Rice Farming

Follow The Cash Flow

Spreadsheet helps rice growers project income/expenses
  

By Michael E. Salassi

The Projected 2008 Rice Farm Cash Flow Model was developed to assist producers in planning for the 2008 crop year.

The model is an Excel spreadsheet that allows rice producers to enter projected acreage, yield, market price and production cost data for 2008 to estimate net returns above variable production costs and to easily evaluate the impact of changing percent of base planted on net returns.

The primary purpose of the 2008 model is to evaluate the impact on net returns above variable production costs for alternative rice rental arrangements and percent of base acreage planted.

The cash flow model, which is applicable for any state, not just Louisiana, also includes entry cells for whole farm fixed expenses to estimate projected returns from rice production over all costs.

Data input
The Projected 2008 Rice Farm Cash Flow Model calculates projected net returns above variable production costs for a rice farm or specific tract of land of a specified acreage.

For each farm or tract, data to be entered into the model consist of estimates for the 2008 crop season, including rice acreage, base acres, percent of base planted, projected first crop and ratoon crop yields, program yields, projected prices and production costs.

Gross returns, variable costs and net returns are calculated for the farm or tract based upon the data entered. The first section of the cash flow model contains cells (shaded in blue) to enter data concerning projected 2008 rice acreage, production and market prices.

The second section of the model contains cells (shaded in blue) to enter data concerning projected variable rice production costs for the 2008 season. Costs are entered on a dollar per planted acre basis and should include the proportionate additional cost for any ratoon crop acreage.

Net return calculation
Based on the acreage, production, price and cost data entered, the model calculates net returns above variable costs (for the percent of base planted) on a per farm, per acre, per cwt. and per bbl. basis.

Net return estimates are also included at the upper portion of the spreadsheet (cells G4:J6) to allow for quick evaluation of the impact of changing percent of base planted on net returns above variable costs.

A copy of the entire model with a set of sample data entered is shown below. To receive a copy of the cash flow model via e-mail, contact Salassi at (225) 578-2713 or MSalassi@agcenter.lsu.edu.

Dr. Michael E. Salassi is a professor, Department of Agricultural Economics and Agri-business, LSU AgCenter, Baton Rouge, La.


Projected 2008 Rice Farm Cash Flow Model