PROJECTED CASH FLOWS AND PROFITABILITY FOR REPRESENTATIVE LOUISIANA FARMS, 2001

Robert W. Boucher and Lonnie R. Vandeveer

No 31675, AEA Information Series from Louisiana State University, Department of Agricultural Economics and Agribusiness

Abstract: Changes in commodity prices and input costs along with adjustments in capital structure significantly affect farm cash flow requirements and whole farm profitability. These changes coupled with crop yield and price variability increase the need for farm business cash flow and profitability planning on a whole farm basis. Planning for profits is expected to affect both the short and long run success of the business and cash flow planning is expected to allow the manager to establish farm business cash needs for a specified period of time (production period) so that cash commitments are met as they come due. Furthermore, agricultural lenders have become increasingly concerned with loan repayment capacity and are placing relatively more emphasis on cash flow analysis in the loan evaluation process. In general, farm managers who develop cash flow and profitability projections should find it easier to justify and to secure adequate financing for their businesses. The purpose of this report is to supplement the series of annual cost projections for enterprises by providing profitability and cash flow projections for several whole farm situations throughout the state. Whole farm projections of returns and expenses are expected to provide information regarding the relative profitability of individual farming situations throughout the state. Estimates from cash flow projections provide information concerning the timing of cash flows and the distribution of cash flows for individual farm situations and comparison of estimates for these situations provide an indication of the relative cash flow positions of farms across the state. These projections are expected to be of value to farmers, agricultural credit agencies, extension personnel, researchers, and other professionals with an interest in the agricultural production industry. This report is organized into three general parts. Data sources and procedures used in the study are presented in the first section. In the second section, projected income and cash flow statements for representative farms in major crop producing areas of the state are presented and discussed. The final section summarizes the financial projections for representative farms considered in the study.

Keywords: Farm; Management (search for similar items in EconPapers)
Pages: 50
Date: 2001
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/31675/files/aea186.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:lsuais:31675

DOI: 10.22004/ag.econ.31675

Access Statistics for this paper

More papers in AEA Information Series from Louisiana State University, Department of Agricultural Economics and Agribusiness Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().