Hostname: page-component-848d4c4894-m9kch Total loading time: 0 Render date: 2024-05-16T09:35:59.027Z Has data issue: false hasContentIssue false
  • English
  • Français

Dairy Farm Management and Long-Term Farm Financial Performance

Published online by Cambridge University Press:  15 September 2016

Brent A. Gloy ,
Jeffrey Hyde  and
Eddy L. LaDue
Brent A. Gloy
Affiliation:
Department of Applied Economics and Management, Cornell University
Jeffrey Hyde
Affiliation:
Department of Agricultural Economics and Rural Sociology, Pennsylvania State University
Eddy L. LaDue
Affiliation:
Agricultural Finance, Cornell University
Get access

Abstract

The financial performance and relationships between several management factors and financial performance are examined in a panel of 107 New York dairy farms. A panel regression model with fixed effects is estimated in an effort to identify management factors that influence profitability. The model is estimated with two-stage least squares to account for endogenous farm size and debt use variables. Production management factors such as farm size, rate of milk production, and milking system had a positive impact on farm profitability. Financial management variables for the type of accounting system used and the debt use were also significantly related to profitability. Unlike the findings of many other studies, measures of human capital did not have a statistically significant impact on profitability.

Keywords

dairy farm managementfinancial managementfixed-effects regression analysis
Type
Articles
Information
Agricultural and Resource Economics Review , Volume 31 , Issue 2 , October 2002 , pp. 233 - 247
Copyright
Copyright © 2002 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Cocchi, H., Bravo-Ureta, B. E., and Cooke, S. (1998). “A Growth Accounting Analysis of Cost Efficiency in Milk Production for Six Northern States in the United States.” Canadian Journal of Agricultural Economics 46, 287–296.Google Scholar
Dartt, B. A., Lloyd, J. W., Radke, B. R., Black, J. R., and Kaneene, J. B. (1999). “A Comparison of Profitability and Economic Efficiencies Between Management-Intensive Grazing and Conventionally Managed Dairies in Michigan.” Journal of Dairy Science 83, 2412–2420.CrossRefGoogle Scholar
Davidson, R., and MacKinnon, J. G. (1993). Estimation and Inference in Econometrics. New York: Oxford University Press.Google Scholar
El-Osta, H. S., and Johnson, J. D. (1998). “Determinants of Financial Performance of Commercial Dairy Farms.” Technical Bulletin No. 1859, USDA/ERS, Washington, DC.Google Scholar
El-Osta, H. S., and Morehart, M. J. (1999). “Technology Adoption Decisions in Dairy Production and the Role of Herd Expansion.” Agricultural and Resource Economics Review 28, 84–95.Google Scholar
Farm Financial Standards Council. (1997). “Financial Guidelines for Agricultural Producers.” Farm Financial Standards Council, Naperville, IL. Google Scholar
Featherstone, A. M., Langemeier, M. R., and Ismet, M. (1997). “A Nonparametric Analysis of Efficiency for a Sample of Kansas Beef Cow Farms.” Journal of Agricultural and Applied Economics 29, 175–184.Google Scholar
Ford, S. A., and Shonkwiler, J. S. (1994). “The Effects of Managerial Ability on Farm Financial Success.” Agricultural and Resource Economics Review 23, 150–157.Google Scholar
Fox, G., Bergen, P. A., and Dickson, E. (1993). “Why Are Some Farms More Successful than Others? A Review.” In Hallam, A. (ed.), Size, Structure, and the Changing Face of American Agriculture (pp. 232–250). Boulder, CO: Westview Press.Google Scholar
Gloy, B. A., Tauer, L. W., and Knoblauch, W. A. (2002). “Profitability of Grazing versus Mechanical Forage Harvesting on New York Dairy Farms” Journal of Dairy Science 85 (forthcoming).Google Scholar
Haden, K. L., and Johnson, L. A. (1989). “Factors Which Contribute to the Financial Performance of Selected Tennessee Dairies.” Southern Journal of Agricultural Economics 21, 105–112.Google Scholar
Hanson, G. D., Cunningham, L. C., Morehart, M. J., and Parsons, R. L. (1998). “Profitability of Moderate Intensive Grazing of Dairy Cows in the Northeast.” Journal of Dairy Science 81, 821–829.Google Scholar
Kauffman, J. B., and Tauer, L. W. (1986). “Successful Dairy Farm Management Strategies Identified by Stochastic Dominance Analyses of Farm Records.” Northeast Journal of Agricultural Economics 15, 168–177.Google Scholar
Knoblauch, W. A., Putnam, L. D., and Karszes, J. (2001). “Dairy Farm Management Business Summary, New York State 2000.” Research Bulletin No. 2001–06, Department of Applied Economics and Management, Cornell University, Ithaca, NY.Google Scholar
Langemeier, M., Schroeder, T., and Mintert, J. (1992). “Determinants of Cattle Finishing Profitability.” Southern Journal of Agricultural Economics 24, 41–47.Google Scholar
Mishra, A. K., El-Osta, H. S., and Johnson, J. D. (1999). “Factors Contributing to Earnings Success of Cash Grain Farms.” Journal of Agricultural and Applied Economics 31, 623–637.Google Scholar
Mishra, A. K., and Morehart, M. J. (2001). “Factors Affecting Returns to Labor and Management on U.S. Dairy Farms.” Agricultural Finance Review 61, 123–140.Google Scholar
Purdy, B. M., Langemeier, M. R., and Featherstone, A. M. (1997). “Financial Performance, Risk, and Specialization.” Journal of Agricultural and Applied Economics 29, 149–161.Google Scholar
Rougoor, C. W., Trip, G., Huirne, R. B. M., and Renkema, J. A. (1998). “How to Define and Study Farmers’ Management Capacity: Theory and Use in Agricultural Economics.” Agricultural Economics 18, 261–272.Google Scholar
SAS Institute, Inc. (1999). SAS OnlineDoc®, Version 8.01. Cary, NC: SAS Institute, Inc. Google Scholar
Short, S. D. (2000). “Structure, Management, and Performance Characteristics of Specialized Dairy Farm Businesses in the United States.” Agricultural Handbook No. 720, USDA/Economic Research Service, Washington, DC.Google Scholar
Sonka, S. T., Hornbaker, R. H., and Hudson, M. A. (1989). “Managerial Performance and Income Variability for a Sample of Illinois Cash Grain Producers.” North Central Journal of Agricultural Economics 11, 39–47.Google Scholar
Stefanides, Z., and Tauer, L. W. (1999). “The Empirical Impact of Bovine Somatotropin on a Group of New York Dairy Farms.” American Journal of Agricultural Economics 81, 95–102.Google Scholar
Tauer, L., and Stefanides, Z. (1998). “Success in Maximizing Profits and Reasons for Profit Deviation on Dairy Farms.” Applied Economics 30, 151–156.Google Scholar
U.S. Department of Agriculture, National Agricultural Statistics Service. (1999, March). “New York State and County Data” (Table 51). 1997 Census of Agriculture. USD A/NASS, Washington, DC.Google Scholar
U.S. Department of Agriculture, National Agricultural Statistics Service. (2002). Published Estimates Data Base, U.S. and State-Level Data for Dairy. USDA/NASS, Washington, DC. Online. Available at http://www.nass.usda.gov:81/ipedb/.Google Scholar
White, S. L., Benson, G. A., Washburn, S. P., and Green, J. T. Jr. (2002). “Milk Production and Economic Measures in Confinement or Pasture Systems Using Seasonally Calved Holstein and Jersey Cows.” Journal of Dairy Science 85, 95–104.Google Scholar
Winsten, J. R., Parsons, R. L., and Hanson, G. D. (2000, October). “A Profitability Analysis of Dairy Feeding Systems in the Northeast.” Agricultural and Resource Economics Review 29, 220–228.Google Scholar