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Ties to the Land Succession Planning for Livestock (and other Ag.) Producers Bart Eleveld, OSU Extension Economist Private...
Outline for the day <ul><li>9:30 Registration/Check-In </li></ul><ul><li>10 am Case Example Ranch and Financial Analysis <...
Succession planning  ≠, > Estate Planning <ul><li>Need to think about what happens if you live as well as what happens if ...
Inventory of the Legacy: Case Study and Financial Analysis Of Future Alternatives  Dr. Bart Eleveld Extension Economist, F...
Ray and Reba Rancher <ul><li>Ray and Reba are mid 60’s, still active on ranch but moving towards retirement. </li></ul><ul...
Family Dynamics <ul><li>Ray and Reba want to ease into retirement but stay on ranch.  </li></ul><ul><ul><li>Have started d...
Current Financial Status <ul><li>Balance Sheet is pretty healthy but cash flow and income is tenuous. </li></ul><ul><li>Cu...
Balance Sheet (Details in hand-out)
 
Income and Cash Flow  (Details in Handout) YMMV !!!
Resources for Balance Sheet Income Statement & Cash Flow <ul><li>FINPACK financial analysis software </li></ul><ul><ul><li...
Prineville Keywords <ul><li>Mellow </li></ul><ul><li>O on h (brand?) </li></ul><ul><li>Blank—11several pasture </li></ul><...
Baker City Keywords <ul><li>Blank—(211wheat) </li></ul><ul><li>Blackbulls </li></ul><ul><li>Sam </li></ul><ul><li>Blank—(2...
Burns/Hines Keywords <ul><li>Covert </li></ul><ul><li>Steers </li></ul><ul><li>Rodeo1 </li></ul><ul><li>Plan </li></ul><ul...
Klamath Falls Keywords <ul><li>Blank—110 hay grain </li></ul><ul><li>Rabbit </li></ul><ul><li>BVR </li></ul><ul><li>Maxcat...
Eugene Keywords <ul><li>SLF </li></ul><ul><li>Symphony </li></ul><ul><li>Extension </li></ul><ul><li>Diamond2 </li></ul><u...
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Financial analysis of the future without a plan

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Transcript of "Financial analysis of the future without a plan"

  1. 1. Ties to the Land Succession Planning for Livestock (and other Ag.) Producers Bart Eleveld, OSU Extension Economist Private Lands Committee USDA—Risk Management Agency
  2. 2. Outline for the day <ul><li>9:30 Registration/Check-In </li></ul><ul><li>10 am Case Example Ranch and Financial Analysis </li></ul><ul><ul><li>Bart Eleveld, Oregon State University </li></ul></ul><ul><li>10:30 Succession Planning Process, Fair vs. Equal, Conflict Resolution </li></ul><ul><ul><li>Steve Hopkins and Doug Sippel, Titan Financial Associates </li></ul></ul><ul><li>11:15 Appraisal, Valuation Discount Issues </li></ul><ul><ul><li>Randy Guyer, CPA </li></ul></ul><ul><li>12 noon Lunch </li></ul><ul><li>12:30 Land Trusts </li></ul><ul><ul><li>Frank O’Leary, Oregon Rangeland Trust </li></ul></ul><ul><li>1 pm Legal Issues—LLC, FLP, Buy-Sell Agreements </li></ul><ul><ul><li>George Guyer, Attorney </li></ul></ul><ul><li>1:30 Charitable Remainder Trusts </li></ul><ul><ul><li>Harold Weight, Multiplan Financial Services </li></ul></ul><ul><li>2:15 Panel Discussion, Q&A </li></ul><ul><li>3:00 Closing and Evaluations </li></ul>
  3. 3. Succession planning ≠, > Estate Planning <ul><li>Need to think about what happens if you live as well as what happens if you die </li></ul><ul><li>How to transfer control, decision making and operation of the business if that is an objective </li></ul><ul><li>If the business is not to continue, who gets what, and when? </li></ul>
  4. 4. Inventory of the Legacy: Case Study and Financial Analysis Of Future Alternatives Dr. Bart Eleveld Extension Economist, Farm & Ranch Management Agricultural & Resource Economics Department
  5. 5. Ray and Reba Rancher <ul><li>Ray and Reba are mid 60’s, still active on ranch but moving towards retirement. </li></ul><ul><li>Reba had full-time job with no retirement benefits, Max had part-time job in winter. </li></ul><ul><li>3 children, aged 36 – 41. </li></ul><ul><li>800 Cow-calf pairs </li></ul><ul><li>400 ac. Irrigated alfalfa </li></ul><ul><li>100 ac. Winter wheat rotation crop </li></ul><ul><li>300 ac. Native grass hay (baled) </li></ul><ul><li>100 ac. Irrigated pasture </li></ul><ul><li>3500 ac. Deeded rangeland </li></ul><ul><li>4650 AUM Public rangeland pasture </li></ul>
  6. 6. Family Dynamics <ul><li>Ray and Reba want to ease into retirement but stay on ranch. </li></ul><ul><ul><li>Have started drawing SS </li></ul></ul><ul><ul><li>Fairly good health for now. </li></ul></ul><ul><li>Oldest son, Ray Jr. (41), joined ranch management after college graduation. </li></ul><ul><ul><li>Divorced from Rosie (39) and has 3 kids, aged 10 – 14. Oldest already works on ranch and wants in someday. </li></ul></ul><ul><li>Second son, Roy (37), has professional career in NYC, is estranged from family. </li></ul><ul><li>Daughter Rita Wrangler (36), married to Rudy who has professional, 6 figure income. </li></ul><ul><ul><li>Has daughter (12) who is interested in ranching. </li></ul></ul><ul><ul><li>Lives in town, but wants to have a house on the ranch. </li></ul></ul>
  7. 7. Current Financial Status <ul><li>Balance Sheet is pretty healthy but cash flow and income is tenuous. </li></ul><ul><li>Current ratio = 1.88 </li></ul><ul><li>Farm debt to asset ratio = 37% (33% total) </li></ul><ul><li>Farm equity to asset ratio = 63% </li></ul><ul><li>Rate of return on farm assets = 1.7% </li></ul><ul><li>Term debt coverage ratio = 103% </li></ul>
  8. 8. Balance Sheet (Details in hand-out)
  9. 10. Income and Cash Flow (Details in Handout) YMMV !!!
  10. 11. Resources for Balance Sheet Income Statement & Cash Flow <ul><li>FINPACK financial analysis software </li></ul><ul><ul><li>Center for Farm Financial Management @ U. of MN. </li></ul></ul><ul><ul><li>Does balance sheet plus feasibility and cash-flow budgeting for whole farm/ranch management plans </li></ul></ul><ul><ul><li>Free trial download available: </li></ul></ul><ul><ul><ul><li>http://www.cffm.umn.edu/ </li></ul></ul></ul><ul><ul><li>Can “rent” an annual license for ~ $100/yr. </li></ul></ul><ul><li>2 spreadsheet formats </li></ul><ul><ul><li>Montana State University’s </li></ul></ul><ul><ul><li>OSU/WSU Integrated Financial Statements </li></ul></ul><ul><ul><li>Both on Succession Workshop website: </li></ul></ul><ul><ul><ul><li>http:// arec.oregonstate.edu/succession.html </li></ul></ul></ul>
  11. 12. Prineville Keywords <ul><li>Mellow </li></ul><ul><li>O on h (brand?) </li></ul><ul><li>Blank—11several pasture </li></ul><ul><li>Alder </li></ul><ul><li>Blue & red </li></ul><ul><li>Key </li></ul><ul><li>Family </li></ul><ul><li>Lock & key </li></ul><ul><li>Saving the ranch </li></ul><ul><li>MAC </li></ul><ul><li>Angus1 </li></ul><ul><li>Midori </li></ul><ul><li>JCN </li></ul><ul><li>Ford250 </li></ul><ul><li>Sukey </li></ul>
  12. 13. Baker City Keywords <ul><li>Blank—(211wheat) </li></ul><ul><li>Blackbulls </li></ul><ul><li>Sam </li></ul><ul><li>Blank—(221 Potatoes/cattle) </li></ul><ul><li>Forty seven </li></ul><ul><li>Z </li></ul><ul><li>Blitz </li></ul><ul><li>Bing01 ?? </li></ul><ul><li>Kathryn </li></ul><ul><li>Sutton </li></ul><ul><li>10dalton </li></ul><ul><li>Badger </li></ul><ul><li>Busy </li></ul><ul><li>Gus </li></ul><ul><li>)( </li></ul><ul><li>HD </li></ul><ul><li>host (or Lost) </li></ul><ul><li>Red Rock </li></ul><ul><li>Dogger </li></ul><ul><li>Cooper </li></ul><ul><li>50 </li></ul>
  13. 14. Burns/Hines Keywords <ul><li>Covert </li></ul><ul><li>Steers </li></ul><ul><li>Rodeo1 </li></ul><ul><li>Plan </li></ul><ul><li>Family </li></ul><ul><li>Ruby </li></ul><ul><li>Lyle ??? </li></ul><ul><li>Rex </li></ul><ul><li>Cottonwood </li></ul><ul><li>Hank </li></ul><ul><li>CAB </li></ul><ul><li>Iris </li></ul><ul><li>Lester </li></ul><ul><li>Blank—420 cattle </li></ul><ul><li>Blank—420 beef </li></ul><ul><li>Meat hook </li></ul><ul><li>cattle </li></ul>
  14. 15. Klamath Falls Keywords <ul><li>Blank—110 hay grain </li></ul><ul><li>Rabbit </li></ul><ul><li>BVR </li></ul><ul><li>Maxcat </li></ul><ul><li>“ ?” </li></ul><ul><li>FPI </li></ul><ul><li>Blank—220 cattle </li></ul><ul><li>Tyler </li></ul><ul><li>Marie </li></ul><ul><li>Wheatgrass </li></ul><ul><li>Angus </li></ul><ul><li>Roseblossem </li></ul><ul><li>21 </li></ul><ul><li>Molly </li></ul><ul><li>Gramma </li></ul><ul><li>Hereford </li></ul>
  15. 16. Eugene Keywords <ul><li>SLF </li></ul><ul><li>Symphony </li></ul><ul><li>Extension </li></ul><ul><li>Diamond2 </li></ul><ul><li>Beef </li></ul><ul><li>G&C Farms </li></ul><ul><li>2 Horse </li></ul><ul><li>Blank—(411Beef/Timber) </li></ul><ul><li>Diamond </li></ul><ul><li>Heritage </li></ul><ul><li>Jake </li></ul><ul><li>Bellatrace </li></ul><ul><li>Hermitage </li></ul><ul><li>Douglas Fir </li></ul><ul><li>Ponderosa Pine </li></ul><ul><li>Oscar dog </li></ul><ul><li>Calpooia </li></ul><ul><li>Checkers </li></ul><ul><li>Kieth </li></ul><ul><li>Red1 </li></ul>
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