This study focuses on the analysis of an organic grass-fed ground beef from dairy-beef cross steers coming from AFEF. The grass fed beef enterprise was analyzed by adopting a UC Davis cost and returns study, modifying it to AFEF production limitations and conditions. Through partial budgeting analysis, opportunity costs were discovered leading to breakeven prices for the final grass fed ground beef product.

AFEF should begin the grass-fed beef enterprise as described in this analysis. Ground beef can safely be priced between the mean, $7.36, and one standard deviation above the mean, $8.55, given past experience by AFEF in value added health food enterprises. At these prices, the realized profit per steer is $1,094 and $1,616 respectively. When opportunity costs of raising less replacement heifers are analyzed, ($319/head), the income is $775 and $1,297 respectively. With this grass-fed beef enterprise, AFEF will be able to retain dairy bull calves and make a profit doing so.

The analysis of the projected budgets determined that the “normal” case scenario would cover the initial start-up cost around June of 2017. This would be within the 5-year period, and yield an internal rate of return was only 4.64%. The “worst” case scenario showed negative net incomes and over the time frame would only pay off 4.76% of the initial start-up cost. The internal rate of return was much lower at only 2.06%. The “best” case scenario projected that the initial start-up cost would in fact be paid in full by the end of February of 2014. The internal rate of return was 11,767.77% for the period of 2012 to 2017.

Prices and expenses for raising steer calves and stocker steers were collected from the Petan Ranch from the last ten years. Enterprise budgets for a cow-calf enterprise and a cow-calf-yearling enterprise were used. Based on the enterprise budgets, a partial budget was performed to determine which option is most likely to be profitable.

Using the partial budget, it was determined that selling all the steer calves shortly after weaning and running more cows is the most profitable option for the Petan Ranch.

These calculations were used on actual borrower information generously provided by Farm Credit West. All information that could divulge the identity of the borrower and any private business measures taken by Farm Credit West have been purposefully omitted from this report. This project used common credit risk ratios and values: Current Ratio, Debt-to-Equity, Loan-to-Value, and Debt Coverage Ratio. General credit analytics were implemented in determining the results of this project. The introduction and function of the Debt Capacity calculation and the Altman Z-Score were incorporated in the analysis, and played a large role in the conclusions of this project.

Problems began for the borrower in 2003 after a large conversion to long-term debt solved a liquidity issue, but resulted in more negative impacts for the borrower in later years. This conclusion was arrived at by employing the traditional agricultural credit analysis tools as well as the major Indicators previously mentioned: Debt Capacity calculation and Altman Z-Score. All of these calculations coincided very well to indicate when the borrower’s troubles began.

My recommendation is that agricultural lenders implement the Debt Capacity calculation and the Altman Z-Score into their credit analysis with their traditional calculations as a way to better mitigate credit risk. I also recommend more experiments be done on the effectiveness of these two new calculations in agricultural lending credit analysis.

The tools used to gauge whether or not a business of such kind would work are, the amount of compost that could theoretically be produced, which is an indirect reading of the demand for the product in the area, the net present value (NPV) of the business over a ten year span, and the internal rate of return (IRR) of the business while it produces this amount of compost over the ten years

It was found that the average composter size in the Central Valley produces 68,000 cubic yards of compost per year. Because of the space available to the known location and learning curve faults this number was dropped to 50,000 cubic yards. Producing these 50,000 cubic yards of compost creates a NPV of $228,228.41 and an IRR of 31%. Analyzing these numbers, a business such as this and located in the Central Valley, is in fact economically viable.

A SWOT analysis was performed based on the new location to determine the possibilities of entering the market. Following the SWOT analysis a profit loss statement was put together to organize all debt and desired equity of the project. A budget forecast was then based on the statement and was used to determine the breakeven year.

After all tests were done it was concluded that the project was not financially feasible in that the new location’s costs did not breakeven before the five year mark but in fact would take an estimated seven years to begin turning a profit.

The study suggests that the pumpkin butter be sold at a lower price to help establish brand recognition and a customer base. A market study needs to be completed, in addition to this analysis, in order to determine the demographic and potential mark-up percentage for retail at high-end grocery stores. The minimum batch would give a small inventory base that would allow for a market analysis of the first year of the enterprise. From there, the business would be able to better determine future inventory requirements and a reasonable retail sales price.

The purpose of this study was to determine if Dan’s Feed & Seed should re-open a pet supply store in the town of Hemet, California. The goal was to satisfy three objectives including if Dan’s Feed & Seed could compete in the current market, if there was a demand in Hemet, California, and if Dan’s could be profitable within a two year period. Dan’s proved to be able to compete with the competition by having lower prices with two out of three competitors and could compete with the remaining competitor by providing high quality, name brand dog food that the competitor did not carry. In determining the demand, a survey was distributed near the potential site location and the results showed that there was not a high demand due to the participant’s lack of a desire for a family owned business that did not offer lower prices than the top competitor in the survey. Pro-forma financial statements revealed that Dan’s Feed & Seed could be profitable in the first year of operation if they obtained the same percentage of the population’s income as the current Temecula and Sun City Dan’s Feed & Seed stores.

The author concluded the study by advising Dan’s Feed & Seed not to re-open a pet supply store based on the inability to meet all three objectives. The author also advised Dan’s Feed & Seed to consider evaluating other internal and external sources before determining their final decision.

Many survey respondents have interest in purchasing a gelato product; 66% and 64% of residents and non-residents expressed at least a moderate interest, respectively. Based on this interest and their stated frequency of visits to other scoop shops, estimated monthly sales for a retail gelato shop ranged from 6,454 to 21,299 scoops. At an assumed $3.50/scoop based on stated consumer willingness to pay, this could generate estimated annual revenues between $271,068 and $894,558. Based on the estimated sales volumes, the variable cost per unit sold would be $0.20, which would result in a gross margin of $3.30 per unit sold. The estimated annual income over key operating expenses of ingredient costs per batch, packaging and materials, monthly rent, utility, repair and maintenance, and labor expenses could generate between $229,178 and $484,796, depending on the amount of units sold per visit. Thus, a gelato scoop shop could be a feasible and profitable business in the Petaluma area, and further detailed study and development of a business plan appears justified. The values for demand and operating expenses listed in this project are initial estimates and a refined analysis is appropriate as a part of a more comprehensive business plan.