|
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.
|
