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Financial Performance, Risk, and Specialization

Published online by Cambridge University Press:  28 April 2015

Barry M. Purdy ,
Michael R. Langemeier  and
Allen M. Featherstone
Barry M. Purdy
Affiliation:
Bank IV in Salina, Kansas
Michael R. Langemeier
Affiliation:
Agricultural Economics, Kansas State University
Allen M. Featherstone
Affiliation:
Agricultural Economics, Kansas State University
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Abstract

A sample of Kansas farms was used to examine the impact of risk and specialization on mean financial performance. Mean financial performance was hypothesized to be influenced by risk, age of the operator, percentage of acres owned, financial efficiency, leverage, specialization, and farm size. Risk, age of operator, financial efficiency, and farm size had the largest impacts on mean financial performance. Specializing in swine, dairy, or crop production increased mean financial performance, while specializing in beef production decreased mean financial performance. Farms with both crops and a livestock enterprise (beef, swine, or dairy) tended to have less variability in financial performance.

Keywords

financial efficiencyreturn on equityspecialization
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 29 , Issue 1 , July 1997 , pp. 149 - 161
Copyright
Copyright © Southern Agricultural Economics Association 1997

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