Name: 

A farmer obtains 5 ton hay yields and 15 ton corn silage yields. His cash costs of production are $25 per ton of corn silage. One pound of hay will substitute for 2 lbs of corn silage and not affect rate of gain. What proportion of hay and silage should this farmer use in his cattle ration?

A rancher has $30,000 of operating capital. She can buy 35 steers or 300 feeder pigs to finish for market. Total production costs per head are estimated to be $45 for pigs and $175 for steers. She can sell the market hogs for $90 per head and the steers for $300 per head. Given an opportunity cost capital as 10%. She should:

If a feeder cattle producer had 100 head of 550 pound steers and could tell them for $50 per cwt or send them to a custom feedlot which guaranteed the feeder 50 cents per pound of gain. What price per cwt would the producer have to receive if he sent them to the feedlot in order to break even with the offer he had at $50 per cwt when they weighed 550 lbs? Assume he planned to feed them to a weight of 1000 pounds. Disregard the opportunity cost of capital, death loss and shrinkage.

A soybean producer is considering storing harvested soybeans in the local elevator for 6 months to obtain a high price. The price at harvest is $4.50 per bushel and the elevator charges $0.03 per bushel per month for storage. The farmer has 5000 bushels to sell and the appropriate interest rate is 12% per year while the soybeans are held in storage. How much must the price of soybeans increase over the six months in order for the farmer to cover storage and interest costs?

A lease between a landlord and a tenant is equitable if it:

Mr. Reed needs to purchase a new tractor with a purchase price of $28,000. His dealer will finance the tractor under the following terms. 10% down payment with the balance repaid in equal payments over the next three years. The interest rate is 10% per year. Mr. Reed expects the tractor to last for nine years and have a salvage value of $1000. How much interest will Mr. Reed pay in the first year of the loan?$

You operate a farmed owned by Big John who contributes land worth $185,000 and part of the operating expenses at $12,000. If you contribute your machinery at $50,000 and labor worth $15,000 as well as $47,000 for operating expenses, what would your share of the $250,000 gross income be if you share income according to your contribution?

You have borrowed $40,000 at a simple annual interest rate of 12% per annum for 4 years. Principal is to be repaid in four equal installments at the end of each year, with annual interest payable with the principal payment. The payment due at the end of the first year would be:

A grain sorghum producer is trying to decide the total cost of storing harvested grain in the local elevator for another three months. The elevator charges 4.0 cents per hundred weight per month for storage. Assume the opportunity cost of holding the grain in storage is 10% per year of the grains value ($3.00/cwt). What is the total cost per cwt of keeping the grain in storage for three months?

You sell 4 calves within average weight of 489 lbs for $92.25/cwt. You have 3% sales commission and $1.50 per head yardage charge. Your net amount received would be:

Based on the “Return to Investment” table below, if a farmer had $400 to invest in the present farming business, how much should he invest in machinery for the most net farm income?

Charlie is trading his ford for a John Deere. What is the basis (for tax purposes) of the John Deere tractor if Charlie traded in the ford tractor and gave $1,200 boot to a dealer? Original cost of the Ford tractor traded- $1,600. Depreciation taken on the Ford tractor traded -$5,000. Dealers’ price of the John Deere tractor $15,600

The price of a product moves from $100 to $90 and, as a result the quantity demanded increases from 50 to 60 units. From this we can conclude that:

A corn farmer at harvest time may find his basses 37 cents under the May future. In late April, he estimated that it would be 8 cents in May. His conclusion should be that he can profitably store the grain for:

Return to management is net cash farm income:

The Rogers farming has 2,000 bushels of corn (56 lbs corn per bushel) stored at a rented farm. They can sell it at  a local elevator for $2.60 per bushel. There is a hog feeding facility available on the farm, and the Rogers are considering the corn to the hogs. They can buy 50 lb feeder pigs for $0.70 per lb delivered to the farm. The Rogers will grind and mix their own hog feed. The ration consists of 80% corn and 20% commercial supplement delivered for $210 per ton. They would plan to market the hogs at 240 lbs. They expect a 3.8 to 1 feed conversion ratio.

How much feed supplement will they need to buy to mix with the 2,000 bushels of corn?

The Rogers farming has 2,000 bushels of corn (56 lbs corn per bushel) stored at a rented farm. They can sell it at  a local elevator for $2.60 per bushel. There is a hog feeding facility available on the farm, and the Rogers are considering the corn to the hogs. They can buy 50 lb feeder pigs for $0.70 per lb delivered to the farm. The Rogers will grind and mix their own hog feed. The ration consists of 80% corn and 20% commercial supplement delivered for $210 per ton. They would plan to market the hogs at 240 lbs. They expect a 3.8 to 1 feed conversion ratio.

Given the limited corn supply, how many pounds of gain (at 3.8 to 1) can they  get if they feed an 80-20 ratio.

The Rogers farming has 2,000 bushels of corn (56 lbs corn per bushel) stored at a rented farm. They can sell it at  a local elevator for $2.60 per bushel. There is a hog feeding facility available on the farm, and the Rogers are considering the corn to the hogs. They can buy 50 lb feeder pigs for $0.70 per lb delivered to the farm. The Rogers will grind and mix their own hog feed. The ration consists of 80% corn and 20% commercial supplement delivered for $210 per ton. They would plan to market the hogs at 240 lbs. They expect a 3.8 to 1 feed conversion ratio.

What is the feed cost per ton of feed using the 80-20 ration?

The Rogers farming has 2,000 bushels of corn (56 lbs corn per bushel) stored at a rented farm. They can sell it at  a local elevator for $2.60 per bushel. There is a hog feeding facility available on the farm, and the Rogers are considering the corn to the hogs. They can buy 50 lb feeder pigs for $0.70 per lb delivered to the farm. The Rogers will grind and mix their own hog feed. The ration consists of 80% corn and 20% commercial supplement delivered for $210 per ton. They would plan to market the hogs at 240 lbs. They expect a 3.8 to 1 feed conversion ratio.

The Rogers buy 175 feeder pigs weighing 50lbs and plan to feed them to 260 market weight. What is their total feed cost with the 3.8:1 feed conversation ratio:

The Rogers farming has 2,000 bushels of corn (56 lbs corn per bushel) stored at a rented farm. They can sell it at  a local elevator for $2.60 per bushel. There is a hog feeding facility available on the farm, and the Rogers are considering the corn to the hogs. They can buy 50 lb feeder pigs for $0.70 per lb delivered to the farm. The Rogers will grind and mix their own hog feed. The ration consists of 80% corn and 20% commercial supplement delivered for $210 per ton. They would plan to market the hogs at 240 lbs. They expect a 3.8 to 1 feed conversion ratio.

If costs other than feed or pigs were $25 per pig, what is the break even selling price?

The table below shows different combination of forage and grain that will produce 12,000 pounds of milk.


Which feed combination in the above table is the lowest cost combination if the forage is $60 per ton (3 cents per pound) and grain is $4 per hundred weight (4 cents per pound)

The table below shows different combination of forage and grain that will produce 12,000 pounds of milk



Which combination would you use if all prices in the previous question decreased by one-half?

The table below shows different combination of forage and grain that will produce 12,000 pounds of milk



Which feed combination in the table would you use if the price of forage is $60 per ton and the price of grain decreased to $3.00 per cwt. (.03 cents per lb.)

The table below shows different combination of forage and grain that will produce 12,000 pounds of milk.



Assume the price of grain is once again $4.00 per cwt. What price of forage per ton would make feed combination #1 best choice?

Mr. Rogers, a corn-hog farmer, had a profit and loss of $40,000 last year. The farm had an investment of $250,000. The farmer owed $100,000 and paid $10,000 interest. He values his labor and management at $15,000 (based on opportunity cost). The value of farm production was $1000,000. The farmer believes that his opportunity cost for his equity in the farm business is 10%. 

Were his financial returns to capital, labor and management satisfactory for this type of farm?

Mr. Rogers, a corn-hog farmer, had a profit and loss of $40,000 last year. The farm had an investment of $250,000. The farmer owed $100,000 and paid $10,000 interest. He values his labor and management at $15,000 (based on opportunity cost). The value of farm production was $1000,000. The farmer believes that his opportunity cost for his equity in the farm business is 10%. 

What was his total liabilities/ assets ratio for the farm?

Cash operating income                                                                               $90,000
Cash operating expence                                                                              $60,000
Inventory increase                                                                                       $9,000
Capital items purchased (cash boot)                                                            $11,000
Value of unpaid family labor                                                                       $
Interest on equity capital                                                                              $13,000
Real estate and machinery sold                                                                       NONE
Inventory decrease                                                                                        NONE
Farm produce used at home                                                                         $1,000

The return to labor, management and equity capital for this farm was:

Cash operating income                                                                               $90,000
Cash operating expence                                                                              $60,000
Inventory increase                                                                                       $9,000
Capital items purchased (cash boot)                                                            $11,000
Value of unpaid family labor                                                                       $
Interest on equity capital                                                                              $13,000
Real estate and machinery sold                                                                       NONE
Inventory decrease                                                                                        NONE
Farm produce used at home                                                                         $1,000

The farmer’s labor and management earnings were:

Purchasing a call option on corn means:

A farmer with a long position in the futures market:

Farmer places too high a value on his feeder cattle in his December 31 inventory. The rest of his yearly records are accurate. In his record book summary, livestock returns per $ 100 feed fed are:

A farmer has an opportunity to buy a new piece of machinery for $4,000 (no trade-in). He expects to depreciate the item out over three year period. He estimates that the opportunity cost of his money (or interest rate) IS 8%. He will set the salvage value of the piece at $700 at the end of the three year period.

The maximum straight line depreciation that the farmer can claim for each of the three years is (without any first year investment cost):

A farmer purchased a used tractor. The tractor cost $3000. He paid $1200 cash and financed the remainder for 6 months. His monthly payments for interest and principal was $316 per month. What rate of interest did the farmer pay on his loan?

A cattle feeder is interested in forward pricing (hedging) his cattle on feed which should be ready for market on August 1st. What action should the cattle feeder take in the futures market after he buys cattle?

A farmer plans on buying 70 tons of soybean meal in May of next year. The meal will be fed to the dairy herd throughout the year. It is now August and the farmer expects the price of soybean meal to increase greatly next May.

What should the farmer do to provide protection from the anticipated increasing price of soybean meal?

Mr. Mistake made an error in his record of livestock purchases. He wrote down a figure that was $1,000 to low. All other records were accurate. These livestock were not sold until the next year. In his year end summaries, his income, using the cash method is:

Agricultural prices are difficult to predict, yet they must be used in preparing farm budgets. Which of the following statements regarding price estimates is correct?