Farm Business Enterprise Analysis

Darnell Smith, P&S, Economics Department


Rapid change in agricultural production technology has coincided with a similarly rapid change in the structure of Iowas farm businesses over recent decades.  Whereas the previous norm of a diversified farm business with both crops and livestock, the recent norm is for a high degree of specialization in either cash grain or livestock enterprises.


To obtain accurate Iowa farm business enterprise data by selected enterprise type and region, calculate summary averages of production efficiency and financial profitability by enterprise and region, and disseminated that information to stakeholders by publication and through the extension web site and other extension outlets.


The Iowa farm business enterprise data utilized in this study was obtained from the Iowa Farm Business Association. More than 700 farm businesses were obtained and classified by enterprise activity specialization.  Summary variables on production and financial efficiency were calculated by enterprise type and economic area.  Weighting factors are based on the number of farms in each size group in the economic area, as computed from the most recent Census of Agriculture. Only farms with sales of $40,000 or more were counted in making the weighting. Thus, overall averages should be representative of full-time Iowa farms.


The overall impact of this activity is that, by providing accurate information on current production and financial efficiency for specialized enterprises, Iowas agricultural producers will be able to make more informed and precise decisions about future enterprise specialization and competitiveness.  This Iowa Farm Business Association data analysis has provided a unique and specialize tool for enterprise analysis, discussion, and evaluation.  In addition to results posted on the extension and other web sites, this enterprise analysis has been utilized to support numerous other extension activities, presentations, and selected publications.

June 28, 2007

120 Farm and Business Management


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