I made my 13th-annual appearance at the Executive Program for Agricultural Producers (TEPAP) down in Austin, TX. This year we had 90 motivated producers from the U.S., Canada, and Australia, which led to some great interaction and perspectives. Dick Wittman, an outstanding farm management professional and good friend, conducted a survey at the conference.
How did this group perform financially? First, this group had about $6 million in assets and $2 million in debt with an average debt to asset ratio of 33 percent. This was lower than I expected because most commercial producers’ ratios are about 40 percent.
This group had generated about $1.9 million in revenue with a 6 percent rate of return on assets. The rate of return on equity was higher, logging in at 8.5 percent.
I was not surprised to find that this group rented nearly 50 percent of their asset base. This is a trend I am observing amongst this segment of producers.
The group was diversified with three enterprises and nine full-time workers, on average.
They worked on average 297 days per year or 3026 hours per year with an annual compensation of $118,579. The perks I often discuss were around $35,000, for a total compensation package of $154,000. The bottom line is they worked hard, managed well and were paid for their efforts.
I hope this gives you something to benchmark on in the future.
On the Road
Some of you want to know if I will be in your area. The first week of February I will be in Lincoln, NE; Mendota, IL; central Michigan; and Clearwater, FL. The following week will be spent out in Spokane, Washington.
Hope to see you!
My e-mail address is:sullylab@vt.edu
Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.
To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.
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