The same procedure was used to rank the factors for each of the three types of producer
groups. Tables 5, 6, and 7 contain the factor rankings for crop, livestock, and diversified
operations. The top three factors for all farms also rank high for the production specific groups,
but a few differences are revealed in the different groups. The standard deviation of the net cash
farm income has a significant positive correlation to success for crop farms and ranks as the
fourth most important factor. However, the same risk measure is not a significant factor for
livestock or diversified operations.
Table 5. Financial Factors and Correlation to Success for All Crop** Farms
|
Factor |
Rank |
Correlation |
t-statistic* |
|
Expense / Receipts |
1 |
-0.447 |
8.305 |
|
NCFI / Acre |
2 |
0.372 |
6.663 |
|
Interest Exp / Receipts |
3 |
-0.278 |
4.808 |
|
NCFI Standard Deviation |
4 |
0.249 |
4.279 |
|
Debt / Assets |
5 |
-0.244 |
4.188 |
|
Crop Receipts / Acre |
6 |
0.166 |
2.800 |
|
Intermediate Term Debt / Acre |
7 |
0.083 |
1.382 |
|
Off-Farm Income |
8 |
-0.082 |
1.364 |
|
Real Estate Investment / Acre |
9 |
-0.078 |
1.299 |
|
Depreciation / Receipts |
10 |
-0.056 |
0.930 |
|
Long Term Debt / Acre |
11 |
0.046 |
0.766 |
|
Family Living Expense |
12 |
-0.013 |
0.217 |
|
Equipment Investment / Acre |
13 |
0.009 |
0.146______________ |
*Bold t-statistics are significant at 95%
**Crop sales account for more than 75% of all farm receipts