IDEAS home Printed from https://ideas.repec.org/p/ags/ifma24/400138.html

Long-term Economic Viability and Farm Succession -- Theory to Practice

Author

Listed:
  • Bernhardt, Kevin

Abstract

Farm succession to the next generation is fraught with challenges, not the least of which is the economic viability of the operation. The next generation has choices of where to employ their manual labor, management skills, and equity capital. If the farm business does not pay the same as some alternative, then their return to the farm comes at a sacrifice, which is a tough ask of someone at the beginning of their careers.
This paper uses past work to define long-term economic viability, and presents a process for on-farm measurement, assessment, and improvement of current viability. A database of 174 Wisconsin dairy farms from the years 2014-2018 is used to illustrate the process. Not surprisingly, farms with the highest return on assets had the strongest viability. Deeper analysis revealed that farms who used debt-financing to achieve greater returns than the interest paid resulted in stronger economic viability.

Suggested Citation

  • Bernhardt, Kevin, 2024. "Long-term Economic Viability and Farm Succession -- Theory to Practice," 24th Congress, Saskatoon, Canada, 2024 400138, International Farm Management Association.
    • Handle: RePEc:ags:ifma24:400138
    DOI: 10.22004/ag.econ.400138
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/400138/files/Bernhardt%20--%20Long-Term%20Economic%20Viability%20and%20Succession.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.400138?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Latruffe, Laure & Diazabakana, Ambre & Bockstaller, Christian & Desjeux, Yann & Finn, John & Kelly, Edel & Ryan, Mary & Uthes, Sandra, 2016. "Measurement of sustainability in agriculture: a review of indicators," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 118(3), pages 1-8, December.
    2. Smale, Melinda & Saupe, William E. & Salant, Priscilla, 1986. "Farm Family Characteristics and the Viability of Farm Households in Wisconsin, Mississippi, and Tennessee," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 38(02), pages 1-17.
    3. Christensen, Libby & Limbach, Learner, 2019. "Finding Common Ground: Defining Agricultural Viability and Streamlining Multi-organization Data Collection," Journal of Agriculture, Food Systems, and Community Development, Center for Transformative Action, Cornell University, vol. 8(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tomas Hlavsa & Jindrich Spicka & Marie Stolbova & Zuzana Hlouskova, 2020. "Statistical analysis of economic viability of farms operating in Czech areas facing natural constraints," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(5), pages 193-202.
    2. Jindrich Spicka & Tomas Hlavsa & Katerina Soukupova & Marie Stolbova, 2019. "Approaches to estimation the farm-level economic viability and sustainability in agriculture: A literature review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(6), pages 289-297.
    3. Hans Vrolijk & Krijn Poppe, 2021. "Cost of Extending the Farm Accountancy Data Network to the Farm Sustainability Data Network: Empirical Evidence," Sustainability, MDPI, vol. 13(15), pages 1-13, July.
    4. Artiom Volkov & Mangirdas Morkunas & Tomas Balezentis & Vaida Šapolaitė, 2020. "Economic and Environmental Performance of the Agricultural Sectors of the Selected EU Countries," Sustainability, MDPI, vol. 12(3), pages 1-17, February.
    5. Alessandro Magrini & Francesca Giambona, 2022. "A Composite Indicator to Assess Sustainability of Agriculture in European Union Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(3), pages 1003-1036, October.
    6. Aleksandar Miljatović & Mirela Tomaš Simin & Veljko Vukoje, 2025. "Key Determinants of the Economic Viability of Family Farms: Evidence from Serbia," Agriculture, MDPI, vol. 15(8), pages 1-20, April.
    7. Agnieszka Wojewódzka-Wiewiórska & Anna Kłoczko-Gajewska & Piotr Sulewski, 2019. "Between the Social and Economic Dimensions of Sustainability in Rural Areas—In Search of Farmers’ Quality of Life," Sustainability, MDPI, vol. 12(1), pages 1-26, December.
    8. Nilsson, Pia & Bommarco, Riccardo & Hansson, Helena & Kuns, Brian & Schaak, Henning, 2022. "Farm performance and input self-sufficiency increases with functional crop diversity on Swedish farms," Ecological Economics, Elsevier, vol. 198(C).
    9. Katarína Novotná & Ľubomír Gurčík & Zuzana Lušňáková, 2023. "Economic determinants of the development and sustainability of family farms in Slovakia," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 69(7), pages 291-299.
    10. Vassalos, Michael & Karanikolas, Pavlos & Li, Yingbo, "undated". "Investigating the Impact of Farm Characteristics, Socioeconomic Characteristics and of the Single Farm Payment on the Viability of Farms: The Case of Greece," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205423, Agricultural and Applied Economics Association.
    11. Nicola Galluzzo, 2021. "Estimation of the impact of CAP subsidies as environmental variables on Romanian farms," Economia agro-alimentare, FrancoAngeli Editore, vol. 23(3), pages 1-24.
    12. Marta Guth & Katarzyna Smędzik-Ambroży & Bazyli Czyżewski & Sebastian Stępień, 2020. "The Economic Sustainability of Farms under Common Agricultural Policy in the European Union Countries," Agriculture, MDPI, vol. 10(2), pages 1-20, January.
    13. Li, Mo & Fu, Qiang & Singh, Vijay P. & Liu, Dong & Li, Jiang, 2020. "Optimization of sustainable bioenergy production considering energy-food-water-land nexus and livestock manure under uncertainty," Agricultural Systems, Elsevier, vol. 184(C).
    14. Bo Peng & Rasa Melnikiene & Tomas Balezentis & Giulio Paolo Agnusdei, 2024. "Structural dynamics and sustainability in the agricultural sector: the case of the European Union," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 12(1), pages 1-27, December.
    15. Stylianou, Andreas & Sdrali, Despina & Apostolopoulos, Constantinos D., 2020. "Capturing the diversity of Mediterranean farming systems prior to their sustainability assessment: The case of Cyprus," Land Use Policy, Elsevier, vol. 96(C).
    16. Carbone,Anna & Sardone, Roberta & Zavalloni, Matteo, 2025. "The social sustainability of European agriculture facing old and new challenges. Issues, methods and policies," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 14(3).
    17. Alain Rival & Christophe Lesueur & Rosawadee Sukkum & Didier Pillot & Pasakorn Thammachote & Rungrat Saeyang & Diana Chalil & Agus Setyarso & Magali Dufour, 2024. "Refining The Summer School Concept For Education In Sustainable Agriculture And The Environment," Education, Sustainability & Society (ESS), Zibeline International Publishing, vol. 7(2), pages 50-55, February.
    18. Bazyli Czyżewski & Anna Matuszczak & Andreea Muntean, 2019. "Approaching environmental sustainability of agriculture: environmental burden, eco-efficiency or eco-effectiveness," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(7), pages 299-306.
    19. Sofia Karampela & Thanasis Kizos & Alex Koutsouris, 2025. "The Interplay of Pro-Innovative Behavior, Trust, and Farm Viability for Sustainability in the United Winemaking Agricultural Cooperative of Samos," Agriculture, MDPI, vol. 15(18), pages 1-23, September.
    20. Frýd, Lukáš & Sokol, Ondřej, 2021. "Relationships between technical efficiency and subsidies for Czech farms: A two-stage robust approach," Socio-Economic Planning Sciences, Elsevier, vol. 78(C).

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ifma24:400138. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifmaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.