FinPack: Farm and Ranch Financial Planning Tool

Finpack is a financial planning tool for all types of farms and ranches. Finpack (financial package) can do many analysis and planning functions. Some of these functions may be useful over the next few years.

Finpack was developed by the U of MN Extension Farm Management staff in 1972. It has been continually improved and updated since. Farmers, ranchers, lenders, extension staff and state farm business management associations have been its users. Three major tools are included in Finpack to assess profitability (income generation), liquidity (paying bills on time) and solvency (long-term net worth growth and security).

Finpack can be used to assess proposed major changes in a farm or ranch operation, project the profitability due to the change, analyze current financial situation and project long run and short run cash flows. The three parts of Finpack are FinLRB (what will be the financial outcome of farm or ranch changes), FinAN (where am I financially) and FinFLO (what are the cash flows of my plan). All three tools us a common set of farm records, beginning and ending balance sheets and crop and livestock budgets.

FinLRB utilizes the current operation and compares alternative farm plans for profitability, debt repayment and potential net worth growth. FinLRB can compare up to 15 alternatives to the current operation. FinFLO projects cash flow for one or multiple years based on plans for crop and livestock production, sales, capital purchases and sales, loan payments and family living draw. FinAN analyzes the financial performance of a farm or ranch business in past years. FinAN can complete a whole farm analysis or enterprise analysis.

Two other components are used in FinLRB, FinFLO and FinAN, namely balance sheets and enterprise budgets. The balance sheet must be first developed in order to utilize the rest of the Finpack tools.

AFAIK only I have been trained and used Finpack in recent years within Nebraska Extension. If you want more information about the program or want to utilize it for your own operation, email me at


Hay prices

I have been getting calls today regarding hay prices. It is early on in the hay sales season for new crop so only a little information is available. New crop grass hay that has not been rained on, has very few heads and is in small square bales will command a premium price. Those small square bales will sell to the horse industry and are currently priced at up to $6 per bale or $200 per ton. Large round bales are now priced in the range of $120-140 per ton. Remember that any defect in the hay, mold, heads, rain etc. will mean the price should be discounted.

2014 Annual Report of farm income, NFBI

In reading through the 2014 Whole State Nebraska Farm Business (NFBI) summary book, a few things struck me as interesting. As we all expected NFBI net farm income declined from 2013 to 2014. 2014 net farm income was on a par with that of 2008. “Income from crop sales dropped by almost 50% from $196,870 in 2014 to $99,925. At the same time those whose major income comes from both crops and beef rose from $84,907 in 2014 to $192,630 or an increase of 56%.”

Debt for the NFBI farms has increased year over year from 2004 to 2014 by over 100% to just over $1 million. No single category, short, intermediate or long term debt, has increased to add debt. All areas have increased including non-farm personal debt.

Family living expenses is calculated by NFBI and was reported as well. Total family living declined slightly from 2013 to 2014 but was in excess of $140,000. For the third year, out of pocket family living was just under $100,000. When going back to 1977 NFBI shows no period where a significant decline in family living has occurred.

2014 irrigated corn yield averaged 206.46 bushels with total cash cost of $3.64 and a total cost of $4.15. Nebraska Extension 2014 projected irrigated continuous corn production cost with 13 acre-inches of applied water and 215 yield projected cash cost $2.94 and total cost $4.74.

May 2015 Milk Production

This from the most recent US Milk Production report, USDA:

“May Milk Production up 1.4 Percent
Milk production in the 23 major States during May totaled 17.2 billion pounds, up 1.4 percent from May 2014. April revised production at 16.6 billion pounds, was up 1.8 percent from April 2014. The April revision represented an increase of 3.0 million pounds or less than 0.1 percent from last month’s preliminary production estimate.
Production per cow in the 23 major States averaged 1,990 pounds for May, 11 pounds above May 2014. This is the highest production per cow for the month of May since the 23 State series began in 2003.
The number of milk cows on farms in the 23 major States was 8.63 million head, 72,000 head more than May 2014, and 4,000 head more than April 2015.
May Milk Production in the United States up 1.4 Percent
Milk production in the United States during May totaled 18.4 billion pounds, up 1.4 percent from May 2014.
Production per cow in the United States averaged 1,971 pounds for May, 15 pounds above May 2014.
The number of milk cows on farms in the United States was 9.31 million head, 58,000 head more than May 2014, and 3,000 head more than April 2015.”

Dairy product change 2009-2014

5-Year Milk & Dairy Product Changes

US milk production in 2014 was 16.7 billion pounds, 8.8%, greater than 2009. Increased 2014 cheese production used 13.8 billion pounds of that milk. In the past 18 years year over year milk has increased 14 of 18 years. The four declines occurred in 1993, 1996, 2001 and 2009.

USDA recently published “Dairy Products 2014 Summary” which the Central Federal Milk Market Order (FMMO) administrator used to compare the change of US dairy product production over the past 5 years. The US is divided into three geographic regions, the Atlantic region includes state bordering the Atlantic Ocean plus Pennsylvania and West Virginia, the Central region from OH to AL to TX to ND and the West region consists of the states located in the Mountain and Pacific Time zones. US milk production increased 8.8% during the 5 year period with the Atlantic region up 6.7%, the Central region up 8.3% and the West region up 10.4%.

US cheese production rose 13.7% for the 2009-14 period. All three regions had increased cheese production, Atlantic +5.1%, Central + 11.3% and the West region +19%. The Central region accounted for 44.2% of 2014 while the West region produced 43.4% of 2014 US cheese production. Both the Atlantic and Central regions lost cheese market share, just under 2%, to the West region.

US butter production rose 18.1% from 2009-14. The Atlantic region production rose 28%, the Central 13.9% and the West 19.7%. US yogurt production rose 23.9% from 2009-14 with the Atlantic region seeing the largest percentage increase, 53.7%. US ice cream production declined 10.4% from 2009-14. The Central region which produces 55% of US ice cream lost 3.8% while the Atlantic region which has a 20% market share lost 19.6%. Over 2/3 of nonfat dry milk (NFDM) is produced in the Western region and increased 4.9% in total production from 2009-2014.

Blog purpose

Farm and ranch management is an important factor in the sustainability of both the farm and ranch business and the ability of the family to live the life they desire. This blog will periodically cover subjects of interest to SW Nebraska agriculture. Subjects will include topics like the 2014 Farm Bill, crop insurance, crop marketing, dairy economics and markets, ag related public policy and farm and ranch production economics.

I am a Nebraska Extension Educator delivering farm management education to Southwest and Western Nebraska. I also have a strong interest in dairy and livestock economics. I have been working in this area for over 20 years.

Occasionally you will see a picture of Minneapolis Moline machinery. I used some in my farming career which ended about 20 years ago.Featured image