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Financial Performance, Risk, And Specialization


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  • Purdy, Barry M.
  • Langemeier, Michael R.
  • Featherstone, Allen M.


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.

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Bibliographic Info

Article provided by Southern Agricultural Economics Association in its journal Journal of Agricultural and Applied Economics.

Volume (Year): 29 (1997)
Issue (Month): 01 (July)

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Handle: RePEc:ags:joaaec:15535

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Keywords: Financial efficiency; Return on equity; Specialization; Agricultural Finance;


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  1. Ford, Stephen A. & Shonkwiler, John Scott, 1994. "The Effect Of Managerial Ability On Farm Financial Success," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 23(2), October.
  2. Tauer, Loren W., 1994. "Age and Farmer Productivity," Staff Papers 121316, Cornell University, Department of Applied Economics and Management.
  3. Levy, H & Markowtiz, H M, 1979. "Approximating Expected Utility by a Function of Mean and Variance," American Economic Review, American Economic Association, vol. 69(3), pages 308-17, June.
  4. Kauffman, Jonas B., III & Tauer, Loren W., 1986. "Successful Dairy Farm Management Strategies Indentified By Stochastic Dominance Analyses Of Farm Records," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(2), October.
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Cited by:
  1. Foreman, Linda F. & Livezey, Janet S., 2003. "Factors Contributing To Financially Successful Southern Rice Farms," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35215, Southern Agricultural Economics Association.
  2. Morgan, Jeffery D. & Langemeier, Michael R., 2003. "Impact Of Farm Size And Type On Competitive Advantage," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35197, Southern Agricultural Economics Association.
  3. Hopkins, Jeffrey W. & Morehart, Mitchell J. & Johnson, James D. & Culver, David & Caldwell, John, 2004. "What Affects Farmers' Ability to Adjust: Evidence from the United States and Canada," IAPRAP\IATRC Summer Symposium, Adjusting to Domestic and International Agricultural Reform in Industrial Countries, June 6-7, 2004, Philadelphia, PA 15766, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
  4. Erickson, Kenneth W. & Moss, Charles B. & Mishra, Ashok K., 2002. "The Measurement Of Inequality In Canadian And U.S. Agricultural Income By Components Of Net Value Added," 2002 Annual meeting, July 28-31, Long Beach, CA 19866, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Sporri, Martina & Barath, Lajos & Bokusheva, Raushan & Ferto, Imre, 2012. "The Impact of Crop Insurance on the Economic Performance of Hungarian Cropping Farms," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122525, European Association of Agricultural Economists.
  6. Geoffroy Enjolras & Fabian Capitanio & Magali Aubert & Felice Adinolfi, 2014. "Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy," Working Papers 258074, Institut National de la Recherche Agronomique, France.
  7. Escalante, Cesar L. & Barry, Peter J., 2001. "Farm-Level Evidence On The Risk Balancing Hypothesis From Illinois Grain Farms," 2001 Annual meeting, August 5-8, Chicago, IL 20617, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. Barry, Peter J. & Escalante, Cesar L. & Bard, Sharon K., 2000. "Economic Risk And The Structural Characteristics Of Farm Businesses," 2000 Annual meeting, July 30-August 2, Tampa, FL 21778, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  9. McBride, William D. & Johnson, James D., 2004. "Approaches To Management And Farm Business Success," 2004 Annual meeting, August 1-4, Denver, CO 20131, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  10. repec:ebl:ecbull:v:17:y:2008:i:12:p:1-10 is not listed on IDEAS
  11. Paulson, Nicholas, 2013. "The Impact of Revenues and Costs on the Relative Returns of Illinois Grain Farms," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers.
  12. Pinochet-Chateau, Rene & Shadbolt, Nicola M. & Holmes, Colin & Lopez-Villalobos, Nicolas, 2005. "Drivers of Risk in New Zealand Dairy Systems," 15th Congress, Campinas SP, Brazil, August 14-19, 2005 24289, International Farm Management Association.
  13. Katchova, Ani L., 2002. "Farm Values and Financial Performance of Diversified Farms," Proceedings: 2002 Regional Committee NC-221, October 7-8, 2002, Denver, Colorado 132372, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
  14. Ani L. Katchova, 2005. "The Farm Diversification Discount," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 984-994.
  15. McBride, William D. & Johnson, James D., 2006. "Defining and Characterizing Approaches to Farm Management," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(01), April.


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