Source: UNIV OF MINNESOTA submitted to
FINANCIAL AND ENVIRONMENTAL SUSTAINABILITY OF FARMS IN THE FUTURE
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
TERMINATED
Funding Source
Reporting Frequency
Annual
Accession No.
0090620
Grant No.
(N/A)
Project No.
MIN-14-022
Proposal No.
(N/A)
Multistate No.
(N/A)
Program Code
(N/A)
Project Start Date
Oct 1, 2011
Project End Date
Sep 30, 2016
Grant Year
(N/A)
Project Director
Olson, K.
Recipient Organization
UNIV OF MINNESOTA
(N/A)
ST PAUL,MN 55108
Performing Department
Applied Economics
Non Technical Summary
Farm management has always been and will always be a complicated and demanding task. The farm, whether it is a large commercial farm or a small subsistence farm, is surrounded by uncertainties, regulations, and changing conditions in a very competitive environment. Tomorrow's farm manager will have greater pressures than in the past due to greater financial requirements, increasing integration of the global economy, greater exposure to product and input price fluctuations, the development of new products, structural adjustments in the general economy, changes in and increasing government policies and regulations, an increasing world population with changing demographics, and greater instability in critical areas in the world. Other forces and trends affecting farmers now and into the future include climate change; developments in energy and bioenergy; biotechnology; societal concerns about the environment, animal welfare and farmers' methods of production; development of new production technologies; policy changes at all levels of government; labor availability; food safety; and how companies and institutions in the agribusiness value chain are responding to these same forces. In the midst of these forces, changes, and resulting uncertainties, farmers still need to make decisions that affect the financial and environmental sustainability of their farms. In the light of this need, this project will involve the study of the impacts of the forces, trends, and policies associated with new technologies, economy-wide structural adjustments, increased market volatility, new financial rules and regulations, climate change, energy, bioenergy, biotechnology, as well as other trends affecting farmers in the U.S. and around the world. The project has the aim of helping farmers (and those people, businesses, and agencies working with farmers) better understand the forces, trends, and policies affecting them; how best to take advantage of opportunities and minimize negative impacts resulting from these forces, trends, and policies; and how to adapt their farms to achieve private and public goals in the future.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
(N/A)
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60160303010100%
Goals / Objectives
1. Evaluate and estimate the impact of forces, trends, and policies affecting and identify opportunities to improve the financial and environmental sustainability of farms in both developed and developing countries. 2. Estimate the economic impact of alternative management, production, and financial strategies and increase our understanding of farmer economic behavior and likelihood of farmers adopting new strategies that offer greater financial and environmental sustainability. 3. Estimate farm level impacts of alternative policy proposals for typical farms and inform farmers, policymakers, communities, and the general public of these potential impacts on financial and environmental sustainability.
Project Methods
1. Financial sustainability will be evaluated by monitoring key variables and indicators of financial position and performance. This work will mainly involve the analysis of data in FINBIN, a farm record database collected and maintained by the Center for Farm Financial Management in the Department of Applied Economics at the University of Minnesota, external sources of data such as USDA's ARMS dataset, and international databases such as those available from CGIAR centers such as ILRI's data on crop residue use by crop-livestock farmers. Opportunities for improvement in sustainability will be identified and evaluated using static and dynamic economic models, econometric methods and strategic management analysis. 2. A subset of the management and production alternatives available to farmers will be chosen and analyzed based on the potential they hold to improve the financial and environmental sustainability of farmers. Analysis methods will include static and dynamic budgeting, mathematical programming, simulation models, risk analysis, econometric modeling, and other appropriate procedures. These alternatives will be evaluated and compared to current practices in terms of economic returns, social acceptability, and environmental concerns. Many of the projects within this objective have been and will continue to be multidisciplinary in nature. Another aspect of this objective is to understand better why farmers adopt or do not adopt new technologies and management strategies. We will work with growers to expand our qualitative knowledge and understanding of how they make decisions in diverse situations and conditions. 3. Important policy alternatives will be identified through review of published alternatives and discussion with agricultural and community leaders as well as federal and state leaders involved in farm policy. Base budgets and models of representative farm types in major production regions of Minnesota will be developed using data collected by farm business management associations; discussions with farmers and others involved in production; and other sources such as USDA data sets. These budgets and models will be used to estimate impacts of alternative policy proposals on the representative farms.

Progress 10/01/11 to 09/30/16

Outputs
Target Audience:Farmers; policy makers; agribusiness; financial institutions; academic researchers, teachers, and students Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest?Results have been reported through journal articles and manuscripts, extension fact sheets, blogs, press releases, popular media articles, professional talks, and phone discussions with media. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? This project has developed and continued to update a set of information on changes, trends, and issues that farmers can use to formulate their understanding of what the future holds and how they can best make their decisions to deal with that future. The project also continued the evaluation of characteristics explaining the differences in profitability between farms. In another part of the work, the project found that farmers in southern Africa and South Asia had a higher internal value of crop residue as mulch even though the more prevalent use of residue was for livestock feed. Another sub-project found a positive value for an extension program in increasing farmers' crop yields in southern Tanzania. Goal 1. Within this goal, I focused mainly on conditions and trends in the macro-environment, causes of change, and who is making strategic moves and how these are affecting farmers. I updated the information on trends and issues raised by these questions. In previous years, farm income and expense records were recorded and summarized for a set of farms in southern Minnesota. These reports were disseminated by departmental publications, press releases, and talks at various meetings. Goal 2. Within this goal, I continued my work on estimating farmers' internal value of crop residue (CR) used as feed and as mulch in smallholder mixed crop-livestock systems in Bangladesh, India, Malawi, Mozambique, and Zimbabwe. In general, the estimated shadow prices or internal values are higher for CR used as mulch compared to CR used as feed which did not support the null hypothesis. Thus, the high use of CR as feed was for reasons other than its value as feed compared to its value as mulch. This work is being revised for journal submission. Goal 3. With the new 2014 farm bill, the decisions that farmers need to make have changed. Analyses were made of farmers' choices under different price and yield alternatives. The results were presented through the media and in farmer meetings. This work was done in previous years for pervious farm bills.

Publications


    Progress 10/01/13 to 09/30/14

    Outputs
    Target Audience: Farmers; policy makers; agribusiness; financial institutions; academic researchers, teachers, and students Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? Results have been reported through journal articles and manuscripts, extension fact sheets, blogs, press releases, popular media articles, professional talks, and phone discussions with media. What do you plan to do during the next reporting period to accomplish the goals? Continue to update information, finalize data analysis, revise and resubmit manuscripts to research journals, prepare non-technical reports for media and general audiences.

    Impacts
    What was accomplished under these goals? This project has developed and continued to update a set of information on changes, trends, and issues that farmers can use to formulate their understanding of what the future holds and how they can best make their decisions to deal with that future. The project also continued the evaluation of characteristics explaining the differences in profitability between farms. In another part of the work, the project found that farmers in southern Africa and South Asia had a higher internal value of crop residue as mulch even though the more prevalent use of residue was for livestock feed. Another sub-project found a positive value for an extension program in increasing farmers' crop yields in southern Tanzania. Goal 1. Within this goal, I focused mainly on conditions and trends in the macro-environment, causes of change, and who is making strategic moves and how these are affecting farmers. I updated the information on trends and issues raised by these questions. Goal 2. Within this goal, I worked on three topics. In the first part, we continued evaluating why a high profit group of farmers was increasing in profit compared to the low profit group. The objective was to identify characteristics, practices and tendencies of the top income group that are different from the rest of the producers. We obtained data from a survey of members of SW Minnesota Farm Business Management Association. Analysis of the survey data showed that farms in the lower income group indicated they received more assets through inheritance than the top income group although the top group was more likely to have purchased their farm from relatives. Top income group members indicated they spent more time reading farm management educational material than the low income group. Other variables such as the amount of time spent on marketing and on projecting income and expenses were not significantly different between the two groups. Overall positive controllable factors included the farmers' attitude (that they controlled their destiny and had a bright future in farming); setting and striving for goals; wage: paying for good people; having a custom work enterprise (i.e., asset use efficiency); and having an environmental concern that affected decisions. Overall negative controllable factors included physical fitness; value of income statement; value placed on access to association staff; time spent increasing crop value; land; and having a nonfarm job for the primary decision maker. This work is being revised for journal submission. In a second part, I estimated farmers' internal value of crop residue (CR) used as feed and as mulch in smallholder mixed crop-livestock systems in Bangladesh, India, Malawi, Mozambique, and Zimbabwe. In general, the estimated shadow prices or internal values are higher for CR used as mulch compared to CR used as feed which did not support the null hypothesis. Thus, the high use of CR as feed was for reasons other than its value as feed compared to its value as mulch. This work is being revised for journal submission. In the third part of goal 2, we evaluated the impact of the Companion Village Project (CVP) on farmers' knowledge and adoption of improved crop production practices through the use of demonstration plots highlighting improved production practices and multiple educational presentations for farmers throughout the growing season. Local farmers managed the CVP plots. Local farmers were able to see the results and discuss the improved practices with local leaders and extension staff from the University of Iringa. Yields were measured on the plots and surveys were taken of participating and non-participating farmers. Crop yields were greater with the recommended improved production practices compared to conventional practices. The visibility of the improved practices and greater yields has resulted in adoption of the improved practices by more farmers in the region. This work was published at the Journal of International Agricultural and Extension Education. Goal 3. With the new 2014 farm bill, the decisions that farmers need to make have changed. Preliminary work was done in this reporting period preparing data and models to prepare information to help farmers make these decisions in late 2014 and early 2015.

    Publications

    • Type: Journal Articles Status: Published Year Published: 2014 Citation: Malima, Gabriel, Roger Blomquist, Kent Olson, and Mike Schmitt. 2014. The companion village project: An extension education tool for improving crop production. Journal of International Agricultural and Extension Education, 21(1):19-32. DOI: 10.5191/jiaee.2014.20102.


    Progress 01/01/13 to 09/30/13

    Outputs
    Target Audience: Farmers; policy makers; agribusiness; financial institutions; academic researchers, teachers, and students Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? Results have been reported through journal articles and manuscripts, blogs, press releases, popular media articles,professional talks, and phone discussions with media. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

    Impacts
    What was accomplished under these goals? This project has developed a set of information on changes, trends, and issues that farmers can use to formulate their understanding of what the future holds and how they can best make their decisions to deal with that future. The paper in this area discussed four major trends and issues: population growth, climate change, the global economy, and energy. The project also evaluated the characteristics explaining the differences in profitability between farms. In another part of the work, the project found that farmers in southern Africa and South Asia had a higher internal value of crop residue as mulch even though the more prevalent use of residue was for livestock feed. Another sub-project found a positive value for an extension program in increasing farmers’ crop yields in southern Tanzania. Goal 1. Within this goal, I focused mainly on conditions and trends in the macro-environment, causes of change, and who is making strategic moves and how these are affecting farmers. I discussed the trends and issues raised by these questions in terms of what we as economists can do to address them with our research and teaching and as decision makers in farms, businesses, government, non-government organizations, and academia. I started with four large trends and issues: population growth, climate change, the global economy, and energy. I also briefly discussed resource availability, environmental concerns, technology, supply chains, structural change, policy, and smallholder farming. For each issue, I suggested questions and needed analyses that we as economists could address and help farmers and many others deal with these changes and improve the likelihood of a better future. We economists have the tools and ability to help them answer these questions and help them build robust strategies that will allow them to change, survive, and prosper in a world that is always changing. This work is published in AgrEkon. Goal 2. Within this goal, I worked in three topics. In the first part, we continued evaluating why a high profit group of farmers were increasing in profit compared to the low profit group. The objective was to identify characteristics, practices and tendencies of the top income group that are different from the rest of the producers. We obtained data from a survey of members of SW Minnesota Farm Business Management Association. Analysis of the survey data showed that farms in the lower income group indicated they received more inheritance than the top income group although the top group was more likely to have purchased their farm from relatives. Top income group indicated they spent more time reading farm management educational material than the low income group. Other variables such as the amount of time spent on marketing and on projecting income and expenses were not significantly differently between the two groups. Overall positive controllable factors included the farmers’ attitude (that they controlled their destiny and had a bright future in farming); setting and striving for goals; wage: paying for good people; having a custom work enterprise (i.e., asset use efficiency); and having an environmental concern that affected decisions. Overall negative controllable factors included physical fitness; value of income statement; value placed on access to association staff; time spent increasing crop value; rented more land; and having a nonfarm job for the primary decision maker. This work is under review at the International Journal of Agricultural Management. In a second part, I estimated farmers’ internal value of crop residue (CR) used as feed and as mulch in smallholder mixed crop-livestock systems in Bangladesh, India, Malawi, Mozambique, and Zimbabwe. In general, the estimated shadow prices or internal values are higher for CR used as mulch compared to CR used as feed which did not support the null hypothesis. Thus, the high use of CR as feed was for reasons other than its value as feed compared to its value as mulch. This work is under review at Agricultural Systems. In the third part of goal 2, we evaluated the impact of the Companion Village Project (CVP) on farmers’ knowledge and adoption of improved crop production practices through the use of demonstration plots highlighting improved production practices and multiple educational presentations for farmers throughout the growing season. Local farmers managed the CVP plots. Local farmers were able to see the results and discuss the improved practices with local leaders and extension staff from the University of Iringa. Yields were measured on the plots and surveys were taken of participating and non-participating farmers. Crop yields were greater with the recommended improved production practices compared to conventional practices. The visibility of the improved practices and greater yields has resulted in adoption of the improved practices by more farmers in the region. This work is accepted at the Journal of International Agricultural and Extension Education. Goal 3. With the extension of the 2008 farm bill, the decision to participate in ACRE or DCP for the 2013 crop year was analyzed for farms in Minnesota incorporating the uncertainties of yield and price. The results showed some uncertainty but a greater probability of receiving a higher government payment if the famer signed up for DCP rather than ACRE. This was distributed in a blog and a press release and published in several media outlets.

    Publications

    • Type: Journal Articles Status: Accepted Year Published: 2013 Citation: Olson, K. 2013. Trends, issues, threats, and opportunities affecting farmers. Agrekon.


    Progress 01/01/12 to 12/31/12

    Outputs
    OUTPUTS: Kent Olson was on sabbatical from August 1, 2011, through July 31, 2012. He focused on issues surrounding managing the farm in the future. Since returning, he has been formulating reports and work but these have not been finalized nor published in 2012. Some results were disseminated through popular media such as newspapers, media interviews and oral presentations at meetings. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Farmers, policy makers, agribusiness, financial institutions, academic researchers and teachers. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

    Impacts
    Work is in progress so no outcomes or impacts are presented for 2012.

    Publications

    • No publications reported this period


    Progress 01/01/11 to 12/31/11

    Outputs
    OUTPUTS: Results were disseminated by newspaper articles, media interviews, paper and electronic reports, and oral presentations at several meetings. Reports are also available on the web. PARTICIPANTS: Dale Nordquist, Center for Farm Financial Management, University of Minnesota; Jim Kurtz, Rob Holcomb, Gary Hachfeld, David Bau, William Craig, and Don Nitchie are Extension, University of Minnesota, Kurtz and Nitchie are field representatives of the SW Assn; Garen Paulson is an employee and Froslan is an officer of the SW Assn. We attended the annual meetings of the American Agricultural Economics Association. TARGET AUDIENCES: Farmers, policy makers, agribusiness, financial institutions, academic researchers and teachers. Reports were mailed to audience members as well as posted on the web. Many articles were written and interviews made for the popular press. Oral presentations were made at many meetings of farmers, lenders, agribusiness, and academic meetings. Letters and reports with results of the analysis of policy alternatives were mailed, faxed, and called to elected representatives in Congress when done and again in a timely manner near vote times. PROJECT MODIFICATIONS: No major changes are anticipated.

    Impacts
    A new text book for farmers covering innovative and fundamental management tools was published. Average accrual net farm income was $322,165 in 2010 for the 97 farms included in this annual report of the Southwestern Minnesota Farm Business Management Association. Average earnings increased by 362% from $69,787 in 2009. Inflation adjusted profits rebounded after a downturn in 2009 that was caused primarily by low profits in the livestock sectors. Strong yields, substantially higher crop inventory values, and rebounding profitability of the livestock sectors led the way to much higher profits in 2010. Median net farm income, of the income earned by the middle farm, was $234,879, substantially lower than the average, indicating that the average was skewed by high profits of the most profitable farms. As is the case every year, incomes varied widely across the entire group. The average net farm income for the most profitable 20% of the farms was $819,795 while the least profitable 20% earner $62,563. To expand our understanding of forces affecting farmers, a series of articles were initiated examining agribusiness industries in the animal and animal product value chain and the challenges and opportunities resulting from various fundamental forces affecting them. The discussion was framed using the analytical concepts of value chains and Porter's Five Forces.

    Publications

    • Nordquist, D.W., J.N. Kurtz, D.L. Nitchie, G.J. Paulson, J.M. Froslan, and J.L. Woodford. 2011. 2010 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P11-4, Department of Applied Economics, University of Minnesota, St. Paul, MN.
    • Olson, K.D. 2011. Economics of Farm Management in a Global Setting. Hoboken, NJ: John Wiley & Sons, Inc., 542 p.
    • Olson, K., and Boehlje, M. 2011. Theme Overview: Fundamental Forces Affecting Agribusiness Industries, Part II. Choices, 26(1), available online: http://www.choicesmagazine.org.


    Progress 01/01/10 to 12/31/10

    Outputs
    OUTPUTS: Results were disseminated by journal articles, newspaper articles, media interviews, paper and electronic reports, and oral presentations at several meetings. Reports are also available on the web. PARTICIPANTS: Dale Nordquist, Center for Farm Financial Management, University of Minnesota; Thaddee Badibanga, Linh Vu, graduate students in Applied Economics Department; Jim Kurtz, Rob Holcomb, Gary Hachfeld, David Bau, William Craig, and Don Nitchie are Extension, University of Minnesota, Kurtz and Nitchie are field representatives of the SW Assn; Garen Paulson is an employee and Froslan is an officer of the SW Assn. We attended the annual meetings of the American Agricultural Economics Association. TARGET AUDIENCES: Farmers, policy makers, agribusiness, financial institutions, academic researchers and teachers. Reports were mailed to audience members as well as posted on the web. Many articles were written and interviews made for the popular press. Oral presentations were made at many meetings of farmers, lenders, agribusiness, and academic meetings. Letters and reports with results of the analysis of policy alternatives were mailed, faxed, and called to elected representatives in Congress when done and again in a timely manner near vote times. PROJECT MODIFICATIONS: No major changes are anticipated.

    Impacts
    A new text book for farmers covering innovative and fundamental management tools was published. Average accrual net farm income was $69,787 in 2009 for the 95 farms included in this annual report of the Southwestern Minnesota Farm Business Management Association. Average earnings decreased by 63% from $190,901 in 2008. This continues the downward trend that began in 2008 after six years of steady increases. As expected, low incomes for virtually all types of livestock operations pulled the average down, and some livestock farms sustained large losses. Crop farms, on average, were profitable but also earned much lower incomes compared to recent years. Median net farm income, or the income earned by the middle farm, was $96,130, substantially higher than the average. This indicates that the average was pulled down or skewed by large losses sustained by some farms. This is a reversal from previous years when large profits made by some farms pushed the average income above the median. As is the case every year, incomes varied widely across the entire group. The average net farm income for the most profitable 20% of the farms was $246,125 while the least profitable 20% lost $-192,897. Government payments accounted for 2% of gross cash farm income, down considerably from previous years. The farmer-members of the Association were surveyed about education, their attitudes towards management, their situation, and other potential reasons that would explain differences in farm success. The farmers were ranked on the basis of five year averages of net farm income per operator (NFI) and on rate of return to assets (ROA) and divided into the top 25% and the remaining 75% groups for each measure. Linear probability analysis was used to identify those variables influencing whether farms were in the top quartile for either NFI or ROA. Two variables had a positive impact for both NFI and ROA. First, the attitude of the farmer that they were, for the most part, in control of their own destiny and the value of the association newsletter which is information developed for the members specifically. Other attitudes or actions that farmers can control and that can have positive impacts include: setting and striving for goals, adapting new technology (as indicated by the precision farming variable), seeking information from their personal network, spending more time on record keeping, using their machinery for custom work, and working more hours per week. Attitudes and actions that have a negative effect (and that can be easily avoided) include: having a non-farm job (unless needed for other reasons), striving to have money as a simplistic motive, spending too much time on the internet (versus talking to their personal network), and seeking to have the most modern machinery. To expand our understanding of forces affecting farmers, a series of articles were initiated examining agribusiness industries and the challenges and opportunities resulting from various fundamental forces affecting them. The discussion was framed using the analytical concepts of value chains and Porter's Five Forces.

    Publications

    • Nordquist, D.W., J.N. Kurtz, Nitchie, D.L., G.J. Paulson, J.M. Froslan, and J.L. Christenson. 2010. 2009 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P10-2, Department of Applied Economics, University of Minnesota, St. Paul, MN.
    • Olson, K.D. 2011. Economics of Farm Management in a Global Setting. Hoboken, NJ: John Wiley & Sons, Inc., 542 p.
    • Olson, K., and Boehlje, M. 2010. Theme Overview: Fundamental Forces Affecting Agribusiness Industries. Choices, 25(4), available online: http://www.choicesmagazine.org.
    • Olson, K., Rahm, M., and Swanson, M. 2010. Market Forces and Changes in the Plant Input Supply Industry. Choices, 25(4), available online: http://www.choicesmagazine.org.


    Progress 01/01/09 to 12/31/09

    Outputs
    OUTPUTS: Results were disseminated by journal articles, newspaper articles, media interviews, paper and electronic reports, and oral presentations at several meetings. Results were sent to U.S. Senators and Representatives from Minnesota. Reports are also available on the web. PARTICIPANTS: Dale Nordquist, Center for Farm Financial Management, University of Minnesota; Thaddee Badibanga, Matt DalSanto, Linh Vu, graduate students in Applied Economics Department; Jim Kurtz, Rob Holcomb, Gary Hacfeld, David Bau, and William Craig are Extension, University of Minnesota, and representatives of the SW Assn; Garen Paulson is an employee of the SW Assn. We attended the annual meetings of the American Agricultural Economics Association. TARGET AUDIENCES: Farmers, policy makers, agribusiness, financial institutions, academic researchers and teachers. Reports were mailed to audience members as well as posted on the web. Many articles were written and interviews made for the popular press. Oral presentations were made at many meetings of farmers, lenders, agribusiness, and academic meetings. Letters and reports with results of the analysis of policy alternatives were mailed, faxed, and called to elected representatives in Congress when done and again in a timely manner near vote times. PROJECT MODIFICATIONS: No major changes are anticipated.

    Impacts
    Average accrual net farm income for the 99 farms included in the annual report of the Southwestern Minnesota Farm Business Management Association was $190,901 in 2008. In constant dollars, 2008 was the second most profitable year for association members in the last 20 years; 2007 was the first. Government payments of all types totaled $17,226 in 2008 which was up slightly from 2007 but only 2% of gross income in 2008. The report provides additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. The annual farm financial reports serve as a valuable reference and benchmark for the farmer-members, other farmers, bankers and lenders, and others involved in agriculture. The reports are very useful for explaining the current conditions of farmers to congressional members, legislators, media, and the public. They are used in classes here the University of Minnesota and at other schools. The technical, allocative, and scale efficiencies of farm households were estimated using a nonparametric, output-based data envelopment analysis (DEA) of a panel data set of Minnesota farms from 1993 to 2006. Initial technical efficiency assuming variable returns to scale (TEV) is estimated to be 0.83. Using single bootstrapping, the average bias-corrected TEV estimate is 0.70; using double bootstrapping, the TEV estimate is 0.72. Allocative efficiency is estimated to be 0.81. Scale efficiency is estimated to be 0.93. The only factor that is consistently associated with higher technical efficiency across analysis methods and years is larger farm size (as measured by the log of farm income). The significance of other factors changes with analysis methods. Farm family participants in a seminar on farm business transfer and estate planning gained increased understanding and a substantive percentage of participants reported completing and implementing a business transfer and personal estate plan as a result of attending a program seminar. Total outcome results of the program effort where there is an orderly plan for transfer of farm business and personal assets to the next generation affected $19,192,314 million or $286,452.44 per family for the 67 Minnesota farm families responding to the post-meeting follow-up evaluation in 2009. Targeted insecticide applications can provide effective M. persicae control in seed potato fields in the northern Great Plains while greatly lowering insecticide use and application costs overall: $4.22 per ha for border treatments versus a hypothetical $58.91 per ha for applying methamidophos to entire fields.

    Publications

    • Hachfeld, G.A., D.B. Bau, C.R. Holcomb, J.N. Kurtz, J.W. Craig, and K.D. Olson. 2009. Farm transition and estate planning: Farmers evaluations and behavioral changes due to attending workshops. Journal of Extension, 47(April 2009), available at http://joe.org/joe/2009april/pdf/JOE_v47_2a8.pdf
    • Carroll, M.W., E.B. Radcliffe, I.V. MacRae, D.W. Ragsdale, K.D. Olson, and T. Badibanga. 2009. Border Treatment to Reduce Insecticide Use in Seed Potato Production: Biological, Economic, and Managerial Analysis. American J. Potato Research 86(2009):31-37.
    • Nordquist, D.W., J.N. Kurtz, G.J. Paulson, J.L. Christenson, and J.M. Froslan. 2009. 2008 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P09-6, Department of Applied Economics, University of Minnesota, St. Paul, MN.
    • Olson, K., and L. Vu. 2009. Economic efficiency in farm households: trends, explanatory factors, and estimation methods. Agricultural Economics, 40(2009):587-599.


    Progress 01/01/08 to 12/31/08

    Outputs
    OUTPUTS: Results were disseminated by journal articles, newspaper articles, media interviews, paper and electronic reports, and oral presentations at several meetings. Results were sent to U.S. Senators and Representatives from Minnesota. Reports are also available on the web. PARTICIPANTS: Dale Nordquist, Center for Farm Financial Management, University of Minnesota; Thaddee Badibanga, Matt DalSanto, Linh Vu, graduate students in Applied Economics Department; Chris DiFonzo, Entomology, University of Michigan. Jim Kurtz and Rob Holcomb are Extension, University of Minnesota, and representatives of the SW Assn. Garen Paulson is an employee of the SW Assn. We attended the annual meetings of the American Agricultural Economics Association. TARGET AUDIENCES: Farmers, policy makers, agribusiness, financial institutions, academic researchers and teachers. Reports were mailed to audience members as well as posted on the web. Many articles were written and interviews made for the popular press. Oral presentations were made at many meetings of farmers, lenders, agribusiness, and academic meetings. Letters and reports with results of the analysis of policy alternatives were mailed, faxed, and called to elected representatives in Congress when done and again in a timely manner near vote times. PROJECT MODIFICATIONS: No major changes are anticipated.

    Impacts
    Average accrual net farm income for the 107 farms included in the annual report of the Southwestern Minnesota Farm Business Management Association was $242,267 in 2007. In constant dollars, 2007 was the most profitable year for association members in the last 20 years. Government payments of all types totaled $17,033 in 2007, a 48% decrease from 2006 which was a 43% decrease from 2005. The report provides additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. The annual farm financial reports serve as a valuable reference and benchmark for the farmer-members, other farmers, bankers and lenders, and others involved in agriculture. The reports are very useful for explaining the current conditions of farmers to congressional members, legislators, media, and the public. They are used in classes here the University of Minnesota and at other schools. Results from 4 annual surveys of soybean farmers on their IPM implementation and adoption for control of soybean aphids showed an improved understanding of soybean aphids and their impact on soybean growth and yield. Researchers and Extension educators are using the results of the survey of soybean farmers to evaluate their research and education programs. Estimates of potential government payments under alternative commodity programs in the new farm bill for 17 example farms in Minnesota under alternatives showed the adoption of the new ACRE program depended on whether commodity prices would fall considerably from current levels otherwise the countercyclical payment program was the best for the farmers. Unpublished work is concentrating on the economic and technical efficiency and total factor productivity of Minnesota farms. Farm size is positively correlated with higher efficiency and productivity but government subsidies are negatively related with farm productivity.

    Publications

    • Olson, Kent, and Matt DalSanto. 2008. "The New ACRE program: Beneficial or Not" Newsletter of the Minnesota Farm Business Management Association, June 2008, p. 6-7.
    • Olson, Kent, and Matthew DalSanto. Estimates of Minnesota farm-level crop commodity payments under new House framework. Staff Paper P08-4. St. Paul, MN: University of Minnesota, Department of Applied Economics, 2008.
    • Nordquist, D.W., J.N. Kurtz, R. Holcomb, and G.J. Paulson. 2007 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P08-2, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2008.
    • Olson, Kent; Badibanga, Thaddee; and DiFonzo, Christina. Farmers' Awareness and Use of IPM for Soybean Aphid Control: Report of Survey Results for the 2004, 2005, 2006, and 2007 Crop Years. Staff Paper P08-12, Department of Applied Economics, University of Minnesota, 2008.
    • Olson, Kent, and Matthew DalSanto. Provisions and potential impacts of the Average Crop Revenue Election (ACRE) Program. Staff Paper P08-7. St. Paul, MN: University of Minnesota, Department of Applied Economics, 2008.
    • Olson, Kent, and Matt DalSanto. 2008. "Should you enroll in ACRE" The Farmer, August 2008, page 12.
    • Olson, Kent, and Matt DalSanto. 2008. "The New ACRE program: Beneficial or Not" The Farmer, June 24, 2008, accessed on July 6, 2008 at http://the-farmer.com/bp.aspxascxid=fpStory&fpsid=34486&fpstid=2&pfv =1.


    Progress 01/01/07 to 12/31/07

    Outputs
    OUTPUTS: Results were disseminated by journal articles, newspaper articles, media interviews, paper and electronic reports, and oral presentations at several meetings. Results were sent to U.S. Senators and Representatives from Minnesota. Reports are also available on the web. PARTICIPANTS: Dale Nordquist, Center for Farm Financial Management, University of Minnesota; Thaddee Badibanga, Matt DalSanto, Linh Vu, graduate students in Applied Economics Department; Jennifer Skuza, Extension, and Charlie Blin, Natural Resources, University of Minnesota; Chris DiFonzo, Entomology, University of Michigan. Jim Kurtz, Rob Holcomb, and Lorin Westman are Extension, University of Minnesota, and representatives of the SE and SW Assns. Garen Paulson is an employee of the SW Assn. We attended the annual meetings of the American Agricultural Economics Association. Carl Johan Lagerkvist is an associate professor and Karin Larsen is a graduate student student at the Department of Economics, Swedish Agricultural University, Uppsala. TARGET AUDIENCES: Farmers, policy makers, agribusiness, financial institutions, academic researchers and teachers. Reports were mailed to audience members as well as posted on the web. Many articles were written and interviews made for the popular press. Oral presentations were made at many meetings of farmers, lenders, agribusiness, and academic meetings. Letters and reports with results of the analysis of policy alternatives were mailed, faxed, and called to elected representatives in Congress when done and again at timely manners near vote times. PROJECT MODIFICATIONS: No major changes are anticipated.

    Impacts
    Results suggest that reliance on off-farm income is associated with farm asset disinvestment; that there is rigidity in off-farm income reliance; and that factors explaining farm capital growth indirectly affect off-farm reliance. Financial performance was summarized for 2 record associations in southern Minnesota. Average accrual net farm income for 110 farms in the SW MN Farm Business Management Assn was $154,698 in 2006. Government payments of all types totaled $32,446 in 2006, a 43% decrease from 2005. Average accrual net farm income for 38 farms in the SE MN Farm Business Management Assn was $171,925 in 2006. Government payments of all types averaged $37,310 in 2006, a 33% decrease from 2005. The reports provide additional whole-farm and crop and livestock enterprise information. Surveys of farmers show an improved understanding of soybean aphids and the impact on soybean growth and yield. Results are reported from a survey of Extension Educators and their views of scholarship within their work. Potential payments under current federal farm policy are compared with major proposed alternative policies for 17 example farms in Minnesota. First, an historical comparison of crop revenue and estimated government payments for individual farms are made under each proposal from 2002-2005. Second, projections of crop revenue and government payments are made using historical yields for each farm, county, and nation; historical price data; and statistical distributions of the yields and prices. Using price projections close to the prices expected in the next few years, expected total government payments are similar for the most likely alternatives. Each of the proposals reduces risk by similar levels as measured by the variability of a farm's market revenue plus government payments compared to the expected total of market revenue. The annual farm financial reports serve as a valuable reference and benchmark for the farmer-members, other farmers, bankers and lenders, and others involved in agriculture. The reports are very useful for explaining the current conditions of farmers to congressional members, legislators, media, and the public. They are used in classes here the University of Minnesota and at other schools. Researchers and Extension educators are using the results of the survey of soybean farmers to evaluate their research and education programs. The survey of Extension Educators is helping them and Extension administrators understand the use of scholarship in their jobs and in improving the education provided Extension clientele. The analysis of alternative federal policy proposals has had considerable impact on the discussion of these alternatives. Unpublished work is concentrating on the efficiency and productivity of Minnesota farms. Results show that farms are highest in technical efficiency followed by scale and technical efficiency. Farm size is positively correlated with higher efficiency and productivity but government subsidies are negatively related with farm productivity.

    Publications

    • Lagerkvist, C.J., Larsen, K., and Olson, K.D. 2007. Off-Farm Income and Farm Capital Accumulation: A Farm-Level Analysis. Agricultural Finance Review, 67:241-257.
    • Nordquist, D.W., J.N. Kurtz, R. Holcomb, and G.J. Paulson. 2005 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P06-5, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2006.
    • Nordquist, D.W., and L.L. Westman. 2005 Annual Report: Southeastern Minnesota Farm Business Management Association. Staff Paper P06-6, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2006.
    • Olson, K. A Farm Bill for the Future: The Safety Net. _Agri News_, v.32, no.29, July 19, 2007.
    • Olson, K. Farm Bill Prospects. IN: Minnesota Applied Economist 719, Summer 2007. St. Paul, MN: University of Minnesota, Department of Applied Economics, 2007.
    • Olson, K. 2007 Farm Bill Will Likely Impact Farmland Values and Rents. Farmland in Perspective. Farmland in Perspective. Vol 28, No. 4. p1-3, 2007.
    • Olson, K; Badibanga, T.; and DiFonzo, C. Farmers Awareness and Use of IPM for Soybean Aphid Control: Survey Results for the 2004, 2005, and 2006 Crop Years. Staff Paper P07-13, Department of Applied Economics, University of Minnesota, 2007.
    • Olson, K., and DalSanto, M. Alternative Farm Bills: Impacts on Minnesota Farms. Staff Paper P07-5, Department of Applied Economics, University of Minnesota, 2007.
    • Olson, K., and DalSanto, M. Estimates of Minnesota Farm-level Crop Commodity Payments under Alternative Proposed Federal Policies. Staff Paper P07-15, Department of Applied Economics, University of Minnesota, 2007.
    • Olson, K. D., Skuza, J. A., Blinn, C. R. (2007). Extension Educators Views of Scholarship and Performance Evaluation Criteria. Journal of Extension [On-line], 45(4) Article 4RIB1. Available at: http://www.joe.org/joe/2007august/rb1.shtml


    Progress 01/01/06 to 12/31/06

    Outputs
    Nordquist et al. reported financial performance for 2 record associations in southern Minnesota. Average accrual net farm income for the 107 farms included in the annual report of the Southwestern Minnesota Farm Business Management Association was $147,862 in 2005. In constant dollars, 2005 was the most profitable year for SW Assn farmers in the past 20 years. Government payments of all types totaled $56,461 in 2005, a 103% increase from 2004. Average accrual net farm income for the 45 farms included in the annual report of the Southeastern Minnesota Farm Business Management Association was $116,688 in 2005. In constant dollars, 2005 was slightly less profitable than 2004 but still the second most profitable year for SE Assn farmers in the past 20 years. Government payments of all types averaged $55,750 in 2005, a 67% increase from 2005. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Porter et al. present an overview of the agronomic and economic impact of adopting organic production practices. In unpublished work, the second annual survey of soybean farmers on their IPM implementation and adoption for control of soybean aphids showed an improved understanding of soybean aphids and their impact on soybean growth and yield. Olson, Radcliffe, Badibanga, and Ragsdale report the results from a survey of seed potato producers in Minnesota and North Dakota that show a very strong, positive correlation between the use of crop borders to protect the seed from virus infection, specifically PVY, and the seed lot passing the winter test for PVY infection. The issues and conditions surrounding organic food are discussed in the book edited by Canavari and Olson. The 13 chapters cover topics on markets, marketing, demand, production, and policies as well as an overview of future issues. Olson, Skuza, and Blinn report the results of a survey of Extension Educators and their views of scholarship within their work. In other, yet unpublished work, programs related to farm transfer and estate planning were developed and presented to farmers; trends in Minnesota farms and factors related to those trends are presented and discussed; the risk and efficiency of holding farm and nonfarm assets were evaluated; the AGR-Lite insurance program was evaluated for Minnesota farmers; and the economic, technical, allocative, and scale efficiencies of Minnesota farms were estimated. A new project estimating the impact of alternative federal farm policies was started in 2006.

    Impacts
    The annual farm financial reports serve as a valuable reference and benchmark for the farmer-members, other farmers, bankers and lenders, and others involved in agriculture. The reports are very useful for explaining the current conditions of farmers to congressional members, legislators, media, and the public. They are used in classes here the University of Minnesota and at other schools. Researchers and Extension educators are using the results of the survey of soybean farmers to evaluate their research and education programs. The results of the survey of seed potato producers show the value of using crop borders to avoid virus infestations and to decrease the use of organophosphate insecticides. The survey of Extension Educators is helping them and Extension administrators understand the use of scholarship in their jobs and in improving the education provided Extension clientele. End of meeting evaluations have shown that the programs in farm transfer and in AGR-Lite insurance have been very valued by the farmers and their families attending.

    Publications

    • Canavari, M., and K. Olson, eds. Organic Food: Consumers' Choices and Farmers' Opportunities. New York: Springer, 2007.
    • Canavari, M., and K. Olson. Organic food: consumers' choices and farmers' opportunities: An introduction. In Organic Food: Consumers' Choices and Farmers' Opportunities. New York: Springer, p. v-viii, 2007.
    • Canavari, M., R. Ghelfi, K. Olson, S. Rivaroli. A comparative profitability analysis of organic and conventional farms in Emilia Romagna and in Minnesota. In Organic Food: Consumers' Choices and Farmers' Opportunities. New York: Springer, p. 31-46, 2007.
    • Mahoney, P.R., K.D. Olson, P.M. Porter, D.R. Huggins, C.A. Perillo, and R.K. Crookston. Profitability of Organic Cropping Systems in Southwestern Minnesota. In Organic Food: Consumers' Choices and Farmers' Opportunities. New York: Springer, p. 65-82, 2007.
    • Nordquist, D.W., J.N. Kurtz, R. Holcomb, and G.J. Paulson. 2005 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P06-5, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2006.
    • Nordquist, D.W., and L.L. Westman. 2005 Annual Report: Southeastern Minnesota Farm Business Management Association. Staff Paper P06-6, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2006.
    • Olson, K. Current issues in organic food: United States. In Organic Food: Consumers' Choices and Farmers' Opportunities. New York: Springer, p. 185-194, 2007.
    • Olson K.D., E.B. Radcliffe, T. Badibanga, and D.W. Ragsdale. Survey shows using crop borders increases probability of passing winter test for Potato Virus Y (PVY) in Seed Potatoes. Valley Potato Grower, April 2006, p. 18, 2006.
    • Olson K.D., J.A. Skuza, and C.R. Blinn. Extension Educators' Views of Scholarship and Performance Evaluation Criteria. Journal of Extension, 2007.
    • Porter P., D. Allan, K. Crookston, M. Harbur, K. Olson, and D. Wyse. Overview of the University of Minnesota Variable Input Crop Management Systems (VICMS) trials. In Long-term Field Experiments in Organic Farming, Raupp J., Pekrun C., Oltmanns M., and Kopke U. (eds.). Berlin: International Society of Organic Agriculture Research (ISFOAR), Scientific Series, p. 99-116, 2006.


    Progress 01/01/05 to 12/31/05

    Outputs
    Nordquist et al. reported financial performance for 2 record associations in southern Minnesota. Average accrual farm income for the 125 farms report in the annual report of the Southwestern Minnesota Farm Business Management Association was $98,362 in 2004. In constant dollars, 2004 was the third most profitable year for SW Assn farmers in the past 20 years. Government payments of all types totaled $27,798 in 2004, a 7.5% increase from 2003. Average accrual farm income for the 46 farms included in the annual report of the Southeastern Minnesota Farm Business Management Association was $113,462 in 2004. In constant dollars, 2004 was the most profitable year for SE Assn farmers in the past 20 years. Government payments of all types averaged $33,294 in 2004, a 4% increase from the previous year. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Olson and Badibanga report on 2 surveys. In the first of a series of annual surveys designed to track changes in IPM implementation and adoption over time, 742 farmers in Iowa, Michigan, and Minnesota were surveyed in early 2005. Overall, the farmers showed a fairly good understanding of soybean aphids and their impact on soybeans. 84% of the farmers said the most important information for making a decision to treat soybean aphids was scouting reports; 54% said plant growth stage was very important in their decision. In the second survey, seed potato producers in Minnesota and North Dakota were surveyed to assess their perception of the profitability and risks associated with using crop borders to manage PVY in seed borders and the likelihood that producers will continue to use crop borders or plan to do so in the future. Of the 23 producers who responded (a 25% response rate), 5 said they had used crop borders in 2004. Nine producers said they had tried using crop borders in the past but had quit using them. Those who were using crop borders indicated that damage caused by PVY infection was very important relative to other problems in seed potato production. Those producers who had used crop borders but had quit were more likely to say the damage was important than very important. Only those who were using crop borders agreed with the statement that using crop borders [fit] very well with my current production system. Those who had used crop borders but then quit disagreed with that statement. In other, yet unpublished work, the decision to treat for soybean aphids is found to be very sensitive to the infestation level and whether the population is growing or under control; future issues related to organic food in the U.S. are discussed; programs related to farm transfer and estate planning were developed; trends in Minnesota farms and factors related those trends are presented and discussed; the risk and efficiency of holding farm and nonfarm assets are evaluated; and an evaluation of the AGR-Lite insurance program was staarted. A new project evaluating the economic, technical, allocative, and scale efficiency of farm production over time was started in 2005.

    Impacts
    The annual farm financial reports are used by farmer-members and many others. Bankers use them to check their own numbers and to compare to their customers. Other farmers use them as a point of comparison for their own operations. People interested in investing in farmland use them to evaluate the potential returns. Companies use them to evaluate the potential profitability of their potential markets. The reports are very useful for explaining the current conditions to congressman, legislators, media, and the general public. They are used in classes here at the University of Minnesota and at other schools. The other work has generated considerable interest by many people and is useful for both management decisions and policy analysis.

    Publications

    • Nordquist D W, Kurtz J N, Holcomb R and Paulson G J. 2005. 2004 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P05-4, Department of Applied Economics, University of Minnesota, St. Paul, MN.
    • Nordquist D W and Westman L L. 2005. 2004 Annual Report: Southeastern Minnesota Farm Business Management Association. Staff Paper P05-5, Department of Applied Economics, University of Minnesota, St. Paul, MN.
    • Olson K and Badibanga T. 2005. Farmers Awareness and Use of IPM for Soybean Aphid Control: Results from the 2005 Survey. Staff Paper P05-13, Department of Applied Economics, University of Minnesota, St. Paul, MN.
    • Olson K and Badibanga T. 2005. Producers Use of Crop Borders for Management of Potato Virus Y (PVY) in Seed Potatoes. Staff Paper P05-14, Department of Applied Economics, University of Minnesota, St. Paul, MN.


    Progress 01/01/04 to 12/31/04

    Outputs
    Nordquist et al. reported financial performance for 2 record associations in southern Minnesota. Average accrual farm income for the 175 farms report in the annual report of the Southwestern Minnesota Farm Business Management Association was $96,404 in 2003. In constant dollars, 2003 was the most profitable year for SW Assn farmers since 1987. Government payments of all types totaled $25,855 in 2003, a 62 percent increase from 2002. Average accrual farm income for the 50 farms included in the annual report of the Southeastern Minnesota Farm Business Management Association was $85,669 in 2003. In constant dollars, 2003 was the most profitable year for SE Assn farmers since 1995. Government payments of all types averaged $31,195 in 2003, a 65 percent increase from the previous year. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Due to concerns about poor harvest conditions and lost yield in parts of Minnesota, Hachfeld et al. describe how to estimate indemnity payments from crop insurance. Using experimental data from 1990-1999 in southwestern Minnesota, Mahoney et al. found that, with premiums, the organic strategy in a 4-year rotation had net returns significantly higher than conventional strategies using both 2 and 4-year rotations. Without premiums, the net returns were statistically equal (p=0.05). Thus, the 4-year organic strategy was not less profitable nor its net return more variable than the conventional strategies in this study. Olson et al. is an analysis of reducing organophosphate use in seed potato production by scouting and treating only the field borders for aphids (versus the entire field) show a possible cost reduction of about $24 per acre.

    Impacts
    The annual farm financial reports are used by farmer-members and many others. Bankers use them to check their own numbers and to compare to their customers. Other farmers use them as a point of comparison for their own operations. People interested in investing in farmland use them to evaluate the potential returns. Companies use them to evaluate the potential profitability of their potential markets. The reports are very useful for explaining the current conditions to congressman, legislators, media, and the general public. They are used in classes here at the University of Minnesota and at other schools. The other work has generated considerable interest by many people and is useful for both management decisions and policy analysis.

    Publications

    • Mahoney P.R., Olson K.D., Porter P.M., Huggins D.R., Perillo C.A. and Crookston R.K., Profitability of Organic Cropping Systems in Southwestern Minnesota. Renewable Agriculture and Food Systems 19(1)(2004):1-12.
    • Hachfeld, G.A., Craven R., and Olson K. Estimating indemnity payments from crop insurance. Minnesota Extension Service, University of Minnesota, St. Paul, MN, August, 2004, http://www.extension.umn.edu/administrative/disasterresponse/componen ts/frost_indemnity.pdf.
    • Olson, K., Badibanga T., Radcliffe E., Carroll M., MacRae I., and Ragsdale D. Economic analysis of using a border treatment for reducing organophosphate use in seed potato production. Staff Paper P04-8, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2004.
    • Nordquist, D.W., Anderson R.D., Christensen J.L., Kurtz J.N., Paulson G.J., and Olson K.D. "2003 Annual Report: Southwestern Minnesota Farm Business Management Association." Staff Paper P04-6, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2004.
    • Nordquist, D.W., Westman L.L., and Olson K.D.. "2003 Annual Report: Southeastern Minnesota Farm Business Management Association." Staff Paper P04-5, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2004.


    Progress 01/01/03 to 12/31/03

    Outputs
    Olson (2004) is a new farm management textbook published in 2003. In addition to traditional farm management topics, this text covers new topics including strategic management, quality management, and some new techniques and tools in production and operations management. The chapters are The Scope of Farm Management, Strategic Management, Marketing Plan, Budgeting, Production and Operations Management, Quality Management and Control, Financial Analysis, Financial Management, Investment Analysis, Land Purchase and Rental, Risk Management, Production Contract Evaluation, Staffing and Organization, and The Future Farm Manager. A companion website includes lesson overviews, objectives, key terms, reading assignments, study notes, examples, worksheets, virtual field trips (complete with video and audio), and links to background material and other pertinent sites. Nordquist et al. reported financial performance for 2 record associations in southern Minnesota. Average accrual farm income for the 188 farms report in the annual report of the Southwestern Minnesota Farm Business Management Association was $70,007 in 2002. This was a sharp increase from the average of $36,614 in the previous year. Government payments of all types totaled $15,927 in 2002, a 67% reduction from 2001. Average accrual farm income for the 54 farms included in the annual report of the Southeastern Minnesota Farm Business Management Association was $64,666 in 2002, an increase of 6% from the previous year. Government payments of all types averaged $19,375 in 2002, a 50% reduction from the previous year. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Using experimental data from 1990-1999 in southwestern Minnesota, Mahoney et al. found that, with premiums, the organic strategy in a 4-year rotation had net returns significantly higher than conventional strategies using both 2 and 4-year rotations. Without premiums, the net returns were statistically equal (p=0.05). Thus, the 4-year organic strategy was not less profitable nor its net return more variable than the conventional strategies in this study. Olson et al. report the results of a farm and market survey for Hmong specialty crop farmers in the metro area. The median size of the surveyed farms was 3 acres. Forty-two percent of those farmers responding reported total farm product sales between $3,000 and $8,999. Many other survey results can be found in the report. In preliminary, unpublished analysis of reducing organophosphate use in seed potato production by scouting and treating only the field borders for aphids (versus the entire field) show a possible cost reduction of about $24 per acre, however, quantitative analysis of virus infection levels will not be known until after tests in winter 2004.

    Impacts
    The new text will introduce on-campus students and current farmers to new topics and methods for analyzing and improving their farm businesses. The annual farm financial reports are used by farmer-members and many others. Bankers use them to check their own numbers and to compare to their customers. Other farmers use them as a point of comparison for their own operations. People interested in investing in farmland use them to evaluate the potential returns. Companies use them to evaluate the potential profitability of their potential markets. The reports are very useful for explaining the current conditions to congressman, legislators, media, and the general public. They are used in classes here at the University of Minnesota and at other schools. The other work has generated considerable interest by many people and is useful for both management decisions and policy analysis.

    Publications

    • Mahoney, P.R., K.D. Olson, P.M. Porter, D.R. Huggins, C.A. Perillo, and R.K. Crookston. Profitability of organic cropping systems in southwestern Minnesota. Renewable Agriculture and Food Systems, In Press, 2004.
    • Nordquist, D.W., Anderson, R.D., Christensen, J.L., Kurtz, J.N., Paulson, G.J. and Olson, K.D. 2002 Annual Report of the Southwestern Minnesota Farm Business Management Association. Staff Paper P03-3, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2003.
    • Nordquist, D.W., Westman, L.L., and Olson, K.D. 2002 Annual Report of the Southeastern Minnesota Farm Business Management Association. Staff Paper P03-2, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2003.
    • Olson, K. Farm Management: Principles and Strategies. Ames, Iowa: Iowa State Press, 2004.
    • Olson, K., Yang, V., Tadesse, N., Chang, Y., Yang, N. and Lee, S. Results of a farm and market survey for Hmong specialty crop farmers in the Minneapolis, St. Paul metro area. Staff Paper P03-11, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2003.


    Progress 01/01/02 to 12/31/02

    Outputs
    Olson (2003) is a new farm management textbook delivered to the publisher in 2002 and will be available in summer 2003. This text includes new material not in traditional farm management texts such as strategic management, quality management, production and operations management, and production contract evaluation. The text also covers the traditional topics of budgeting, financial analysis and management, marketing, investment, land purchase and rental, risk management, staffing and organization. The text concludes with a discussion of the future farm manager. Olson et al. reported financial performance for 2 record associations in southern Minnesota. Average accrual farm income for the 207 farms report in the annual report of the Southwestern Minnesota Farm Business Management Association was $36,614 in 2001. The median or middle income was $29,040. This was a sharp drop from 2000 and 1999 but not as low as the extremely low levels of 1998. Government payments of all types totaled $48,208 per average farm in 2001-a slight decrease from $50,567 in 2000 but still higher than the $44,674 in 1999, $30,021 in 1998, and $12,257 in 1997. Average accrual farm income for the 59 farms report in the annual report of the Southeastern Minnesota Farm Business Management Association was $60,978 in 2001, down 21% from the previous year. The median or middle income was $31,577. Government payments of all types were $40,227 in 2001. They were $50,496 in 2000, $50,700 in 1999, $23,322 in 1998, and $12,907 in 1997. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Eidman and Olson examine farmers' risk management choices and alternatives and the evidence of their use by farmers. Westra, Easter, and Olson evaluate the impacts of alternative policies for reducing phosphorus loading from farmland. Other, as yet, unpublished work included risk and profitability of organic farming (with P. Mahoney, P. Porter, D. Huggins, C. Perillo, and K. Crookston) and the impacts on precision agriculture on rates of return to farming (with P. Elisabeth).

    Impacts
    The new text will introduce on-campus students and current farmers to new topics and methods for analyzing and improving their farm businesses. The annual farm financial reports are used by farmer-members and many others. Bankers use them to check their own numbers and to compare to their customers. Other farmers use them as a point of comparison for their own operations. People interested in investing in farmland use them to evaluate the potential returns. Companies use them to evaluate the potential profitability of their potential markets. The reports are very useful for explaining the current conditions to congressman, legislators, media, and the general public. They are used in classes here at the University of Minnesota and at other schools. The other work has generated considerable interest by many people and is useful for both management decisions and policy analysis.

    Publications

    • Eidman, V. and K.D. Olson. "Risk management: From the Researcher to the Farmer." In Economic Studies on Food, Agriculture and the Environment. Edited by Maurizio Canavari, Paolo Caggiati, and K. William Easter, New York, NY: Kluwer Academic/Plenum Publishers, 2002.
    • Olson, K. Farm Management: Principles and Strategy. Ames, Iowa: Iowa State Press, forthcoming 2003.
    • Olson, K., and P. Elisabeth. "An economic assessment of the whole-farm impact of precision agriculture," Proceedings of the 6th International Conference on Precision Agriculture, Minneapolis, Minnesota, forthcoming 2002.
    • Olson, K.D., Weness, E.J., Anderson, R.D., Christensen, J., Fales, P.A., and Nordquist, D.W. . 2001 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P02-05, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2002.
    • Olson, K.D., Westman, L.L., and Nordquist, D.W. . 2001 Annual Report: Southeastern Minnesota Farm Business Management Association. Staff Paper P02-04, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2002.
    • Westra, J.V., K.W. Easter, and K.D. Olson. "Targeting Nonpoint Source Pollution Control: Phosphorus in the Minnesota River Basin." Journal of the American Water Resources Association. Vol. 38, No. 2, p.493-505, April 2002.


    Progress 01/01/01 to 12/31/01

    Outputs
    Olson (2001) explains the basic process of strategic management for farmers: evaluation of both the external business environment and the internal situation as well as developing a vision and mission, setting objectives, crafting and testing a strategy for your farm, implementing that strategic plan, evaluating performance, and making corrective adjustments, as needed. Olson et al. reported financial performance for 2 record associations in southern Minnesota. Average accrual farm income for the 212 farms report in the annual report of the Southwestern Minnesota Farm Business Management Association was $81,750 in 2000. The median or middle income was $69,414. This is the second annual increase from the extremely low levels of 1998. Government payments of all types increased again to $50,567 per average farm in 2000-an increase from $44,674 in 1999, $30,021 in 1998, and $12,257 in 1997. Average accrual farm income for the 58 farms report in the annual report of the Southeastern Minnesota Farm Business Management Association was $77,672 in 2000, up 17% from the previous year. The median or middle income was $39,675. Government payments of all types were $50,496 in 2000. They were $50,700 in 1999, $23,322 in 1998, and $12,907 in 1997. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Eidman and Olson examine farmers' risk management choices and alternatives and the evidence of their use by farmers. Other, as yet, unpublished work included risk and profitability of organic farming (with P. Mahoney, P. Porter, D. Huggins, C. Perillo, and K. Crookston), and evaluation of the impacts of policy alternatives for reducing phosphorus loading from farmland (with J. Westra and W. Easter).

    Impacts
    The annual farm financial reports are used by farmer-members and many others. Bankers use them to check their own numbers and to compare to their customers. Other farmers use them as a point of comparison for their own operations. People interested in investing in farmland use them to evaluate the potential returns. Companies use them to evaluate the potential profitability of their potential markets. The reports are very useful for explaining the current conditions to congressman, legislators, media, and the general public. They are used in classes here at the University of Minnesota and at other schools. The other work has generated considerable interest by many people.

    Publications

    • Eidman, V. and K. Olson. Risk management: From the researcher to the farmer. Chapter 12 in Economic Studies on Food, Agriculture, and the Environment. Bologna, Italy: University of Bologna, Faculty of Agriculture, p.217-234, 2001.
    • Olson, K.D., Christensen, J., Weness, E.J., Anderson, R.D., Fales, P.A., and Nordquist, D.W. 2000 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P01-02, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2001.
    • Olson, K.D., Westman, L.L., and Nordquist, D.W. 2000 Annual Report: Southeastern Minnesota Farm Business Management Association. Staff Paper P01-03, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2001.
    • Olson, K.D. A Strategic Management Primer for Farmers. Staff Paper P01-15. St. Paul, MN: University of Minnesota, Department of Applied Economics, 2001.


    Progress 01/01/00 to 12/31/00

    Outputs
    This work was under the AREERA plan of work goal #1. Olson et al. reported financial performance for 2 record associations in southern Minnesota. Average accrual farm income for the 216 farms report in the annual report of the Southwestern Minnesota Farm Business Management Association was $43,762 in 1999, up from $8,616 in the previous year. Government payments of all types were $44,674 in 1999 which was 102% of the average accrual farm income for the southwestern association. Average accrual farm income for the 62 farms report in the annual report of the Southeastern Minnesota Farm Business Management Association was $66,412 in 1999, up 1% from the previous year. Government payments of all types were $50,700 in 1999 which was 76% of the average accrual farm income for the southeastern association. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Olson presented ideas on alternatives that farmers are implementing to survive in the future. Other, as yet, unpublished work included explanation and examination of risk management choices and alternatives available and evidence of their use by farmers (with V. Eidman), risk and profitability of organic farming (with P. Mahoney, P. Porter, D. Huggins, C. Perillo, and K. Crookston), and evaluation of the impacts of policy alternatives for reducing phosphorus loading from farmland (with J. Westra and W. Easter).

    Impacts
    The annual farm financial reports are used by farmer-members and many others. Bankers use them to check their own numbers and to compare to their customers. Other farmers use them as a point of comparison for their own operations. People interested in investing in farmland use them to evaluate the potential returns. Companies use them to evaluate the potential profitability of their potential markets. The reports are very useful for explaining the current conditions to congressman, legislators, media, and the general public. They are used in classes here at the University of Minnesota and at other schools. The other work has generated considerable interest by many people.

    Publications

    • Olson, K.D., Anderson,R.D., Christensen, J., Weness, E.J., Fales, P.A., and Nordquist, D.W. . 1999 Annual Report: Southwestern Minnesota Farm Business Management Association. Staff Paper P00-02, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2000.
    • Olson, K.D., Westman, L.L., and Nordquist, D.W. . 1999 Annual Report: Southeastern Minnesota Farm Business Management Association. Staff Paper P00-01, Department of Applied Economics, University of Minnesota, St. Paul, MN, 2000.
    • Olson, K. The farm manager of the future. In Ostlie, K, Cavanaugh, T. Benson. 1999 Annual Crop Pest Management Short Course Proceedings, Ostlie K., and K. Cavanaugh, eds. Extension Service, University of Minnesota, St. Paul, 2000, p.69-74.


    Progress 01/01/99 to 12/31/99

    Outputs
    Olson et al. report financial performance records for 2 record associations in southern Minnesota. Average accrual farm income in the Southeastern Association was $65,739 in 1998, down 12% from 1997. In the Southwestern Association average accrual farm income was $8,616 in 1998, down 79% from 1997. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Due to continuing low prices, Olson projected income for 1999 and spent considerable time presenting and discussing these income estimates and management alternatives at various meetings and with many members of the media. Olson also presented ideas on alternatives that farmers are implementing to survive in the future; a paper will be published in 2000. Uhlin and Olson discuss agriculture being an almost- constant cost industry and the implications for policy and farmers' decisions.

    Impacts
    Income information was very useful to explain to congresssmen, legislators, media and the general public the drop in farm income.

    Publications

    • Olson, K.D. Mixed news from 1998 farm records. Minn Ag Economist 696, St. Paul, MN: U of MN Ext Serv, Dept of App Econ, 1999.
    • Uhlin, H.-E., Olson, K.D. Agriculture as an almost-constant-cost industry: evidence and implications. In Rev of Ag Econ 21 (2) Fall-Winter 1999, pp. 409-23.
    • Olson, K.D., Christensen, J., Weness, E.J., Anderson, R. Fales, P.A. and Nordquist, D.W. 1999. 1998 Annual Report of the Southwestern Minnesota Farm Business Management Association. Staff Paper P99-2, Dept of App Econ, U of Minnesota, St. Paul, MN.
    • Olson, K.D., Westman, L. and Nordquist, D.W. 1999. 1998 Annual Report of the Southeastern Minnesota Farm Business Management Association. Staff Paper P99-3, Dept of App Econ, U of MN, St. Paul.
    • Olson, K.D. Controlling soybean production costs. In Minnesota Soybean Field Book, M. Bennett, D. Hicks, and S.L. Naeve, eds., Minnesota Extension Service, U of MN, 1999, p. 16-26.
    • Olson, K.D. Trends in production costs for corn and soybeans in Minnesota. In 1998 Minnesota crop pest management short course; proceedings of a conference for professional agriculturalists, Nov. 23-24, 1998, K. Ostlie, K. Cavanaugh and T. Benson, eds., St. Paul, MN: U of MN Ext Serv, 1999, pp.166-70.


    Progress 01/01/98 to 12/31/98

    Outputs
    Olson et al. report financial performance records for 2 record associations in southern Minnesota. Average accrual farm income in the Southeastern Association was $73,311 in 1997, up 8.5 percent from 1996. In the Southwestern Association average accrual farm income was $40,598 in 1997, down 35 percent from 1996. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Due to dropping product prices, Olson (1998a) estimated in August how ow income may fall and then made a revised estimate in October (Olson, 1998b,c). In August, Olson presented the early estimate at a hearing of the Agriculture Committee of the Minnesota House. Olson, Nordquist and Weness describe several financial management alternatives for farmers facing low incomes. Considerable time has been spent presenting and discussing these income estimates and management alternatives at various meetings and many members at the media. Ohlmer et al. found that farmers need more and with better information and assistance in the processes of problem detection and finding ideas for options. To improve farmers' creativity in idea generation, it is important to improve farmers' ability and motivation. Farmers' low interest in information management services and tools can be explained by their design for quantifying versus qualitative farmers. Farmers prefer incremental adoption and small scale tests of alternatives.

    Impacts
    (N/A)

    Publications

    • Olson, K.D., Weness, E.J., Christensen, J., Anderson, B., Fales, P.A. and Nordquist, D.W. 1998. 1997 Annual Report of the Southwestern Minnesota Farm Business Management Association. Staff Paper P98-3, Dept of App Econ, U of Minnesota, St. Paul, MN.
    • Olson, K.D., Westman, L. and Nordquist, D.W. 1998. 1997 Annual Report of the Southeastern Minnesota Farm Business Management Association. Staff Paper P98-2, Dept of App Econ, U of MN, St. Paul.
    • Olson, K.D. 1998a. "Net Farm Income Estimated to Drop Precipitously in 1998." Staff Paper P98-6, Dept of App Econ, U of MN, St. Paul.
    • Olson, K.D. 1998b. "The Prospects for Farm Income in 1998." In Minnesota Current Farm Situation, B. Buhr et al. Staff Paper P98-9, Dept of App Econ, U of MN, St. Paul, pp. 1-14.


    Progress 01/01/97 to 12/31/97

    Outputs
    Olson et al. report financial performance records for 2 record associations in southern Minnesota. Average accrual farm income in the Southeastern Association was $67,579 in 1996, down 8% from 1995. In the Southwestern Association average accrual farm income was $62,699 in 1996, up 9% from 1995. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Olson and Westra (1997) found farmers were more apt to adopt conservation tillage if they were larger, concerned about erosion, had made a recent major investment in the farm, use other producers for tillage information, have the management skills for conservation tillage, and believe conservation tillage will fit their production goals and the physical setting of their farm. Olson and Lohano found production costs to vary both between farm sizes and within size groups. Nordquist and Olson show how financial measures have varied over time and for different farm sizes and types. Ohlmer et al. found that farmers need more and better information and assistance in the processes of problem detection and finding ideas for options. To improve farmers' creativity in idea generation, it is important to improve farmers' ability and motivation. Farmers' low interest in information management services and tools can be explained by their design for quantifying versus qualitative farmers. Farmers prefer incremental adoption and small scale tests of alternatives.

    Impacts
    (N/A)

    Publications

    • Ohlmer, B., Olson, K. Brehmer, B. 1997. "Understanding Farmers Decision Making Processes and Improving Managerial Assistance." Agricultural Economics. Accepted for publication.
    • Olson, K.D., Talley, D.E., Christensen, J., Weness, E.J., Fales, P.A. and Nordquist, D.W. 1997. 1996 Annual Report of the Southwestern Minnesota Farm Business Management Association. Staff Paper P97-5, Dept of App Econ, U of Minnesota, St. Paul, MN.
    • Olson, K.D., Westman, L. and Nordquist, D.W. 1997. 1996 Annual Report of the Southeastern Minnesota Farm Business Management Association. Staff Paper P97-6, Dept of App Econ, U of MN, St. Paul.
    • Ohlmer, B., Brehmer, B., Olson, K. 1997. "Decision Making Processes of Swedish Farmers." Chapter 14 in Advances in Economic Psychology, Antonides, G., Van Raaig, F. and Maital, S., eds. John Wiley & Sons, Chichester, G. Britain, p. 255-266.
    • Westra, J.V. and Olson, K.D. 1997. "Farmers Decision Processes and Adoption of Conservation Tillage. Staff Paper P97-9, Dept. of Applied Econ., U of Minnesota, St. Paul.
    • Olson, K.D. and Lohano, H.D. 1997. "Will the Real Cost of Production Please Stand Up." Minnesota Agricultural Economist, No. 687, pp. 1, 6-7.
    • Nordquist, D. and Olson, K. 1997. "Agriculture Finance Trends: Real Data from Real Farms. Minnesota Agricultural Economics, No. 690, pp. 1, 5-7.


    Progress 01/01/96 to 12/30/96

    Outputs
    Olson et al. report financial performance records for 2 record associations in southern Minnesota. Average accrual farm income in the Southeastern Association was $71,382 in 1995, up 27% from 1994. In the Southwestern Association average accrual farm income was $57,276 in 1995, up 80% from 1994. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Olson and Westra (1996b) found farmers were more apt to adopt conservation tillage if they were larger, they were concerned about erosion, and they were more willing to consider alternative technologies. #hlm#r et al. found that farmers need more and better information and assistance in the processes of problem detection and finding ideas for options. To improve farmers' creativity in idea generation, it is important to improve farmers' ability and motivation. Farmers' low interest in information management services and tools can be explained by their design for quantifying versus qualitative farmers. Farmers prefer incremental adoption and small scale tests of alternatives. Using stochastic dominance, Olson et al. found the high purchased input strategy in a 2-year rotation of corn and soybean to be preferred over other strategies and rotations. Talley found that a higher intensity of the land rental market caused low quality land to be bid higher than its productivity would indicate compared to high quality land. O.

    Impacts
    (N/A)

    Publications

    • Olson, K.D., Talley, D.E., Christensen, J., Weness, E.J., Fales, P.A. and Nordquist, D.W. 1996. 1995 Annual Report of the Southwestern Minnesota Farm Business Management Association. Staff Paper P96-4, Dept of App Econ, U of Minnesota, St.
    • Olson, K.D., Westman, L. and Nordquist, D.W. 1996. 1995 Annual Report of the Southeastern Minnesota Farm Business Management Association. Staff Paper P96-5, Dept of App Econ, U of MN, St. Paul. Andersson, J.,
    • Olson, K.D. 1996. "On Comparing Farm Record Association Members to the Farm Population." Rev. Ag. Econ. 18 (1996):259-264.
    • Olson, K.D., Westra, J.V. 1996a. "Nonfinancial Factors and Farm Performance." Proceedings of the American Agricultural Economics Association, American Journalof Agricultural Economics. In press.
    • Olson, K.D. and Westra, J.V. 1996b. "Farmers' Adoption and Nonadoption of Conservation Tillage. Submitted to AAEA meetings. Unpub. hlmr, B.,
    • Olson, K., Brehmer, B. 1996. "Explaining Farmers' Decision Making Process and Need of Management Assistance." Info. and Communication Technology Applications in Agriculture., eds. Lokhants, C., et al., Agro-informatica reeks nr. hlmr, B.,
    • Brehmer, B., Olson, K. 1996. "Decision Making Processes of Swedish Farmers." Advances in Economic Psychology, John Wiley & Sons, Sussex, London. I.


    Progress 01/01/95 to 12/30/95

    Outputs
    Olson et al. report financial performance records for 2 record associations in southern Minnesota. Average accrual farm income in the Southeastern Association was $56,192 in 1994 for the 64 farms. This was 30% higher than 1993. In the Southwestern Association, average accrual farm income was $31,915 for the 202 farms. This was a 1% increase from 1993. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Andersson and Olson use and compare alternative methods of testing the statistical representativeness of the membership of farm record associations. Association farms were larger in terms of tillable acreage, cash sales, assets, expenditures, debt, and income; had a higher proportion of rented land; and were more efficient as measured by a modified rate of return. Olson and Westra use a logit model to explain farm success on the basis of nonfinancial variables. Significant and positive variables were: having received a bachelor's degree, soil quality, diversification, management time, new machinery, and letting neighbors try new technology first. #hlm#r et al. found that farmers need more and better information and assistance in the processes of problem detection and in finding ideas for options. They also found that to improve farmers' creativity in idea generation, it is important to improve farmers' ability and motivation.

    Impacts
    (N/A)

    Publications


      Progress 01/01/94 to 12/30/94

      Outputs
      Olson et al. report financial performance records for 2 record associations. Dueto very wet, cool weather during the growing season in 1993, crop yields were reduced or lost completely; in some cases the crop could not be planted due to wet conditions. Average accrual farm income in the Southeastern Association was $43,246 in 1993 for the 65 farms. This was 8% higher than in 1992. In the Southwestern, average accrual farm income was $31,567 for the 202 farms. This was 16% lower than in 1992. The reports provide additional information on profitability, liquidity, and solvency as well as other whole-farm information and detailed information on crop and livestock enterprises. Olson and Destro develop an accounting framework which allows a more accurate evaluation and comparison of conventional and alternative agriculture by accounting for both traditional market transactions and the use of environmental assets on individual farms. This framework is analogous to the work on national accounts. Andersson and Olson use and compare alternative methods of testing the statistical representativeness of the membership of farm record associations. #hlm#r et al. develop a conceptual model of farmers' decision making and test that model in a series of case studies. They found that managerial assistance does not agree with farmers' decision processes and, thus, suggested some ideas for improving that assistance.

      Impacts
      (N/A)

      Publications


        Progress 01/01/93 to 12/30/93

        Outputs
        Farm income and related data were monitored and reported by NORDQUIST et al. fortwo associations with a total of 264 farms. In SW Minnesota, 1992 farm income was up 27% from 1991; SE Minnesota suffered a decrease of 21%. In both associations, 1992 income was below the levels in 1987-1990 in both nominal and constant dollars. OLSON and WENESS answer some common questions on how to deal with the wet conditions of 1993. In other work, data was collected on the characterization of the high, middle and low profit farms in the SW association; analysis of that data will be done in 1994. OHLMER et al. present a conceptual model of farmers' decision process which is tested through case studies. They point out areas for expansion and improvement in the model as well as potential areas for improving management assistance. They found that farmers needed more assistance in problem detection and definition and in information search and paying attention. OLSON and STANTON review past projections and project future U.S. farm numbers and their distribution over size classes. The size class of $40,000-99,999 (which has been identified with small, family farms) is expected to decline in absolute number but continue to be the largest group of commercial farms; however, they will produce a smaller share of total production. Other work, as yet unpublished, has been done on the impact of practices associated with sustainable agriculture; this work has an international collaboration with colleagues at the University of Padova, Italy.

        Impacts
        (N/A)

        Publications


          Progress 01/01/92 to 12/30/92

          Outputs
          Farm income and related data were monitored and reported by OLSON et al. for twoassociations with a total of about 250 farms. Farm income in 1991 was down slightly from 1990 levels, but 1990 had been at record levels so a decrease was expected. As part of a regional survey, OLSON and SAUPE discuss farmer's plans to change and their needs for the future. OLSON and STANTON review past projections and project future U.S. farm numbers and their distribution over size classes. The size class of $40,000 99,999 (which has been identified with small, family farms) is expected to decline in absolute number but continue to be the largest group of commercial farms; however, they will produce a smaller share of total production. OLSON, GRANDE, and BJORNSTAD and OLSON, BJORNSTAD, and GRANDE found that the past trends towards fewer and larger livestock farms can be expected to continue and that Minnesota's hog industry appears to be the most competitive livestock industry compared to other regions in the U.S. OLSON and EIDMAN estimated that the variability of returns was more important than policy changes (e.g., taxes and benefits) in influencing a farmer to choose herbicides than the higher expected returns in a nonherbicide system. Other work, as yet unpublished, has been done on the impact of practices associated with low-input, sustainable agriculture (LISA); this work has an international collaboration with colleagues at the University of Padova, Italy.

          Impacts
          (N/A)

          Publications


            Progress 01/01/91 to 12/30/91

            Outputs
            Olson and Stanton review past projections and project future U.S. farm numbers and their distribution over size classes. The size class of $40,000-99,999 (which has been identified with small, family farms) is expected to decline in absolute number but continue to be the largest group of commercial farms; however, they will produce a smaller share of total production. In a related study, the future structure of the livestock industry in Minnesota is being analyzed (Olson, Bjornstad, and Grande; Olson, Grande, Bjornstad; Grande; Bjornstad). Olson and Eidman estimated that the variability of returns was more important than policy changes (e.g., taxes and benefits) in influencing a farmer to choose herbicides than the higher expected returns in a nonherbicide system. Olson et al. found that an annual forage may be a viable alternative in a corn-soybean farming system depending upon a farmer's risk preferences. A farmer's decision to adapt to declining labor supply, soil conservation needs, and lowering debt requirements is presented as a case by Olson, Lyman, and Eidman. On-farm research results are being used to study the impact of practices associated with low-input, sustainable agriculture (LISA): these results are, as yet unpublished. Boehlje and Olson discuss current and potential linkages between farm and financial management.

            Impacts
            (N/A)

            Publications


              Progress 01/01/90 to 12/30/90

              Outputs
              Olson and Stanton review past projections and develop a current protection of the structure of American agriculture. The U.S. Census of Agriculture reported there were 2.1 million farms in 1987. Extending the percentage change in farm numbers by sales size class between 1978 and 1987 results in a projection of 1.9 million farms in the year 2000. Using 1982 through 1987 as the base, the projection is 1.8 million farms in 2000. In 1987, farms with sales of $40,000 or more constituted 28% of the total number of farms. By 2000, farms with sales of $40,000 are projected to constitute 30% of all farms using 1978 to 1987 for the base period. Using 1982 to 1987 as the base period, this size class is projected to contain 27% of all farms. The size class of $40,000-$99,999 (which has been identified with small, family farms) is expected to decline in absolute number but continue to be the most important group in terms of total numbers among all farms with sales of $40,000 or more. Olson and Mikesell report the results of a survey of farm families' opinions on community and economic conditions, quality of life, farm family adjustments, risk reduction behaviors, participation in government programs, information and training needs, spouse's involvement in farm operation, and family decision-making behavior, pressures experienced and coping strategies used by spouses, and participation in farm and local organizations.

              Impacts
              (N/A)

              Publications


                Progress 01/01/89 to 12/30/89

                Outputs
                Financial variables from southwest Minnesota farmers' were analyzed using data from 1985 and the results verified with 1986 and 1987 data by Tvedt, Olson, and Hawkins. In summary, seven variables were found to be significant predictors of the rate of return on assets (ROA). The number of acres, corn yield ratio, asset turnover rate, beginning debt-to-asset ratio, a cash rent indicator, and a beef finishing indicator, were positively related with ROA. The gross ratio (total expenses divided by value of production) was negatively related with ROA. The number of acres, corn yield ratio, and gross ratio had significant quadratic effects which were opposite their linear effect. Liquidity and marketing efficiency measures were not found to be significant predictors of ROA. The memberships of the SE and SW Minnesota Farm Business Management Associations have been compared to the USDA's Farm Costs and Returns Survey (FCRS) data. The report is in draft form. The usefulness and accuracy of an expert system for financial analysis is being evaluated by usingAssociation data. Olson and Boehlje have analyzed the relationship between the trends in farm income from the Associations and the trends in land prices and values as reported by Phil Raup and colleagues.

                Impacts
                (N/A)

                Publications


                  Progress 01/01/88 to 12/30/88

                  Outputs
                  Financial variables from Southwest Minnesota farmers' were analyzed using data from 1985 and verified with 1986 and 1987 data. Seven variables were found to be significant predictors of the rate of return on assets (ROA). The number of acres, corn yield ratio, asset turnover rate, beginning debt-to-asset ratio, a cash rent indicator, and a beef finishing indicator were positively related with ROA. The gross ratio (total expenses divided by value of production) was negatively related with ROA. The number of acres, corn yield ratio, and gross ratio had significant quadratic effects which were opposite their linear effect. Liquidity and marketing efficiency measures were not found to be significant predictors of ROA.

                  Impacts
                  (N/A)

                  Publications


                    Progress 01/01/87 to 12/30/87

                    Outputs
                    The financial trends of southern Minnesota farms from 1970 to 1985 were analyzed. These trends generally followed national trends of improved financial conditions throughout the 1970s and severe financial problems in the 1980s. By 1985, the condition had improved from 1981-82 for most farms. In all years, there were wide differences between the high profit and low profit farms. In "Family Farm Adjustments to Financial Stress," financial analysis procedures were outlined and actual adjustments were discussed. This covered options that were available, how adjustments could be analyzed, and examples of what adjustments have been made. A paper on new crops and products also was written. Current research underway is evaluating the differentiating characteristics between high profit and low profit farms using a LOGIT analysis.

                    Impacts
                    (N/A)

                    Publications


                      Progress 01/01/86 to 12/30/86

                      Outputs
                      A report analyzing the financial trends of the members of the S.E. & S.W. Minnesota Farm Business Management Associations from 1970 to 1985 has been prepared. It looks at the changes in the assets, liabilities and net worth as well as the net farm income and its components. The financial ratio analysis includes trends in the rates of return to investment, the debt to asset ratio, and other pertinent measures. The report covers capital asset purchases and sales. Family living expenses are included also. Research under way includes testing how well the association members represented the population of farmers as described in the census of agriculture; testing the correlation between the debt service coverage ratio & the debt-to-asset ratio; and testing potential early indicators of financial trouble.

                      Impacts
                      (N/A)

                      Publications


                        Progress 01/01/85 to 12/30/85

                        Outputs
                        Three minor activities were undertaken this year. First FINANX software, which is used to conduct the farm business and enterprise analysis for about 250 members of the Southeastern and Southwestern Minnesota Farm Business Management Associations, was slightly modified to include more financial measures to permit closer tracking of financial progress over time. Second, the NOMAD data base management software routine used to construct the Minnesota Farm Business Records was likewise modified to include the new financial measures. Third, preliminary analysis of U.S. Census of Agriculture data was begun in order to identify the proportional representation of each type of farm by size in the Minn. Farm Business Records Data Base in the population of all farms in each county of Minnesota in which the S.W. and S.E. Assoc. have members.

                        Impacts
                        (N/A)

                        Publications


                          Progress 01/01/84 to 12/30/84

                          Outputs
                          Work is still in the initial stages. The Farm Sector Economics Branch of ERS ishelping to obtain unpublished data from the 1978 Census of Agriculture to use in correlating the farm record keeping farms to counties and groups of counties comprising agroeconomic regions of interest. Record keeping farms will be classified by type, identified as specialized by the proportion of sales from a single enterprise, i.e., hog farms, dairy farms, cash grain farms, etc. When this phase of identifying the representativeness of the farm records data base by type of farm is completed, then work will start on the actual calculations of indicators. The first batch of data has been received from ERS and is being analyzed.

                          Impacts
                          (N/A)

                          Publications


                            Progress 07/01/83 to 12/30/83

                            Outputs
                            Work is only in the initial stages. The Farm Sector Economics Branch of ERS hasagreed to help in obtaining unpublished data from the 1978 Census of Agriculture to use in correlating the farm record keeping farms to counties and groups of counties comprising agroeconomic regions of interest. Record keeping farms will be classified by type, identified as specialized by the proportion of sales from a single enterprise, i.e., hog farms, dairy farms, cash grain farms, etc. When this phase of identifying the representativeness of the farm records data base by type of farm is completed, then work will start on the actual calculations of indicators.

                            Impacts
                            (N/A)

                            Publications