Returns to Equity Capital by Farm Type and Economic Class of Farm - Based on 1970 Data

Sep 4, 2026

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This report analyzes income flows, asset values, and debt by economic class of farms, concluding that the rate of return to equity capital increases as farm economic size grows. For 1970, average returns varied markedly among 12 major farm types, ranging from negative returns on smaller farms to substantially positive returns on larger farms. Results highlight a strong correlation among farm size, farm debt, and rates of return, with additional appreciation effects increasing returns in the United States.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages108

Reading Time4 h 32 min

AccessFree to download

Returns by Farm Types

Factors Affecting Differences in Returns

Conclusions

References

Appendix A: Definitions and Procedures

Appendix B: Returns to Equity in Farm Production Assets and Financial Data by Farm Types

Historic,Archive Document Do not assume content reflects currentscientific knowledge,policies,or practices. a:H01751 ,A413 4,3 s U.S.DEPARTMENT OF COMMERCENational Technical Information Service # Returns to Equity Capital by FarmType and Economic Class of FarmBased on 1970 Data Economic Research Service,Washington,D( 100 # RETURNS TO EQUITY CAPITALBY FARM TYPE AND ECONOMIC CLASS OF FARM,BASED ON 1970 DATA By J.Bruce Hottel and Robert D。Reinsel Economic Research Service | U.S。 | Department of Agriculture | | --- | --- | | | REPRODUCED BY | | | NATIONAL TECHNICAL | | | INFORMATION SERVICE
U.S.DEPARTMENT OF COMMERCE
SPRINGFIELD,VA.22161 | | | | | | | # NOTICE THIS DOCU MENT HAS BEEN REPRODUCEDFROM THE BE ST COPY FURNISHED US BYTHE SPONSORING AGENCY. ALTHOUGH ITIS RECOGNIZED THAT CERTAIN PORTIONSARE ILLEGIBLE,IT IS BEING RELEASEDIN THE INTEREST OF MAKING AVAILA BLEAS MUCH INFORMATION AS POSSIBLE. | BIBLIOGRAPHIC DATA
SHEET | 1.Report No.Interim Accession
No.AGERS-40 | 2. | | PB281597 | | | --- | --- | --- | --- | --- | --- | | 4.Title and Subtitle
RETURNS TO EQUITY CAPITAL BY FARM TYPE AND ECONOMIC CLASS
OF FARM,BASED ON 1970 DATA | | | | 5.Report Date
September 1977 | | | | | | | 6. | | | 7.Author(s)
J。Bruce Hottel and Robert D。Reinsel | | | | 8.Performing Organization Rept.
No. AGERS-40 | | | 9.Performing Organization Name and Address.
National Economic An3lysis Division
Economic Research Service
U.S.Department of Agriculture
Washington,D.C。20250 | | | | 10.Project/Task/Work Unit No. | | | | | | | 11.Contract/Grant No. | | | 12.Sponsoring Organization Name and Address
Same as box 9 | | | | 13.Type of Report &Period
Covered
Final,1970 | | | | | | | 14. | | | 15.Suplementary Notes Provides supplementary data for "Returns to Equity Capital by Economic
Class of Farm,"Economic Research Service,U.S.Department of Agricu1ture,AER-347,
August 1976. | | | | | | | 16.Abstracts
This report analyzes income flows,asset values,and debt by economic class of farm
and concludes that the rate of returns to equity capital grows as the economic size
of the farm increases.For 1970,average rates of return to equity capital varied
substantially among the 12 major farm types. Returns to equity were generally nega-
tive on smaller farns but increased substantially with size。A close correlation
existed between farm size,farm debt,and rates of returns to equity。The range in
returns was from -6.5 percent on the smallest farms to +6.8 percent on the largest
farms.Additional returns due to appreciation in land values,increased the U.S.
returns from 2.1 percent to 5.6 percent in 1970. | | | | | | | 17.Key Words and Document Analysis.17a.Descriptors
Assets
Capital
Farms
Income
Liability
17b.Identifiers/Open-Ended Terms
Debts
Farm income
Returns to equity
Type of farm
17c.COSATI Field/Group 02-B,05-C | | | 21.1
19.Securicy Class(Ihis
Report)
UNCLASSIFIED | | | | 18.Availability Statement
Available for sale only from National Technical
Information Service,5285 Port Royal Road,
Springfield,Virginia 22161. | | | | | | | | | | 20.Security Class(This
Page
UNCLASSIFIED | | 22.Price
A6-AO/ | FORM NTIS-35(莫EV。10-73) ENDORSED BY ANST AND UNESCO. THIS FORM MAY BE REPRODUCED UscOMM-DC 8265-P74 CONTENTS Page ……………………………iv Summary……………………………………………………………… Introduction……………………………………………………………………………… Procedure………………………………………………………………………………………………………………………………………………………2 2 Returns by Farm Types…………………………………………………………………………………………… Factors Affecting Differences in Returns……………………………… 4 Conclusions…………………………………………………………………………………………………………………………………………………18 References………………………………

FAQs

What does the report conclude about returns to equity capital and farm size?

Returns to equity capital grow as the economic size of the farm increases. Smaller farms show generally negative returns, while larger farms show substantially higher positive returns.

How did average rates of return vary among farm types in 1970?

Average rates of return differed substantially among 12 major farm types, ranging from less than 0.2% for livestock ranches to 8.4% for poultry farms.

What relationship does the report identify between farm debt and returns to equity?

A close correlation exists between farm size, farm debt, and rates of return to equity. Higher debt-to-equity ratios and cost of borrowed funds are linked to higher earnings per dollar of equity.

Sep 4, 2026

Uploaded by Mali