Technology Adoption, Management Practices, and Financial Performance of New and Beginning Farmers: Evidence from a National Survey

More than 50 percent of current farmers are over age 55, and the number of new farmers replacing them has fallen. This paper examines factors that contribute to the financial performance of new and beginning farmers in the U.S. A weighted regression analysis was used on data from the 2005 Agricultural Resource Management Survey (ARMS) to measure new and beginning farmers’ financial performance given farm and operator characteristics, production and marketing, and risk management strategies. Particular attention was given to the impact of technology adoption and management strategy on financial performance. Results indicate the adoption of Genetically Modified (GM) crops, having a written business plan, controlling variable costs, participation in coupled farm program payment, and participation in marketing contracts lead to higher financial performance while education, age, and off-farm work lowered financial performance for new and beginning farmers.