Taking a Closer Look at the Most Efficient Farms

Taking a Closer Look at the Most Efficient Farms

Chart showing 2009-2018 net farm incomes for average farmers and top efficient farms

A quarter doesn’t buy much these days so it’s easy to dismiss the value, but when 25 cents is what separates the cost of production per bushel of corn between two groups, the difference in net return starts to add up.

In 2018 the net farm income average of all farms included in the Nebraska Farm Business, Inc. group was $94,121. That was a surprisingly high number, but when compared to the net income of $261,059 for the group called the Top Efficient Farms, it shows there is a significant difference. The Top Efficient Farms group is a selection of operations included in Nebraska Farm Business, Inc’s group that consistently retain more than 20% of gross income as net. These farms are not the highest efficiency farms each year, they are just the most consistent from year-to-year.

Chart 1 shows the trend of net farm income for the last ten years between the two groups. The Top Efficient group consistently keeps more of their gross income than the average of all farms. Both groups have comparable gross farm income so we know that size of the operation is not the difference.

Continue Reading in this week's Cornhusker Economics, published by the Department of Agricultural Economics.