Valuing Farm Financial Information



such value. This study used a willingness-to-accept experimental auction and survey
questionnaire to elicit values from farmers for their farm financial records and to collect general
record use and demographic information.

One message from this study is that, for the sample of farmers considered, farm records
were extremely valuable. On average, individuals bid $145,657 to give up their farm financial
records. Results also suggest wide diversity in valuations with bids ranging from $100 to
$2,500,000, with close to 50% of bids in the range of $100,000 to $500,000. Some of this
diversity is explained by characteristics of the records and farmers: larger farmers tended to
value their records more as did farmers who spent more time preparing their records. A larger
percentage of farmers with financial training tended to value their records more as did farmers
who used more accurate measures of performance and record keeping practices.

While the bids were wide in range, the majority were not for relative small amounts of
money. The overall high nature of the bids submitted suggests that financial records are indeed
very valuable to most farmers. While farm record keeping might not be a most preferable
activity for a farmer, financial records are a vital part of the farm operation. The result that 25%
of the participants refused to even submit a price for the sale of their records further suggests a
high value to farmers. It appears most farmers have either heeded the words of agriculture
educators or discovered for themselves the importance of financial information.

Financial record keeping is not a new concept that applies directly to field production
practices or sophisticated technology which might keep it from being at the forefront of farmer
conversations, agribusiness periodicals, Extension meetings, or even university research. While
financial record keeping might not be agriculture’s latest focus, it still has an important role in
production agriculture as indicated by this study’s results. Clearly, these findings provide

21



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