How ARMS Data Are Used: A Federal Perspective Jim Johnson and Mitch Morehart Data to Serve 21 st Century Agriculture: Expanding the Agricultural Resource Management Survey December 4-5, 2003 St. Louis, Missouri

Use of ARMS Within the Federal Government Scope of the ARMS Survey Program Dissemination of ARMS-Based Reports and Data ARMS Data Availability for 15 States With Largest Value of Agricultural Production Presentation Outline

1.Responding to Congressional Mandates 2.Meeting Executive Branch Responsibilities Held by USDA 3.Developing Statistically Defensible Information Regarding Farm Households, Their Farms, and Resources Used in Production 4.Providing Data to Respond to USDA Policies & Programs 5.Enabling Research to Inform Public and Private Decision makers on Major Agricultural Issues ARMS data are used widely within the federal government

Congressional Mandates Supported by ARMS Cost and Returns Estimates United States Code, Title 7, Chapter 35 A, Subchapter II, Section 1441a…”shall conduct a cost of production study…” Report on the Status of Family Farms United States Code, Title 7, Chapter 55, Section 2266…”shall submit to Congress…report containing current information on trends” Estimates of Net Farm Income by Farm Type Public Law , “Farm Security and Rural Investment Act, Section 1615…..”net income of commercial producers of loan commodities, livestock, and other crop commodities” Prices Paid by Farmers ARMS provides weights for computation of the Prices Paid by Farmers Index, a component used to calculate Parity Prices as required by the Agricultural Adjustment Act of 1933

What does “shall conduct a cost of production study” include? “…study of the wheat, feed grain, cotton, and dairy commodities under the various production practices and establish a current national weighted average cost of production…..shall include all typical variable costs, including interest costs, a return on fixed costs, and a return for management.”

Information for the Family Farm Report 1.Trends in family farm operations and non-family farm operations 2.Information on agricultural and agricultural-related programs 3.Assessment of tax laws and credit 4.Assessment of credit needs of family farms and the extent to which those needs are being met 5.Assessment of how economic policies and trade policies of the United States affect the financial operation of, and prospects for, family farm operations 6.Assessment of the effect of Federal farm programs on family farms and non-family farms that (1) derive the majority of their income from non-farm sources, and (2) derive the majority of their income from farming operations

Requirement for Estimates of Net Farm Income “Each issuance of projections of net farm income…shall include….(1) an estimate of net farm income earned by commercial producers in the United States; and (2) an estimate of the net farm income attributable to commercial producers of each of the following: (a) Livestock. (b) Loan Commodities (c) Agricultural commodities other than loan commodities”

Specific USDA Responsibilities Supported by ARMS National Estimates of Net Income for Farm Sector Agreement Among Office of Management and Budget (OMB), Department of Commerce, and USDA (March 1956)—USDA Produces Estimates of Farm Income for US Government (agreement reported in GAO/GCD-83-1, Dec 1982) Estimates Submitted to Department of Commerce for Inclusion in National Estimates of Gross Domestic Product, Gross State Product and Personal Income Estimates Submitted to Council of Economic Advisers for Use in “Economic Indicators,” a Report Released by the Joint Economic Committee of the Congress Income of Farm Households USDA Release No , May household income concurrent with farm income

Effects of ARMS Main Uses on Survey Development Sample Design: represent all farms, include range of production practices used by farmers, and reflect operator’s household decisions with regard to work and sources of income Questionnaire Content: provide data to produce cost, farm and household income estimates along with other indicators such as weights for prices paid; data capable of underpinning analyses of current and emerging policy issues Timing: meet date for delivery of income estimates to the Department of Commerce

Production Practices and Costs Report ( commodity) Enterprise Linked Household-Farm Survey Phase I: Summer Interview to Screen Participants (May-June) Phase II: Questionnaire Designed to Provide In- Depth Perspective About Chemical Use, Production Practices, etc… (Oct-Dec) Phase III: Questionnaire Designed to Provide In- Depth Perspective About Farm Economics, Household Finances, Farm and Operator Characteristics (Feb-April) National Focus Household-Farm Survey Phase II & III versions linked to support adoption & cost distribution analyses Phase III Versions Linked to support income, financial performance, and structural analyses for households and businesses Phase III Versions Also Linked to Phase II to support assessment of structure and environmental issues State-Level Household-Farm “Core” Survey ARMS greater than the sum of its parts

Dissemination of ARMS-Based Reports and Data Current Conditions and Forecasts ERS Reports on Issues Policy Analysis Periodicals Research Studies Data Products

Current Conditions and Forecasts

Agriculture Income and Finance Outlook Annual report describing the current financial status of U.S. farm businesses and farm operator households.

Enterprise Cost of Production Estimates and Studies

Family Farm Report Annual report describing structural and financial characteristics of U.S farms.

ERS Reports on Issues

Policy Analysis

Periodicals

Technology Adoption Decisions in Dairy Production and the Role of Herd Expansion Land Tenure and the Adoption of Conservation Practices Genetically Engineered Crops for Pest Management in U.S. Agriculture Pest Management in U.S. Agriculture Factors Contributing to Earnings Success of Cash Grain Farms An Analysis of Risk Premia in U.S. Farm-Level Interest Rates Research

Data Products

Report Creator for Farm Business and Farm Operator Household Financial and Structural Data, Enterprise Field Practice, Costs and Returns, and Major States

Example Tables for Major Agricultural States