TITLE : FARM BUSINESS MANAGEMENT: THE DECISION MAKING PROCESS. 2ND ED.*

Contents
1. Introduction
 
1 THE DECISION-MAKING PROCESS 3
Introduction 3
What Makes a Successful Manager? 5
A Classification of Decisions 9
Problems Faced by the Farm Manager 11
Tools of Farm Management 12
The Social and Economic Environment 14
 
2 ECONOMIC PRINCIPLES 18
Introduction 18
The Production Function 19
Diminishing Returns 23
The Three Stages of Production 24
Deciding upon the Level of Inputs 25
Deciding upon the Level of Production 28
Deciding on the Combination of Inputs 32
Deciding on the Combination of Products 35
Appendix to Chapter 2 38
 
3 FARM MANAGEMENT INFORMATION 45
Enterprise Record Systems 46
General Farm Record Systems 50
Supplemental Records 54
Valuation of the Farm Inventory 56
Depreciation 60
The Income Statement 66
The Net Worth Statement 69
 
4 ANALYSIS OF FARM MANAGEMENT
INFORMATION 73
Measures of Financial Success 73
Measures of Capital Position 75
Measures of Size 78
Measures of Efficiency 81
Analysis Procedure 84
Enterprise Analysis 86
Enterprise Analysis and Decision Making 89
 
5 THE FARM BUDGET 92
The Total Farm Budget 93
The Farm Budget 10Z
Budget Comparison of Farm OrganizationsAn Illustration 104
The Partial Budget 107
Partial Budgeting-An Illustration 111
The Use of Budgets 114
The Cash-Flow Budget 116
Price and Yield Assumptions for Budgeting 120
 
6 THE COMPUTER AS A FARM MANAGEMENT
TOOL 125
The Computer 125
Farm Management Information 127
Analysis 131
Budgeting and Linear Programming 132
Linear Programming-An Example 134
Farm Management Games and Simulation 137
 
7 RISK AND UNCERTAINTY IN FARMING 140
Decision Criteria Under Risk and Uncertainty 144
Farmer Defense Against Risk and Uncertainty 146
Uncertainty Precautions 151
 
111. Acquisition and Organization
     of the Factors of Production
 
8 THE ACQUISITION OF CAPITAL 159
The Role of Capital 159
The Amount of Capital to Use 163
The Basis for Credit 165
The Need to Shop for Credit 166
Structural Change and the Acquisition of Capital 170
Sources of Credit 172
Public Sources of Capital in Agriculture 176
Corporation Farming 178
Consumer Credit 181
 
9 THE ACQUISITION OF LAND 184
To Own or to Rent? 184
Buying a Farm 187
Renting Land 192
Improvement of Farm Leases 196
 
10 ENTERPRISE SELECTION AND
FARM SIZE 203
The Location of Agricultural Production 203
The Principle of Comparative Advantage 204
Factors Affecting Location 206
Enterprise Relationships 207
Specialization and Diversification 209
Diversification, Risk, and Uncertainty 211
Combining Enterprises 214
Costs and Returns as Related to Size 220
Factors Affecting Costs 224
Cost-Size Relationships Illustrated 227
Multiple-Enterprise Farms and Size 229
 
IV. Managing the Organized Farm
 
11 CROP MANAGEMENT 235
Principles of Crop Selection 235
Development of a Cropping System 243
Soil Conservation 248
Fertilization Practices 250
Water Management 254
Interaction Among Inputs 261
 
12 LIVESTOCK MANAGEMENT 264
Livestock Resource Requirements 264
Risk and Uncertainty 266
Size of Enterprise 269
Operating Decisions 271
Markets and the Timing of Production 275
Cyclical Price Changes 279
 
13 THE MANAGEMENT OF LABOR 283
Objectives of Labor Management 283
The Labor Input on Commercial Farms 285
Labor Productivity-Quantity of Labor and Capital Fixed 287
Labor Productivity-Labor Fixed, Capital Variable 289
Labor Productivity-Labor and Capital Variable 291
The Price and the Supply of Labor 295
Rate and Method of Pay 296
Fringe Benefits 298
Employer-Employee Relationships 299
Labor Records 299
The Calendar of Operations 301
 
14 MACHINERY MANAGEMENT 306
The Proportion of Machinery to Other Inputs 307
New Versus Used Machinery 311
Economizing on Machinery Investment 313
Size Relationships 318
Type of Machinery 322
 
Appendix 325
 
Index 331