A COMPARISON OF MINNESOTA'S FARM BUSINESS MANAGEMENT ASSOCIATION MEMBERS AND THE USDA'S FARM COSTS AND RETURNS SURVEY

Abstract

Many states have farm record associations which collect individual farm data. This data are used for research, extension, and teaching purposes. However, since membership in the associations is voluntary, the question arises whether the members are representative of the population of all farmers in that area. This study compares farm record data collected through the Southeastern and Southwestern Minnesota Farm Business Management Associations (FBMA) and data obtained through the USDA's Farm Costs and Returns Survey (FCRS). Both data sets were for 1987. By design, the FCRS survey is not subject to the self-selection bias that may occur in the FBMA data. The objectives of this study are to: (1) determine which farm characteristics are statistically the same in the FBMA and FCRS data, and (2) determine the farm size ranges in which FBMA farms are statistically representative of FCRS farms'. FBMA farms were not representative of all farms in their area. FBMA farms do not include small operations. Major differences exist in total tillable acreage, rented land and livestock production, especially hogs. These combined differences result in a substantial difference in net farm income between the two farm categories. However, the FBMA farms reflect FCRS farms' solvency conditions relatively well. FBMA farms were more similar to farms with sales exceeding $60,000 per year but differences still existed. Total acreage, total sales (especially sales of hogs), total expenses, and net farm income were significantly (p .10), the economic performance of the FBMA farms appears to be better than FCRS farms even in larger sizes. On the basis of these findings, the FBMA data cannot be used to represent all farms or even all commercial farms. It does appear that FBMA farms can be used to represent larger farms with livestock. Thus, the FBMA data is not well-suited for estimation of economic relationships to be used in aggregate economic analyses of the agricultural sector.