A recent University of Minnesota extension survey of farmers in southwest Minnesota collected nonfinancial characteristics in addition to the farm’s financial information. And it found some interesting results.
The survey included questions on formal education, farmers' attitudes toward management, their situation, and other potential reasons that are frequently mentioned by farmers when discussing performance.
“For our data analysis, the farms were ranked on the basis of net farm income per operator and on rate of return on assets (ROA-market basis), and then divided into the top 25 percent and the remaining 75 percent groups for each measure,” explains Kent Olson, University of Minnesota extension economist. The scores and measures for many answers and measures were then estimated by group and compared to see where the top group was significantly different from the other 75 percent of farmers.
The preliminary analysis points out several factors which farmers potentially can control or change.
Factors which have an overall positive impact on either net farm income per operator or ROA include having a positive attitude:
- The farmers’ attitude that they control their own destiny and that farming has a bright future.
- Setting and striving for goals.
- Paying a higher wage (for good people).
- Being involved in a custom work enterprise to increase the efficiency in using their machinery.
In addition, farmers in the top group were more likely to agree with the statement that their concern for the environment affected their decisions. More profitable farmers were more likely to own more crop acreage and have more employees, but this may be more of a result of profitability than a cause of higher profitability, says Olson.
Overall negative factors related to being in the top group included the value they placed on an income statement (which may be a reflection of the top being more interested in leading indicators of income production versus an after-the-fact statement of income).
Source: University of Minnesota