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A Comparison Of Minnesota'S Farm Business Management Association Members And The Usda'S Farm Costs And Returns Survey

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  • Andersson, Hans
  • Olson, Kent D.

Abstract

Many states have farm record associations which collect individual farm data. This data are used for research, extension, and teaching purposes. However, since membership in the associations is voluntary, the question arises whether the members are representative of the population of all farmers in that area. This study compares farm record data collected through the Southeastern and Southwestern Minnesota Farm Business Management Associations (FBMA) and data obtained through the USDA's Farm Costs and Returns Survey (FCRS). Both data sets were for 1987. By design, the FCRS survey is not subject to the self-selection bias that may occur in the FBMA data. The objectives of this study are to: (1) determine which farm characteristics are statistically the same in the FBMA and FCRS data, and (2) determine the farm size ranges in which FBMA farms are statistically representative of FCRS farms'. FBMA farms were not representative of all farms in their area. FBMA farms do not include small operations. Major differences exist in total tillable acreage, rented land and livestock production, especially hogs. These combined differences result in a substantial difference in net farm income between the two farm categories. However, the FBMA farms reflect FCRS farms' solvency conditions relatively well. FBMA farms were more similar to farms with sales exceeding $60,000 per year but differences still existed. Total acreage, total sales (especially sales of hogs), total expenses, and net farm income were significantly (p<.01) higher for FBMA farms. Even at higher sales levels, FBMA farms were characterized by a higher level of livestock production and a slightly larger tillable acreage mainly due to renting additional land. Economic performance measured by net farm income and returns to total assets and family labor also was significantly (p<.01) better for FBMA farms. So even though differences in assets, liabilities, and thus solvency positions were insignificant (p>.10), the economic performance of the FBMA farms appears to be better than FCRS farms even in larger sizes. On the basis of these findings, the FBMA data cannot be used to represent all farms or even all commercial farms. It does appear that FBMA farms can be used to represent larger farms with livestock. Thus, the FBMA data is not well-suited for estimation of economic relationships to be used in aggregate economic analyses of the agricultural sector.

Suggested Citation

  • Andersson, Hans & Olson, Kent D., 1992. "A Comparison Of Minnesota'S Farm Business Management Association Members And The Usda'S Farm Costs And Returns Survey," Economic Reports 13084, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaeer:13084
    DOI: 10.22004/ag.econ.13084
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    References listed on IDEAS

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    1. Bryan Schurle & Mike Tholstrup, 1989. "Farm Characteristics and Business Risk in Production Agriculture," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 11(2), pages 183-188.
    2. Olson, Kent D. & Tvedt, Douglas D., 1987. "On Comparing Farm Management Associations And The Farm Population," Staff Papers 13456, University of Minnesota, Department of Applied Economics.
    3. Schwab, Andrew & Raup, Philip M., 1988. "The Minnesota Rural Real Estate Market In 1987... With An Analysis Of Three Decades Of Land Price Changes," Economic Reports 13085, University of Minnesota, Department of Applied Economics.
    4. Tvedt, Douglas D. & Olson, Kent D. & Hawkins, Douglas M., 1989. "Short-Run Indicators Of Financial Success For Southwest Minnesota Farmers," Staff Papers 13933, University of Minnesota, Department of Applied Economics.
    5. Cole R. Gustafson & Elizabeth Nielsen & Mitchell J. Morehart, 1990. "Comparison of the Financial Results of Record-Keeping and Average Farms in North Dakota," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 12(2), pages 165-172.
    6. Steven T. Sonka & Robert H. Hornbaker & Michael A. Hudson, 1989. "Managerial Performance and Income Variability for a Sample of Illinois Cash Grain Producers," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 11(1), pages 37-47.
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    Cited by:

    1. Unknown, 1998. "Commodity Costs and Returns Estimation Handbook (entire book-condensed file)," Commodity Costs and Returns Estimation Handbook,, Iowa State University.
    2. Unknown, 1998. "References/Literature Cited," Commodity Costs and Returns Estimation Handbook,, Iowa State University.

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