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Dairy Farm Management And Long-Term Farm Financial Performance: Evidence From Panel Data

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  • Gloy, Brent A.
  • Hyde, Jeffrey
  • LaDue, Eddy L.

Abstract

The financial performance and relationships between several management factors and farm financial performance are examined in a panel data set of 107 New York dairy farms. The overall level of compound and annual return on assets of the farms considered in this study was quite low. However, the evidence clearly suggests that the most profitable and least profitable farms are consistently so. Correlations of the yearly rankings of farm profitability were always positive and significantly different from zero. Two regression models were estimated in an effort to identify management factors that influence profitability. In general, the models explain a relatively high degree of the variation in both compound return on assets and annual return on assets. These models tend to indicate that farm size, changes in farm size, and production management factors, such as milk production per cow, were positively related to farm profitability. While farm size was positively related to both compound return on assets and annual return on assets, the practice of undertaking expansions that were large relative to farm size was negatively related to compound return on assets.

Suggested Citation

  • Gloy, Brent A. & Hyde, Jeffrey & LaDue, Eddy L., 2001. "Dairy Farm Management And Long-Term Farm Financial Performance: Evidence From Panel Data," 2001 Annual meeting, August 5-8, Chicago, IL 20515, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20515
    DOI: 10.22004/ag.econ.20515
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    References listed on IDEAS

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    6. Rougoor, Carin W. & Trip, Ger & Huirne, Ruud B. M. & Renkema, Jan A., 1998. "How to define and study farmers' management capacity: theory and use in agricultural economics," Agricultural Economics, Blackwell, vol. 18(3), pages 261-272, May.
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    Cited by:

    1. Vandermersch, Mieke & Mathijs, Erik, 2002. "Do Management Profiles Matter? An Analysis of Belgian Dairy Farmers," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24832, European Association of Agricultural Economists.
    2. Douglas Jackson-Smith & David Trechter & Nate Splett, 2004. "The Contribution of Financial Management Training and Knowledge to Dairy Farm Financial Performance," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(1), pages 132-147.

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