DAIRY FARM MANAGEMENT AND LONG-TERM FARM FINANCIAL PERFORMANCE: EVIDENCE FROM PANEL DATA

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

No 20515, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

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.

Keywords: Agricultural Finance; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 28
Date: 2001
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20515

DOI: 10.22004/ag.econ.20515

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