[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ags/cudarb/123084.html
   My bibliography  Save this paper

Characteristics and Performance of New York Dairy Farms

Author

Listed:
  • Jack, Kevin E.
  • Knoblauch, Wayne A.
  • Novakovic, Andrew M.
Abstract
A combination of a more punitive policy situation and the greater range in size and financial performance in farms, especially across regions, has led to policy-makers focusing more on how new policies or policy proposals affect regions or types of farms, not just the national aggregates or average. While some new research is focusing on the implications of policy changes on farms in different areas and of different sizes, less has been done to improve how one goes about identifying and defining a "representative" farm. The basic objective of this study is to explore the relationship between structural, technical efficiency, and financial performance data for a large sample of New York dairy farms. To what extent are financial or technical performance related to farm size or some other structural characteristic? If we conclude that most highly profitable farms are large, for example, can we also infer that most large farms are highly profitable? Ultimately, we want to be able to improve how we go about defining and talking about "representative farms." This research provides an improved understanding of the differences between top performing and low performing dairy farms. Performance is measured by five financial criteria; four profitability and one cash flow measure. The distinction between high and low performance is specified as being in the top 25 percent versus the low 25 percent by financial performance criteria. As judged by the four profitability measures, top performers from the 387 specialized, large breed farms participating in the 1989 New York Dairy Farm Business Summary are significantly higher, in herd size, crop yields, net milk prices and milk sold per cow. Top performing farms are significantly lower in capital investment per cow, feed and crop expense per cwt. of milk, purchased feed per cwt. of milk, and labor and machinery costs per cow. The cash flow criterion provides fewer significant differences between low and high performing farms. The high performing farms average 170 cows and the low performing farms 70 cows. Of course, this does not mean that farms of 170 cows or so are necessarily more profitable than smaller farms. An analysis of 10 percent of the farms clustered around each herd size is conducted to determine if very large farms or very small farms bias the analysis. The comparison reveals significant differences exist between clusters for all four profitability measures, but not cash flow. However, milk sold per cow, feed costs, and non-feed costs are not significantly different. Within clusters, farms are ranked by return on investment, and differences between upper and lower ranking halves are analyzed. Significant differences are found in all four measures of profitability, but again, not in cash flow. Significant differences in performance exist in capital efficiency and machinery expense per cow for the 70 cow group and only in debt to asset ratio and com silage yield for the 170 cow group.

Suggested Citation

  • Jack, Kevin E. & Knoblauch, Wayne A. & Novakovic, Andrew M., 1992. "Characteristics and Performance of New York Dairy Farms," Research Bulletins 123084, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudarb:123084
    DOI: 10.22004/ag.econ.123084
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/123084/files/Cornell_Dyson_rb9209.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.123084?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Richardson, James W. & Lemieux, Catharine M. & Nixon, Clair J., 1983. "Entry Into Farming: The Effects Of Leasing And Leverage On Firm Survival," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 15(2), pages 1-7, December.
    2. Jack, Kevin E. & Novakovic, Andrew M., 1991. "New York Milk Production From 1979 to 1989: A County and Regional Analysis," EB Series 186180, Cornell University, Department of Applied Economics and Management.
    3. Richardson, James W., 1988. "Modeling of Economic Systems," Staff Reports 257913, Texas A&M University, Agricultural and Food Policy Center.
    4. Haden, Kimberly L. & Johnson, Larry A., 1989. "Factors Which Contribute To The Financial Performance Of Selected Tennessee Dairies," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(1), pages 1-8, July.
    5. Kauffman, Jonas B. III & Tauer, Loren W., 1986. "Successful Dairy Farm Management Strategies Indentified By Stochastic Dominance Analyses Of Farm Records," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(2), pages 1-10, October.
    6. Haden, Kimberly L. & Johnson, Larry A., 1989. "Factors Which Contribute to the Financial Performance of Selected Tennessee Dairies," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 21(1), pages 105-112, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lai, John & Olynk Widmar, Nicole J. & Gunderson, Michael A. & Widmar, David A. & Ortega, David L., 2018. "Prioritization of farm success factors by commercial farm managers," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(6), July.
    2. Foreman, Linda F. & Livezey, Janet S., 2003. "Factors Contributing To Financially Successful Southern Rice Farms," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35215, Southern Agricultural Economics Association.
    3. Short, Sara D., 2000. "Structure, Management, and Performance Characteristics of Specialized Dairy Farm Businesses in the United States," Miscellaneous Publications 330086, United States Department of Agriculture, Economic Research Service.
    4. El-Osta, Hirsham S. & Johnson, James, 1998. "Determinanats of Financial Performance of Commercial Dairy Farms," Technical Bulletins 184378, United States Department of Agriculture, Economic Research Service.
    5. Jeffrey Hyde & Lisa Holden & Richard Stup, 2008. "The Effect of Human Resource Management Practices on Farm Profitability: An Initial Assessment," Economics Bulletin, AccessEcon, vol. 17(12), pages 1-10.
    6. Winsten, Jonathan R. & Parsons, Robert L. & Hanson, Gregory D., 2000. "A Profitability Analysis Of Dairy Feeding Systems In The Northeast," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(2), pages 1-9, October.
    7. Mishra, Ashok K. & El-Osta, Hisham S. & Johnson, James D., 1999. "Factors Contributing To Earnings Success Of Cash Grain Farms," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(3), pages 1-15, December.
    8. repec:ebl:ecbull:v:17:y:2008:i:12:p:1-10 is not listed on IDEAS
    9. Babetskaya, Lyubov, 2001. "Enhancing The Performance Of Risk-Rating Models At Community Banks," 2001 Annual meeting, August 5-8, Chicago, IL 20690, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Shockley, Jordan M. & Osborne, William A. & Dillon, Carl R. & Pierce, Jerry S., 2016. "A Two-Tiered Benchmarking Analysis for Cost Management," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2016.
    11. Shockley, Jordan M. & Osborne, William A. & Dillon, Carl R. & Pierce, Jerry S., 2016. "A Two-Tiered Benchmarking Analysis for Cost Management," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2015, pages 1-14.
    12. Yeager, Elizabeth & Langemeier, Michael, 2009. "Measuring Sustained Competitive Advantage for a Sample of Kansas Farms," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2009, pages 1-12.
    13. El-Osta, Hisham S. & Mishra, Ashok K., 2005. "Dimensions of Wealth Dispersion Among Farm Operator Households: An Assessment of the Impact of Farm Subsidies," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 37(1), pages 187-208, April.
    14. Omobolaji Omobitan & Aditya R. Khanal, 2022. "Examining Farm Financial Management: How Do Small US Farms Meet Their Agricultural Expenses?," JRFM, MDPI, vol. 15(3), pages 1-15, March.
    15. Gloy, Brent A. & LaDue, Eddy L., 2002. "Financial Management Practices and Farm Profitability," 2002 Regional Committee NC-221, October 7-8, 2002, Denver, Colorado 132369, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    16. McBride, William D. & El-Osta, Hisham S., 2002. "Impacts of the Adoption of Genetically Engineered Crops on Farm Financial Performance," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(1), pages 175-191, April.
    17. Hisham S. El-Osta, 2020. "Life-Cycle and Its Impact on the Disparity in Economic Well-Being among U.S. Sole Proprietor Households: Evidence from Two National Surveys," Applied Economics and Finance, Redfame publishing, vol. 7(1), pages 1-14, January.
    18. Adhikari, Arun & Mishra, Ashok K. & Chintawar, Sachin, 2009. "Adoption of Technology and Its Impact on Profitability of Young and Beginning Farmers: A Quantile Regression Approach," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46830, Southern Agricultural Economics Association.
    19. McBride, William D. & Johnson, James D., 2004. "Approaches To Management And Farm Business Success," 2004 Annual meeting, August 1-4, Denver, CO 20131, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. El-Osta, Hisham S. & Morehart, Mitchell J., 1999. "Technology Adoption Decisions In Dairy Production And The Role Of Herd Expansion," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(1), pages 1-12, April.
    21. Morgan, Jeffery D. & Langemeier, Michael R., 2003. "Impact Of Farm Size And Type On Competitive Advantage," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35197, Southern Agricultural Economics Association.

    More about this item

    Keywords

    Livestock Production/Industries;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:cudarb:123084. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/dacorus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.