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Following beginning farm income and wealth over time: A cohort analysis using ARMS

James M. Williamson (Department of Agriculture, Economic Research Service, Washington, District of Columbia, USA)

Agricultural Finance Review

ISSN: 0002-1466

Article publication date: 2 May 2017




The paper examines the evolution of beginning farms’ income statement and balance sheet items over a 15-year period. The purpose of this paper is to gain insight into the diversity of beginning farms from a financial point of view.


Using the USDA’s Agricultural Resource Management Survey (ARMS), the author constructs a synthetic panel of data consisting of age cohorts of beginning farmers and follow them over time. Baseline financial information for the farm income statement and balance sheet is examined in 1999 and again in 2014 for each cohort.


Overall, there is a marked contrast in the evolution in the income statement between beginning farmers who are under 45 years old and those over 45. The gross cash income of the youngest cohorts grows tremendously, as do their expenses, indicating rapid expansion in production on the part of the youngest cohorts. The change in the balance sheets of the cohorts also provides a glimpse into the changing roles of beginning famers over time. The youngest cohort of beginning farmers increase the current and non-current assets on their balance sheets by a substantial amount, more than doubling both. Furthermore, the youngest cohort is the only group to take on more current liabilities, indicating increased financing of the production expenses.

Practical implications

Differences in the evolution of financial profiles of beginning farms may predict differences in future output, and it could be a predictor of the farm’s operational goals or intentions, as well as predictor of future financial needs and challenges.


Knowing and understanding likely trajectories of beginning farmers may provide an opportunity to better tailor farm programs, outreach, and support to beginning farmers.



Williamson, J.M. (2017), "Following beginning farm income and wealth over time: A cohort analysis using ARMS", Agricultural Finance Review, Vol. 77 No. 1, pp. 22-36.



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