Representative Farm Models: Thompson Seedless Grapes Jay E. Noel - - PowerPoint PPT Presentation

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Dec 17, 2022 29 likes •192 views

Representative Farm Models: Thompson Seedless Grapes Jay E. Noel Director, California Institute for the Study of Specialty Crops, California Polytechnic State University Mechel Paggi Director, California Agribusiness Center, CSU, Fresno

SLIDE 1

Representative Farm Models: Thompson Seedless Grapes

Jay E. Noel Director, California Institute for the Study of Specialty Crops, California Polytechnic State University Mechel Paggi Director, California Agribusiness Center, CSU, Fresno

SLIDE 2

Representative Farm Model Overview

Representative farm is the size of operation

most likely to be in production in a given region.

NOT AVERAGE

Model’s Capabilities

A Decision Making tool
Policy Analysis
Market/Production Analysis

Several Interrelated Worksheets in Excel

Calculates Key Output Variables (KOVs)

SLIDE 3

Pro Forma Financial Worksheet

Income Statement 2005-2010

KOV: Net Income

Statement of Cash Flows

KOV: Cash Flow Position

Balance Sheet

KOV: Debt to Asset Ratio, Net Present Value,

Net Worth, Liquidity, etc

SLIDE 4

Representative Farm Models Capture Price and Yield Variability

Prices and Yields allowed to fluctuate around a

given mean forecasted price and yield for each year being simulated.

Based on forecasted mean price and yield and

historical price and yield variability.

Captures the yield and price risk involved in

agricultural production.

One hundred price and yield combinations are

selected around each year’s forecasted mean price and yield giving one hundred net revenue and cash flow estimates for each year in the simulation.

Allows for more “realistic” analyses

SLIDE 5

Thompson Seedless Model

Fresno Region 115 acres in production; 120 owned on farm Allows for any combination of Raisin and

Green production

Any percentage of Green production can be

contracted

Allows for either Well or District Water costs Can switch the mean yield between low,

medium, or higher yields (8.5,11,15 tons/acre)

SLIDE 6

Scenario Yields Tons/Acre

Year Low Green Yield Low Raisin Yield Medium Green Yield Medium Raisin Yield High Green Yield High Raisin Yield 2006

8.5 2.04 11.03 2.65 15.01 3.6

2007

8.5 2.04 11.03 2.65 15.00 3.6

2008

8.57 2.06 11.13 2.67 15.14 3.63

2009

8.59 2.06 11.15 2.68 15.18 3.64

2010

8.61 2.07 11.18 2.68 15.21 3.65

SLIDE 7

Scenario Prices $/Ton

Year Cash Market Green Price Contract Green Price Cash Market Raisin Price 2006 $99.00 $165.00 $929.60 2007 $99.00 $165.00 $939.40 2008 $99.00 $165.00 $950.28 2009 $99.00 $165.00 $960.75 2010 $99.00 $165.00 $971.25

SLIDE 8

Fresno Production Costs (numbers include overhead costs)

Raisin Cultural Costs ($/acre) Irrigate Well $121.00 Irrigate District $0.00 Fertilize $100.00 Weed Control $35.00 Insect/Disease Control $125.00 Lube and Repair $32.00 Growth Regulator $0.00 Labor $300.00 Fuel $35.00 Total Cultural Production Costs per acre $748.00 Raisin Harvest Costs ($/ton) Picking $123.00 Rolling $28.00 Box $12.00 Paper $25.00 Hauling $10.00 Turning $28.00 Total Harvest Costs per ton (Paper Drying) $226.00

Green Cultural Costs ($/acre) Irrigate Well $121.00 Irrigate District $0.00 Fertilize $50.00 Weed Control $20.00 Insect/Disease Control $125.00 Lube and Repair $32.00 Growth Regulator $0.00 Labor $300.00 Fuel $35.00 Total Cultural Costs per Acre $683.00 Green Harvest Costs Picking ($/acre) $200.00 Hauling ($/ton) $10.00

SLIDE 9

Loan Information

Land Loan

$200,000 principle remaining in 2005 at 7.5%

interest rate

Amortized over 15 years
Net Income accounts for interest payments
Cash Flow accounts for principle payments

Operating Loan

The interest on operating loans is built into

cultural costs.

SLIDE 10

UCD Production Costs

Raisin Cultural Costs ($/acre) Irrigate $121 Fertilize $8 Weed Control $9 Insect/Disease Control $64 Lube and Repair $32 Growth Regulator $0 Fuel $30 Labor $427 Total Cultural Costs ($/acre) $691 Raisin Harvest Costs ($/acre) Harvest $120 Bin Handling $173 Haul $11 Total Harvest Costs (Drying on vine) $304 Green Cultural Costs ($/acre) Irrigate $170 Fertilizer $16 Weed Control $80 Insect/Disease Control $97 Lube and Repair $13 Tie Vines $11 Labor $436 Fuel $70 Total Cultural Costs ($/acre) $893 Green Harvest Costs ($/acre) $345

SLIDE 11

Scenarios

Break Even Analyses Using Fresno Production Costs

50% Green 50% Raisin Production 0% Contracted Green

Production

Low Yields (8.5), Medium Yields (11), High Yields (15)
50% Green 50% Raisin Production 50% Contracted Green

Production

Low Yields, Medium Yields, High Yields
100% Green 0% Contracted Green Production
Low Yields, Medium Yields, High Yields

SLIDE 12

Net Income Break Even Analysis 50% Green 50% Raisin 0% Contracted Green Production

Low Yields Net Income

0.29 0.00 0.71 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

Medium Yields Net Income

0.06 0.00 0.94 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

High Yields Net Income

0.00 0.00 1.00 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

SLIDE 13

Net Income Break Even Analysis 50% Green 50% Raisin 50% Contracted Green Production

Low Yield Net Income

0.06 0.00 0.94 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

Medium Yield Net Income

0.00 0.00 1.00 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

High Yield Net Income

0.00 0.00 1.00 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

SLIDE 14

Net Income Break Even Analysis 100% Green 0% Contracted Green Production

8.5 tons/acre Net Income

0.79 0.00 0.21 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

11 tons/acre Net Income

0.70 0.00 0.30 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

15 tons/acre Net Income

0.41 0.00 0.59 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Net Income 2006

SLIDE 15

2010 Cash Flow Break Even Analysis 100% Green 0% Contracted Green Production

2010 Cash Flow 8.5 tons/acre

1.00 0.00 0.00 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cash Flow 2010

2010 Cash Flow 11 tons/acre

0.90 0.00 0.10 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cash Flow 2010

2010 Cash Flow 15 tons/acre

0.24 0.00 0.76 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cash Flow 2010

SLIDE 16

’06 – ’10 Net Present Value Break Even Analysis 100% Green 0% Contracted Green Production

Net Present Value 8.5 tons/acre

0.99 0.00 0.01 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% NPV

Net Present Value 11 tons/acre

0.76 0.00 0.24 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% NPV

Net Present Value 15 tons/acre

0.14 0.00 0.86 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% NPV