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| This is really hard to figure out in a cash poor asset rich industry. You also need to be more specific what part of ag you want to know about, crop inputs supply, livestock cash cropping? Location
Do you figure your ROI at the purchase price of your assets or current value? If you purchase assets that increase in value like land, does that count as ROI, I guess it depends on your definition. Do you avg over a year or commodity cycle period 10-15 years?
Many non ag industries that invest in riskier projects look for 10% cash return to be considered min if not 15% to invest in from the sidelines, but their is risks around those returns just like farming.
I have heard in production ag that the rule of 5x2, In other words min 5% cash return and 10% annual increase on hard assets should be the goal, but what do accountants and bankers know about farming? But it seems a lot of times farmers aim for at least breakeven at the worst of times and allow inflation to do the work along with a few lucky breaks in the markets and production of the commodity from time to time.
As time goes on and good help gets more and more difficult to find many of us may start to look at our labor/asset ROI.
Edited by grains-n-corn 10/22/2016 20:45
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Ag Business ROI?
