Overview
The ERS farm income program measures, forecasts, and
explains indicators of economic performance for the U.S.
farm sector and for the agricultural sectors within states.
The program's analyses and data are used by USDA and other
clients in both the public and private sector to form
a perspective about the financial health of the U.S. agricultural
economy. Distributional analyses identify subsectors and
business types that are performing well relative to past
trends and to other groups and types of farms. Identification
of these businesses enables analysts to examine more closely
factors contributing to differing levels of financial
performance, such as assessment of debt repayment difficulties
for specific farm types, industry subsectors, and regions
of the country.
Income forecasts and estimates provide perspective regarding
not only the sector’s financial status but also its contribution
as a key sector of the national economy. ERS analysts
support estimation of the national income and product
accounts by contributing estimates for farm earnings,
expenditures, and value-added to be incorporated into
these vital national statistics. Economic trends can be
determined and analyzed using data related to production
and marketing of commodities, expenditures for types of
inputs, income by State, income by size of farm, and the
role of government in supporting the sector.
A goal of this ERS program is to measure the distribution
of farm earnings among the providers of land, labor, capital,
and managerial inputs used in production through analyses
of sector value-added accounts. Special attention is paid
to the contribution of farm operators, land owners, and
providers of production contracts. Results obtained from
the project will expand knowledge concerning factors that
affect the value-added, profitability, and financial performance
of the U.S. agricultural sector and will help answer questions
regarding the effect of farm policy adjustments contained
in the 1996 Farm Act on the level and distribution of
income and asset values.
Ongoing and planned research is organized in two projects:
Measuring Value-Added at the Farm Level
ERS has traditionally estimated income of the farm
sector as a whole. Recently, ERS switched to estimating
value-added for the farm sector to provide a more complete
assessment of the total output and returns generated by
factors used in agricultural production. This project
combines value-added measurement concepts with farm-level
production and input acquisition information from the
Agricultural Resource Management Study (ARMS) to develop
a value-added account for each farm. Resultant estimates
of value-added generated by farm business establishments
are used to assess the relative distribution of farm business
returns among suppliers of the factors of production.
Attention focuses on returns to operators of small farms,
as defined by the USDA National Commission on Small Farms,
and larger family farm businesses. Contact: Ted
Covey.
Analyzing Financial Forecast Methods
A review of forecast models used to generate projections
of net income and cash flow has been undertaken with the
dual purpose of updating the structure and relationships
in each model and achieving greater integration among
models. Forecast models and baseline models are distinctly
different and are independently operated. Model structure
and relationships are assessed to determine how well they
represent today's farm sector. Contact: Roger Strickland.
|
