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What’s Driving U.S. Broiler Farm Profitability?

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Listed:
  • Nehring, Richard
  • Gillespie, Jeffrey
  • Katchova, Ani L.
  • Hallahan, Charlie
  • Harris, J. Michael
  • Erickson, Ken

Abstract

Using USDA’s ARMS data for 2003-2011 and the DuPont expansion financial model, we determine the extent and location of U.S. broiler farms and estimate the drivers of farm profitability, asset turnover, solvency, and return on equity. We find that farm size, diversification, and broiler housing vintage are the major drivers of farm financial performance, so these factors will likely have the greatest impact on U.S. broiler production in an increasingly competitive broiler trade market. Furthermore, region, farmer age, and off-farm employment are additional farm financial performance drivers that have implications for international competitiveness.

Suggested Citation

  • Nehring, Richard & Gillespie, Jeffrey & Katchova, Ani L. & Hallahan, Charlie & Harris, J. Michael & Erickson, Ken, 2015. "What’s Driving U.S. Broiler Farm Profitability?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(A), pages 1-20, July.
    • Handle: RePEc:ags:ifaamr:207002
    DOI: 10.22004/ag.econ.207002
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    References listed on IDEAS

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    1. Ashok K. Mishra & Charles B. Moss & Kenneth W. Erickson, 2009. "Regional differences in agricultural profitability, government payments, and farmland values," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 69(1), pages 49-66, May.
    2. Richard Nehring & Jeffery Gillespie & Charles Hallahan & James Michael Harris & Ken Erickson, 2014. "What is driving economic and financial success of US cow-calf operations?," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 74(3), pages 311-325, August.
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    4. Ashok K. Mishra & J. Michael Harris & Kenneth W. Erickson & Charlie Hallahan & Joshua D. Detre, 2012. "Drivers of agricultural profitability in the USA," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 72(3), pages 325-340, November.
    5. Golz, Joel T. & Koo, Won W., 1991. "Competitiveness of Broiler Producers in North America Under Alternative Free Trade Scenarios," Agricultural Economics Reports 23395, North Dakota State University, Department of Agribusiness and Applied Economics.
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    8. Jeffrey Gillespie & Ashok Mishra, 2011. "Off‐farm employment and reasons for entering farming as determinants of production enterprise selection in US agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 411-428, July.
    9. Knoeber, Charles R, 1989. "A Real Game of Chicken: Contracts, Tournaments, and the Production of Broilers," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(2), pages 271-292, Fall.
    10. Christopher G. Davis & Andrew Muhammad & David Karemera & David Harvey, 2014. "The Impact of Exchange Rate Volatility on World Broiler Trade," Agribusiness, John Wiley & Sons, Ltd., vol. 30(1), pages 46-55, January.
    11. Gillespie, Jeffrey M. & Nehring, Richard F. & Hallahan, Charles B. & Sandretto, Carmen L., 2009. "Pasture-Based Dairy Systems: Who Are the Producers and Are Their Operations More Profitable than Conventional Dairies?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(3), pages 1-16, December.
    12. Melvin, Jon & Boehlje, Michael & Dobbins, Craig L. & Gray, Allan W., 2003. "The DuPont Profitability Analysis Model: An E-Learning Application and Evaluation," 2003 Regional Committee NCT-194, October 6-7, 2003; Kansas City, Missouri 132522, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
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    Cited by:

    1. Łukasz Kryszak & Marta Guth & Bazyli Czyżewski, 2021. "Determinants of farm profitability in the EU regions. Does farm size matter?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(3), pages 90-100.
    2. Yun-Cih Chang & Min-Fang Wei & Yir-Hueih Luh, 2021. "Choice of Modern Food Distribution Channels and Its Welfare Effects: Empirical Evidence from Taiwan," Agriculture, MDPI, vol. 11(6), pages 1-13, May.

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