Use of Firm Level Agricultural Data Collected and Managed at the State Level for Studying Farm Size Issues

Individual farm financial data are collected in about two dozen states by colleges of agriculture, farm record associations and state vocational-technical school programs. A wide variety of methods are used by the various systems to calculate measures of profitability, making it difficult to make comparisons across states or to use data from several states to study farm size issues. This paper reviews some of the issues related to measuring profitability such as asset valuation, appreciation of assets, depreciation, interest changes, and value of operator and family labor and management. Data from three states are used to relate farm size to profitability. In general, larger farms have higher net returns regardless of the measure of profitability used, but this is not true in all states in all years.