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Measuring the Costs of Production and Pricing on Diversified Farms: Juggling Decisions Amidst Uncertainties

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  • Becot, Florence A.
  • Conner, David S.
  • Kolodinsky, Jane M.
  • Mendez, V. Ernesto

Abstract

Farmers must earn revenues that both cover costs and provide adequate returns. The goal of this research was to understand how diversified farmers measure their cost of production and determine prices. We conducted in-depth interviews of diversified Vermont farmers and used the constant comparative method to analyze the data. Farmers and their operations, the process of measuring the cost of production and pricing, farmers’ decision-making process, and tradeoffs in the face of uncertainty are described and analyzed. This study’s findings contribute to current discussions of farmer decision making by developing practical implications for important, but difficult tasks.

Suggested Citation

  • Becot, Florence A. & Conner, David S. & Kolodinsky, Jane M. & Mendez, V. Ernesto, 2014. "Measuring the Costs of Production and Pricing on Diversified Farms: Juggling Decisions Amidst Uncertainties," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2014, pages 1-18.
  • Handle: RePEc:ags:jasfmr:197104
    DOI: 10.22004/ag.econ.197104
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    File URL: http://ageconsearch.umn.edu/record/197104/files/408-Becot.pdf
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    References listed on IDEAS

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    1. Mishra, Ashok K. & El-Osta, Hisham S. & Johnson, James D., 1999. "Factors Contributing To Earnings Success Of Cash Grain Farms," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(3), pages 1-15, December.
    2. Marcellino, Dana M. & Wilson, Christine A., 2006. "The Current State and Value of Farm Record Keeping," 2006 Agricultural and Rural Finance Markets in Transition, October 2-3, 2006, Washington, DC 133087, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    3. Hueth, Brent & Ligon, Ethan & Wolf, Stephen & Wu, Steven, 1999. "Incentive Instruments in Agricultural Contracts: Input Control, Monitoring, Quality Measurement, and Price Risk," Staff General Research Papers Archive 5237, Iowa State University, Department of Economics.
    4. Brent Hueth & Philippe Marcoul, 2002. "Observations on Cooperative Bargaining in U.S. Agricultural Markets," Center for Agricultural and Rural Development (CARD) Publications 02-wp316, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    5. E. C. Pasour, 1980. "Cost of Production: A Defensible Basis for Agricultural Price Supports?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(2), pages 244-248.
    6. Nuthall, P. L., 2001. "Managerial ability -- a review of its basis and potential improvement using psychological concepts," Agricultural Economics, Blackwell, vol. 24(3), pages 247-262, March.
    7. Miller, Alan & Barnard, Freddie L. & Brown, Norman & Duckworth, Brenda & Wheeling, Barbara & Whittman, R.L. (Dick), 2010. "Farm Enterprise Analysis: Has It Lost Its Usefulness?," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2010, pages 1-8.
    8. McBride, William D. & Johnson, James D., 2006. "Defining and Characterizing Approaches to Farm Management," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 38(1), pages 155-167, April.
    9. 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, vol. 2013, pages 1-14, June.
    10. Marcellino, Dana M. & Wilson, Christine A., 2006. "Valuing Farm Financial Information," 2006 Annual meeting, July 23-26, Long Beach, CA 21243, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Ohlmer, Bo & Olson, Kent & Brehmer, Berndt, 1998. "Understanding farmers' decision making processes and improving managerial assistance," Agricultural Economics, Blackwell, vol. 18(3), pages 273-290, May.
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