Missouri Dairy Farmers’ Survey

Survey Class Participants: Baatar Baljmar, Andrew Craver, Anne Felts, Keith Harris, Dianna Janashia, Billystrom Jivetti, Ryan Koury, Robin Loehner, Mario Mondelli, Amber Moody-Dyer, Mathew Pezold, Della Streaty Willhoit

Division of Applied Social SciencesUniversity of Missouri September 30, 2010

Report compiled by: Mario Mondelli

Anne FeltsSarika Cardoso

Dr. David O’BrienContact: obriendj@missouri.edu

RESEARCH QUESTIONS

Q.1: Which farmers intend to stay in business?

Q.2: Which farmers are most change-oriented?

Methodology: Sample Survey• Sample Frame: DFA member farms in Missouri• Stratified by Farm Size• Surveys included in analysis: 145 (22% resp. rate)

Table 1. Proportion of Different Farm Sizes in the SampleUniverse

(DFA member l ist)Mailed Responded

(n) (n) (n) *10-49 cows 481 220 4350-99 cows 229 220 61100-199 cows 80 80 34200+ cows 29 29 7TOTAL 819 549 145

Farmers with less than 10 cows were eliminated from the sample* Based on farmers response to question: number of cows. Missing=3

Figure 1. Educational Level of the Sample

< 12y Schooling 19%

High School Diploma 48%

Some College 19%

Bachelor’s Degree 11%

Post-Grad 2%

Figure 2. Ethnic Background of the Sample

German

46%

English, 19%

other, 24%

missing, 11%

Figure 3. Organizational Structure of Sample Farms

Production System Legal form

Confined 8%

Mixed,

39%

Pasture-Based, 43%

Intensive Rot. Graz., 7%

In-cor-po-

rated, 12%

Legal Partner-ship, 12%

LLC, 5%

Sole Pro-pri-etorship. 63%

Comparison of Sample Characteristics and MO and National Data

 Dairy

FarmersGeneral

Population

 MO

(sample) MO* US*< 12y Schooling 19% 19% 20%High Sch. Diploma 48% 33% 29%Some College 19% 27% 27%Bachelors 11% 14% 16%Post-Grad 2% 8% 9%

* Source: 2000 Census of Population.

Table 3. Comparison with general population in US and MO

 Dairy

Farmers    MO

(sample) MO* US*Milk cows per farm 80 42 133By type of organization:

Family or individual 69% 88% 86% Partnership 13% 8% 8% Corporation 13% 3% 4% Other 5% 2% 1%

Principal operator       Average age (years) 52.5 57.1 54.9 Male 90% 88% 70% Female 10% 12% 30%

* Source: Census of Agriculture 2007

Table 2. Comparison with farms in US and MO

NW-NC8%

West7%

East4%

Southwest25%

SouthCentral

29%

Central27%

Figure 4. Regional Distribution of the Sample

N=145 dairy farmers

Table 4. Demographic and Organizational Characteristics by Farm Size

confined or mixed

(%) (mean)

pasture-based or IRG(%) (mean)

Milk Production

10-49 cows 62% 38% 40,925 50-99 cows 52% 48% 81,078 100-199 cows 35% 65% 145,407 200+ cows 57% 43% 272,786 Total 40% 60% 93,885

Nage

(y) (mean)

education(attended>12y)

(%)

german ethnicity

(%) (mean)

Church involment*(1-5) (mean)

Coumminity attachement**

(1-5) (mean)10-49 cows 43 52.3 26% 44% 3.5 3.950-99 cows 61 53.8 31% 65% 3.3 3.7100-199 cows 34 50.9 41% 60% 4.0 4.0200+ cows 7 49.4 71% 80% 2.8 4.0Total 145 52.5 34% 58% 3.5 3.9

* Q: I'm very involved in my church ; ** Q: I feel connected to my community

Main points:• As expected, larger size is associated with:

higher educationHigher productivity

•For other variables, there is no clear pattern by the size of the farm

Which Farmers Intend to Stay in Business?

Dependent Variable: Intent to Stay in Business• Scale based on respondents’ level of agreement (1-5)

with the following questions:– I encourage my children to enter the dairy business– I intend for my children to take over the farm– I will still be in the dairy business in 3 years / 5 years / 10 years– I would (not) like to switch to another profession

• α Reliability = 0.72• Mean = 3.50; Standard Dev. = 1.16

Independent Variable Scale: Management Adaptability

• This scale is based on respondents’ level of agreement (1-5) with each of the following statements:– I actively monitor & review management strategies– I actively meet with partners to discuss mgmt strategies– I actively meet with partners to discuss business plan

• α Reliability = 0.85• Mean = 3.34; Standard Dev. = 1.32

Independent Variable Scale: Optimism

• This scale is based on the respondents’ assessment of how viable (range of 1-5) will be the following in the next 5 years:– Missouri dairy industry– Farmer’s local dairy industry– Own farm

• α Reliability = 0.83• Mean = 2.91; Standard Dev. = 0.91

o

Coef. Rob. Std. Err. p<Nonconventional knowledge (1-5) 0.09 0.09 0.34Management Adaptability (1-5) 0.23 *** 0.09 0.01Financial Adaptability (1-5) -0.14 0.14 0.30Environmental Adaptability (1-5) 0.17 0.36 0.64Optimism (1-5) 0.49 *** 0.10 0.00Has or plan to change prod syst -0.36 * 0.19 0.07

Productivity (lbs/cow) 0.00 0.00 0.49Size: Cows (heads) 0.00 0.00 0.30Age (farmer) -0.02 ** 0.01 0.03

Education (dummy=1 if attended>12years) -0.34 * 0.19 0.07Operator/spouse have non-farm job (dummy) 0.22 0.19 0.23

Farmer has children (dummy) -0.38 * 0.22 0.09Community attachment (1-5)

0.18 ** 0.09 0.04German Ethnic Origin (dummy) -0.08 0.19 0.66Incorporated Firm (dummy) 0.14 0.29 0.63Legal Partnership (dummy) 0.05 0.25 0.83Limited Liability Corporation (dummy) 0.02 0.46 0.97Confined prod system (dummy) 0.62 *** 0.24 0.01Mixed prod system (dummy) 0.70 *** 0.22 0.00

Intensive Rot Grazing (dummy) -0.34 0.31 0.27Region South-West (dummy) 0.41 ** 0.21 0.05Region West (dummy) 0.08 0.43 0.86

_constant 1.51 0.70 0.03

Table 5. OLS Regression of Intent to Stay in Businesson Selected Independent Variables (miss. mean subst.)

Number of obs. = 136 F( 22, 113) = 8.85 Prob > F = 0.000 R-squared = 0.463 Root MSE = .927

Table 6. Conclusions on Question 1

A dairy farmer’s greater desire to stay in business is associated with:• Higher Management Adaptability• Being more optimistic about his/her farm and the dairy industry• Less likely to change the production system• Being younger• Having less education• Not having children• Being attached to the local community• Having a confined or mixed production system (compared to a

pasture based production system)• Being in Southwest Missouri

Desire to stay in business is Not associated with:• Farm Size ( number of cows)• Productivity

Question 2: Which Farmers are Most Change-Oriented?

Dependent (Dummy) Variable: Change Production System

1 = farmer has changed dominant production system over the past 5 years or intends to change the system over the next 5 years

• 18.1% (26 out of 144 respondents)0 = farmer did not change his dominant production system over

the past 5 years and has no intent to change over the next 5 years

• 81.9 % (118 out of 144 respondents)

Independent Variable Scale: Non-Conventional Knowledge

• The scale is based on responses (1-5) to the following:– Frequency of communication via computer– Knowledge of pasture-based systems– Knowledge of rotational grazing systems

• α Reliability = 0.62• Mean = 3.19; Standard Dev. = 1.02

Has or plan to change production system: yes nomean t-

test

N of Obs 26 118

Nonconventional knowledge (Scale 1-5) 3.6 > 3.1 **

Management Adaptability (Scale 1-5) 3.5 > 3.3 ns

Intent to stay in business (Scale 1-5) 3.6 > 3.5 ns

optimism (Scale 1-5) 3.2 > 2.8 *

Age (farmer) 47 < 54 **

Education (dummy=1 if attended>12years) 46% > 31% ns

Cows (number) 87 > 79 ns

Mixed prod system (dummy) 60% > 36% **

Pasture based prod system (dummy) 19% < 49% ***

Legal Partnership (dummy) 17% > 12% ns

Incorporated Firm (dummy) 21% > 11% ns

*** Significant at the 1% level; ** Sig. at the 5% level; * Sig. at the 10% levelns = non significant difference

Table 7. Univariate Differences BetweenChange and No Change Farmers

FarmCharact-eristics

FarmerCharact-eristics

Odds Ratio Rob. Std. Err. P>zNonconventional knowledge (1-5) 2.63 *** 0.93 0.01Management Adaptability (1-5) 0.88 0.27 0.67Financial Adaptability (1-5) 0.79 0.31 0.54Intent to stay in business (1-5) 0.48 ** 0.15 0.02Optimism (1-5) 1.70 0.69 0.19Age (farmer) 0.95 ** 0.02 0.04Education (dummy=1 if attended>12years) 1.22 0.81 0.76Operator/spouse has non-farm job (dummy) 2.32 1.47 0.19Farmer has children (dummy) 0.44 0.37 0.32I'm very involved in my church (1-5) 0.88 0.23 0.63Size: Cows (heads) 0.99 0.01 0.45Productivity (lbs/cow) 1.00 0.00 0.95Confined prod system (dummy) 9.95 ** 11.63 0.05Mixed prod system (dummy) 20.17 *** 16.54 0.00Intensive Rot Grazing (dummy) 4.02 4.74 0.24Incorporated Firm (dummy) 4.73 ** 3.73 0.05Legal Partnership (dummy) 2.23 2.29 0.43Limited Liability Corporation (dummy) 4.32 4.04 0.12Region South-Central (dummy) 1.79 1.16 0.37Region South-West (dummy) 1.09 0.87 0.91

Table 8. Logistic regression Dependent Variable - Change Production system (dummy=1 if has or plan to change the production system) (missing values: mean substitution)

Num of obs = 136 Wald chi2(20) = 36.00 Prob > chi2 = 0.015Log pseudolikelihood = -48.725 Pseudo R2 = 0.265

• A farmer with one more unit of non-conventional knowledge is 2.63 times more likely to change the production system

• An odds ratio < 1 indicates a negative relationship

How to Interpret Odds Ratios (OR) in Logistic Regression

Table 9. Conclusions on Question 2

The higher propensity of a farmer to change his/her production system is associated with:

• Higher non-conventional knowledge • Lower propensity to stay in the dairy business• A farm with confined or mixed production systems

(compared to pasture-based prod system)• Being an Incorporated farm• Being younger

Change is Not associated with: • Size, Productivity, Education, non-farm job, Regions

Appendix – Additional Data

Descriptive statisticas (after recoding missing values)

Variable Obs Mean Dev. Min Max

d_change_ps Has or plan to change production system 144 0.2 0.4 0 1d_stayinbus Intent to stay in business 140 3.5 1.2 1 5e_conv_know Conventional knowledge. 137 3.3 1.1 1 5e_nonconv_~w Nonconventional knowledge 139 3.2 1.0 1 5e_finan_ad~t Financial Adaptability 119 3.0 1.0 1 5e_env_adapt Environmental Adaptability 125 0.3 0.3 0 1

e_mgmt_adapt Management Adaptability 122 3.3 1.3 1 5e_optimism 129 2.9 0.9 1 5e_prod_sys dairy farming production system 141 0.5 0.5 0 1e_drymatg~46 Specify how much dry matter grown on farm 145 49.6 36.3 0 100e_Nfarmjob11 Primary farm operator or spouse have a non-farm job 144 0.3 0.5 0 1

c1_numcows40 How many cows are milked daily on your farm 145 79.6 57.6 9 345c1_Pdnonfam7 Paid non-family employees 145 0.3 0.5 0 1c2_Agepri4 Age of primary farm operator 145 52.5 11.3 23 82c2_Levedu8 Highest level of education attained by Primary Farm Owner 143 2.6 1.4 1 7c2_Yrsfarm12 How many years has the primary farmer operator worked on farm 142 32.3 14.3 1 67

c3_involc~58 I'm very involved in my church 131 3.5 1.3 1 5c3_connto~58 I feel connected to my community 127 3.9 1.1 1 5c3_german German Ethnic Origin 115 0.6 0.5 0 1c3_english English Ethnic Origin 115 0.2 0.4 0 1c4_incorp Incorporated Firm 133 0.1 0.3 0 1

c4_llc Limited Liability Corporation 133 0.1 0.2 0 1c4_partner Legal Partnership 133 0.1 0.3 0 1c4_Ownfam6 Farm owned by a single family 144 0.9 0.3 0 1c5_Prichild9 Does Primary Farm operator have children 143 0.9 0.3 0 1

Farmer Demographics: Children

• 86% Primary Farm Operators have children• Average number of children = 2.85• 61 % of children were male• 51 % of children work on farm

– 39 % of those that work on farm, work full-time

Ages of children Frequency

Under 15 105

16-25 101

26-39 109

40 + 42

Mode of Communication

Mode of Communication Mean (scale of 1-never to 5-very often)

Email 1.98

Fax 1.94

Home phone 3.84

Cell phone 3.66

Face to face 3.93

Computer/Internet 2.39

Text Messaging 1.38

Frequency of use of the following to communicate farm issues:

Mode of Communication (cont’d)

Information source Mean (scale of 1-never to 5-very often)

Other local dairy farmers 3.22

Other dairy farmers, non-local 2.48

Dairy magazines 3.43

Independent consulting nutritionist 2.09

Feed company-provided nutritionist 3.14

Consulting veterinarian 3.29

Emergency call veterinarian 2.75

Extension personnel 2.40

Extension website and publications 1.92

DTN 1.36

Cooperative communication 2.22

How often does the Primary Farm Operator use these as sources of farm information?

Involvement in Agricultural Organizations

Agricultural organization in which PFO is involved

Frequency

Missouri Dairy Association 33%

Farm Bureau 35%

Other Cooperative 198

National Corn Growers’ Association

3%

American Soybean Association 1%

28% of Primary Farm Operators reported holding leadership positions in one or more of these agricultural organizations

All respondents were members of Dairy Farmers of America

Environmental Management• 90% (n=108) of Respondents have not received a complaint about

environmental issues in the past 12 monthsPercent of Respondents Answering that They Have Used Each of the Following to Mitigate Environmental Damage

% YES Total respondents

Water Quality 51 101Manure 72 100Nitro/Phosph Emissions

18 100

Energy 12 99Nat R Inputs 15 99

Analysis of Services used by Primary Farm Operator

Service Use Service Quality (1-5) Not interested

Legislative Communication or Representation

20% 3.03 55%

Health Insurance 64% 3.38 17%

Price/Cost Risk Management

13% 3.65 60%

Banking/Financial Services

82% 3.96 17%

Pasture Dairy Resources

20% 3.81 59%

Estate Planning 22% 3.34 50%

Environmental Compliance Services

21% 3.56 52%