Acres: Tillable acres farmed by the operator.
Age: Age of the FBFM cooperator.
Assets: The fair market value of operator's assets included on the balance sheet.
Beef farms: Farms on which the value of feed fed was more than 40 percent of the crop returns and the beef enterprise received more than half of the value of the feed fed.
Current assets: Current assets generally include items that can be quickly converted to cash without loss of value or items that are used up during the normal business cycle of the farm operation. For this study, current assets include the fair market value of the following items:
Hedging account balances
Savings account balances
Marketable stocks and bonds
Crop and feed inventories
Other current items
Current liabilities: Obligations that are payable within the following 12 months. Current liabilities include the following items:
Short term operating
Principal on intermediate and long term notes due in 1 year
Other current liabilities
Dairy farms: Farms on which the value of feed fed was more than 40 percent of the crop returns and the dairy enterprise received more than one third of the value of the feed fed.
Depreciation: The allocation of the cost of assets over the projected life of the assets. In 2003, Illinois FBFM changed the depreciation calculation method from a tax depreciation to an economic depreciation. Economic depreciation does not include additional bonus depreciation, expense election, or rapid acceleration of depreciation currently allowed by the Internal Revenue Service. The change in methods was used to more closely reflect the actual decline in depreciable assets from year to year.
Farm assets: Total fair market value of total assets excluding the following items:
Other and non farm current assets
Cash value life insurance
Home furnishings and personal items
Notes receivable I.T.
Contracts and notes receivable L.T.
Non farm real estate
Farm equity: The difference between fair market value of farm assets and the amount of liabilities.
Fixed assets: Fixed assets are items that are used or held in the business over a long period of time. A general rule of thumb is a period of 10 years or more. The land valuation procedures are discussed below. Fixed assets include the fair market value of the following items:
Farm real estate
Buildings and improvements
Other non farm real estate
Contracts and notes receivable
Other fixed assets
Grain farms: Farms where the value of the feed fed to all livestock enterprises was less than 40 percent of the crop returns.
Hog farms: Farms on which the value of feed fed was more than 40 percent of the crop returns and the hog enterprise received more than half of the value of the feed fed.
Interest expense: Cash interest paid plus or minus any change in accrued interest.
Intermediate assets: Intermediate assets are those assets that are used or held in the farm business over several years. Many of these assets are depreciated and replaced over a period of time, typically two to ten years. Both cost and fair market values of assets are kept in the records. Cost values are maintained with the tax depreciation records while fair market values are determined by the farmer and field staff based on the estimated current market value of the asset. Intermediate assets in this study include the fair market value of the following items:
Machinery, equipment and auto
Cash value life insurance
Home furnishings, personal items
Securities not readily marketable
Farm Credit System stock
Other intermediate assets
Intermediate liabilities: Intermediate liabilities are obligations typically having an original maturity of 2 to 10 years. These include the following items:
of intermediate term notes
Life insurance policy notes
Other intermediate liabilities
Labor charge: The charge for unpaid family and operator labor. Labor was charged at $2,750 per month in 2004 and and $2,800 per month in 2005.
Land valuation: A basic value on bare land is established for each farm according to the soil rating.
The fair market value is entered directly by fieldstaff.
The modified cost value of land is entered directly by fieldstaff.
Long term liabilities: Long term liabilities are obligations having an original maturity exceeding 10 years. These include the following items:
real estate mortgages
Deferred portion land contracts
Other long term liabilities
Net farm income (NFI) from operations: The sum of the operator's share of gross sales plus net change in inventories less all expenses for items purchased, including interest paid and annual depreciation.
Net worth: The fair market value of assets less the amount of liabilities.
Soil Productivity Index: The average index representing the inherent productivity of all tillable land on the farm. Individual soil types are assigned an index ranging downward from 100.
Tenure: The proportion of the operator's owned acreage divided by the total acreage used in the farm operation.
Value of farm production (VFP): The total for cash value of sales of products and services, less the cost of purchased feed and livestock, plus the change in inventory values for grain and livestock, plus the change in accounts receivable, plus government payments, plus the value of farm products used on the farm.
Value of feed fed: Value of on the farm and commercial feed fed to livestock. The prices used for on the farm grains and pasture fed are standardized for all farms in the Illinois FBFM service. Commercial feeds are priced at the original cost.