is computed for each farm and year. The number of years each farm was in the top and bottom performance quartiles is computed and discussed. Also, the operating profit margin ratio and corresponding farm characteristics are compared acr...oss financial performance quartiles. The operating profit margin ratio was computed by adding interest expense and subtracting unpaid family and operator labor from net farm income and dividing the result by value of farm production. This information can serve as a benchmark of farm financial performance to allow producers to compare their numbers to the performance of different profitability groups. Click the link below to view this article. Article by Michael Langemeier Purdue University, Department of Agricultural Economics and Elizabeth Yeager Kansas State University, Department of Agricultural Economics

Share of off-farm income varies by commodity specialization. Farm households obtain income from farming and off-farm income, such as salaries, pensions, and investment interest. Among farm businesses, off-farm wage and salary income varied by commodity specialization. For general crops, beef cattle, and poultry operations, average off-farm wage and salary income contributed more than half of total household income. Dairy operations, by comparison, averaged $37,339 in off-far...m wage and salary income, the lowest of any commodity. Dairy operations require extensive and ongoing time commitments, so managing a dairy farm rarely permits an operator to work many hours off-farm. As a result, dairy farm households relied primarily on income from the operation, an average of $148,831 in 2019. The beef cattle category should be no surprise to most of us in Oklahoma. While beef production is big business in this state, it also includes many small businesses, as there are many Oklahoma farms and ranches with fewer than 50 head of cows. Of the farms with beef cows, 62% have fewer than 50 head. Many of these operators rely on off-farm sources of income to cover their family living.

OSU Extension offers Oklahoma producers free assistance with farm financial planning. This program is open for all types of animal and crop operations and will result in aggregated benchmarking data that can be used through FINBIN by producers throughout the state. Click the link below to sign up for this program and for more information.

Proposed Tax Law Changes Wait to See What is Enacted At the moment there is considerable speculation about the proposed tax law changes presented in Biden’s American Families Plan and the American Rescue Plan. The proposed tax changes that appear to have the greatest impact on agricultural producers is the elimination of the like-kind exchange provision and the step-up of the basis of assets to fair market value at date of death and changing many other estate tax provis...ions. Given that these are currently just proposals and will be brought up for debate in the near future, it is important not to rush into making any changes to your current tax plans. In order to do sound planning, we will need to see what the final legislation is, so it is now a waiting game. Keep in mind this bill will be debated and there is no way of knowing what amendments will be made or what the final bill will look like as this is a proposed law change. The most important take home point at this time is that it is important to talk to your legislators and express your concerns about the bill’s proposed tax law changes. Without your input it is likely that the final bill will contain undesirable provisions.

Labor and Machinery Sharing Agreement is one of your farm business choices. It is used in the farm business transfer process when the younger party "spins-off" or establishes a separate farming operation. Although each party has a separate farming operation, they share labor and machinery. This agreement is used when each party has a separate land base. They younger party may obtain a rented farm from land the older party previously rented or land that appeared on the rental ...market. Buying land may be an option in some situations. Each party pays the production expenses, receives the income, and has final management control over his/her individual cropping operation. Livestock programs may be separate or mutually owned and operated. Click the link below to read more about labor and machinery sharing agreements. This is one of many resources available on the OSU Farm Transitions website. Visit: https://extension.okstate.edu//putting-your-gam/index.html to find more information on planning and implementing a farm or ranch transition.