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Prioritizing Management Focus Areas For Commercial Farms

Author

Listed:
  • Jacqueline Holland

    ()

  • Nicole Widmar

    ()

  • David Widmar

    ()

  • Michael Gunderson

    () (Department of Agricultural Economics, College of Agriculture, Purdue University, W. Lafayette, IN)

  • David Ortega

    () (Department of Agricultural, Food, and Resource Economics, Michigan State University, East Lansing, MI)

Abstract

Farm management is a series of complex processes incorporating a variety of dynamic factors, including biological production systems, resource allocation and management, and the management of increasingly complex financial and economic systems. Farm managers are constantly required to prioritize and allocate management effort and attention amongst these factors and evaluate tradeoffs. This analysis elicited from commercial producers the relative ranking of five critical farm management focus areas, namely, managing production; managing land, equipment, and facilities; controlling costs; managing output prices; and managing people. Out of a total of 2,247 commercial farms in this study, the largest mean shares of importance were placed on controlling costs (28.6%) and managing production (27.3%). Producers, on average, emphasized the management areas of controlling costs and managing production, relative to managing land, equipment, and facilities; managing people; and managing output prices, for farm success. Correlations between the farm management focus areas studied were estimated from producer-specific share of importance estimates resulting from a random parameters logit model; the strongest correlation observed was the negative relationship between managing production and controlling costs. Implications for self-identified success factors, or critical areas of management focus, of commercial farms are far reaching, potentially influencing sales, marketing, and decision support for these operations, as well as driving research and programmatic focus to provide relevant information to these producers moving forward

Suggested Citation

  • Jacqueline Holland & Nicole Widmar & David Widmar & Michael Gunderson & David Ortega, 2016. "Prioritizing Management Focus Areas For Commercial Farms," Working Papers 16-1, Purdue University, College of Agriculture, Department of Agricultural Economics.
  • Handle: RePEc:pae:wpaper:16-1
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    Keywords

    farm management; on-farm decision making; producer preferences;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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