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RSS By: Chris Barron

Chris BarronHave a margins question? Through this blog, you will gain insight into improving your bottom line, as a margins expert answers questions and provides farm business advice.

 

Crop Share Analysis Tools, Part 2

Feb 24, 2012

 

As discussed in the previous blog, I promised a tool for measuring two partners in a crop share arrangement. As crop share arrangements increase in popularity, the need for tracking tools quickly becomes apparent to the people involved. Every situation tends to be unique in its own way. Some partnerships may be 50-50; others may be 60-40, while others could be 70-30. There is no right or wrong way to form partnerships so long as the information is transparent.
Here is an example of a basic tool used for calculating production cost between two individuals. This same type of format could also be used to measure the value exchange between a landlord and a tenant.

 

Land…. Partnership Calculator
 
Complete yellow boxes
 
 
 
 
 
Individual 1
Individual 2
 
Price/Bush.
$5.79
Total Bush.
37,000
$5.72
$5.85
 
Yield
185
 
Total Bu.
18,500
18,500
 
Acres Total
200
 
 
100
100
 
 
Acre $$$
Total $$$
% cost
50%
50%
1
Land Rent
$300.00
$60,000
32%
$30,000
$30,000
2
Tax
 
$0
0%
$0
$0
3
mgt.
 
$0
0%
$0
$0
4
Int.
$12.00
$2,400
1%
$1,200
$1,200
5
Ins.
$25.75
$5,150
3%
$2,575
$2,575
6
Seeds
$110.82
$22,164
12%
$11,082
$11,082
7
Fert. Lime
$95.00
$19,000
10%
$9,500
$9,500
8
NH3
$126.55
$25,310
14%
$12,655
$12,655
9
Herb.
$22.87
$4,574
2%
$2,287
$2,287
10
Insect.
 
$0
0%
$0
$0
11
Mach.
$135.00
$27,000
15%
$13,500
$13,500
12
Dry/bu.
$0.25
$9,250
5%
$4,625
$4,625
13
Haul/bu.
$0.24
$8,880
5%
$4,440
$4,440
14
Stor./bu.
$0.04
$1,480
1%
$740
$740
 
 
per/ acre
Total cost
 
 
 
 
Total Cost
$926
$185,208
100%
$92,604
$92,604
 
Cost per / bu.
 
 
 
$5.01
$5.01
 
Total Income
 
 
 
$105,820
$108,225
 
Gross Return
 
 
 
$13,216
$15,621
 
Income per/ac.
 
 
$132.16
$156.21
 
ROI
 
 
 
14.3%
16.9%

 

 
If you're interested in getting a copy of this spreadsheet, send a request. I'd also encourage you to send me your comments and questions regarding this or any other type of tool for measuring, analyzing, or tracking your business.
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