IDEAS home Printed from https://ideas.repec.org/p/ags/waealo/36133.html
   My bibliography  Save this paper

Profits And Risk: Fitting An Old Framework To A New Agriculture

Author

Listed:
  • Saxowsky, David M.
  • Wachenheim, Cheryl J.

Abstract

Textbooks in agricultural economics characterize resources used in production agriculture into four categories; land, labor, capital and management. Profit is presented as earned in the process of management. This traditional list of resources is respecified. Management becomes a specialized type of labor and two additional resources, information and the willingness and ability to bear risk, are added. It is argued that profits accrue not to management but to those willing and able to bear the risk inherent in production agriculture. The strategy of equity diversification is presented as a means for farmers to provide this resource and thus earn economic profits. Producer education and the repeal or amendment of legislation restricting the ability of farmers to diversify their equity investment are needed.

Suggested Citation

  • Saxowsky, David M. & Wachenheim, Cheryl J., 2001. "Profits And Risk: Fitting An Old Framework To A New Agriculture," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36133, Western Agricultural Economics Association.
  • Handle: RePEc:ags:waealo:36133
    DOI: 10.22004/ag.econ.36133
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/36133/files/sp01sa04.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.36133?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lawrence, John D. & Otto, Daniel M. & Meyer, Seth D., 1997. "Purchasing Patterns of Hog Producers: Implications for Rural Agribusiness," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 15(1), pages 1-17.
    2. Carlin, Thomas A., 1988. "Strong Communities - Strong Farms: What Is The Connection?," 1988 Conference, January 16-19, San Antonio, Texas 260149, Regional Research Committe NC-181: Determinants of Farm Size and Structure.
    3. Joan Fulton & Jeffrey Gillespie, 1995. "Emerging Business Organizations in a Rapidly Changing Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(5), pages 1219-1224.
    4. Drabenstott, Mark, 1994. "Industrialization: Steady Current or Tidal Wave?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 9(4), pages 1-5.
    5. Thomas Daniels, 1989. "A rationale for the support of the medium-sized family farm," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 6(4), pages 47-53, September.
    6. Wachenheim, Cheryl J. & Saxowsky, David, 2003. "Profits and Risk: Fitting an Old Framework to a New Agriculture," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2003, pages 1-10.
    7. Lawrence, John D. & Otto, Daniel & Meyer, Seth D., 1997. "Purchasing Patterns of Hog Producers: Implications for Rural Agribusiness," Staff General Research Papers Archive 5149, Iowa State University, Department of Economics.
    8. Ervin, David E. & Smith, Katherine R., 1994. "Agricultural Industrialization and Environmental Quality," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 9(4), pages 1-1.
    9. Krause, Kenneth R., 1983. "Corporate Farming: Importance, Incentives, and State Restrictions," Agricultural Economic Reports 307953, United States Department of Agriculture, Economic Research Service.
    10. Unknown, 1997. "Price Discovery in Concentrated Livestock Markets: Issues, Answers, Future Directions," Research Institute on Livestock Pricing 232724, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    11. W. Timothy Rhodus & E. Dean Baldwin & Dennis R. Henderson, 1989. "Pricing Accuracy and Efficiency in a Pilot Electronic Hog Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(4), pages 874-882.
    12. Hurt, Christopher, 1994. "Industrialization in the Pork Industry," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 9(4), pages 1-5.
    13. Knoeber, Charles R, 1997. "Explaining State Bans on Corporate Farming," Economic Inquiry, Western Economic Association International, vol. 35(1), pages 151-166, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bazzani, Guido Maria & di Pasquale, S. & Gallerani, Vittorio & Viaggi, Davide, 2002. "Water Regulation and Irrigated Agriculture Under the EU Water Framework Directive," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24898, European Association of Agricultural Economists.
    2. Wachenheim, Cheryl J. & Saxowsky, David, 2003. "Profits and Risk: Fitting an Old Framework to a New Agriculture," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2003, pages 1-10.
    3. Barnard, Freddie L. & Yeager, Elizabeth, 2013. "The Perfect Storm: A Case Study Illustrating How a Series of Events Led One Farm Operator to Develop a Risk Management Plan that Includes a Lender’s Perspective," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2013, pages 1-15, June.
    4. Bazzani, Guido Maria & di Pasquale, S. & Gallerani, Vittorio & Viaggi, Davide, 2002. "Water Policy And The Sustainability Of Irrigated Systems In Italy," Working Papers 14401, University of Minnesota, Center for International Food and Agricultural Policy.

    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. Myers, Robert J. & Chen, Jim, 1995. "Industrialization in the Pork Sector: Trends, Issues, and Implications for Michigan," Agricultural Economic Report Series 201432, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Adhikari, Bishwa B. & Harsh, Stephen B. & Cheney, Laura Martin, 2003. "Factors Affecting Regional Shifts Of U.S Pork Production," 2003 Annual meeting, July 27-30, Montreal, Canada 22200, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Unterschultz, James R., 2000. "New Instruments For Co-Ordination And Risk Sharing Within The Canadian Beef Industry," Project Report Series 24046, University of Alberta, Department of Resource Economics and Environmental Sociology.
    4. Jensen, Kimberly L., 1995. "Industrialization In Agriculture: Discussion," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(1), pages 1-4, July.
    5. Pangbourne, Kate & Roberts, Deborah, 2012. "What multipliers don’t tell you: A spatial analysis of farm household linkages," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134718, Agricultural Economics Society.
    6. Jeffrey M. Gillespie & Joan R. Fulton, 2001. "A Markov chain analysis of the size of hog production firms in the United States," Agribusiness, John Wiley & Sons, Ltd., vol. 17(4), pages 557-570.
    7. Regmi, Madhav & Featherstone, Allen M., 2017. "Farm Households Consumption Heterogeneity And Rural Business Dynamics," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252755, Southern Agricultural Economics Association.
    8. Jeremy Foltz & Kimberly Zeuli, 2005. "The Role of Community and Farm Characteristics in Farm Input Purchasing Patterns," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(4), pages 508-525.
    9. Antonovitz, Frances & Buhr, Brian L. & Liu, Donald J., 1996. "Vertical Integration Incentives In Meat Product Markets," Staff Papers 13989, University of Minnesota, Department of Applied Economics.
    10. Ekanem, Enefiok P. & Muhammad, Safdar & Tegegne, Fisseha & Singh, Surendra P., 2004. "Consumer Biotechnology Food And Nutrition Information Sources: The Trust Factor," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(1), pages 1-7, March.
    11. Michael Boehlje & Jay Akridge & Dave Downey, 1995. "Restructuring agribusiness for the 21st century," Agribusiness, John Wiley & Sons, Ltd., vol. 11(6), pages 493-500.
    12. Dayton Lambert & Tim Wojan & Patrick Sullivan, 2009. "Farm Business and Household Expenditure Patterns and Local Communities: Evidence from a National Farm Survey," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(3), pages 604-626.
    13. Roe, Brian E. & Stockberger, Aaron, 2004. "Explaining Economic Linkages Between Farms And Local Communities: Looking Beyond Farm Size," 2004 Annual meeting, August 1-4, Denver, CO 20208, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Jablonski, B.B.R. & Schmit, T.M., 2014. "‘Local’ Producers’ Production Functions and Their Importance in Estimating Economic Impacts," Working Papers 180117, Cornell University, Department of Applied Economics and Management.
    15. Foltz, Jeremy & Zeuli, Kimberly, 2004. "Challenging the Goldschmidt Theory of Rural Purchasing Patterns," Staff Paper Series 475, University of Wisconsin, Agricultural and Applied Economics.
    16. Hennessy, David A., 1996. "Information Asymmetry As a Reason for Vertical Integration," Staff General Research Papers Archive 10422, Iowa State University, Department of Economics.
    17. Matthey, Holger & Royer, Jeffrey S., 1999. "Testing The Impact Of Corporate Farming Laws On Hog Industry Growth: A Partial Adjustment Approach," 1999 Annual meeting, August 8-11, Nashville, TN 21697, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Anderson, John D. & Trapp, James N., 1999. "Estimated Value of Non-Price Vertical Coordination in the Fed Cattle Market," Staff Papers 232529, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    19. Colyer, Dale, 2004. "Environmental Regulations And Competitiveness," Working Papers 19100, West Virginia University, Department of Agricultural Resource Economics.
    20. Kingwell, Ross S., 2002. "Issues for Farm Management in the 21st Century: A view from the West," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 173982, Australian Agricultural and Resource Economics Society.

    More about this item

    Keywords

    Risk and Uncertainty;

    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:waealo:36133. 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/waeaaea.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.