Managerial Performance and Income Variability for a Sample of Illinois Cash Grain Producers

Managerial ability generally is considered a key determinant of success in farming. This analysis evaluates managerial performance over the period 1976-1983 for a sample of 179 Il-linois cash grain producers. Characteristics of the superior and inferior performing groups are presented and the variability of performance is assessed. Management and decision making process have long been a concern of both scholars in academia and of actual decision makers. Within the last five years a number of books have achieved best-seller status, even though focused on the seemingly mundane topic of decision making in large corporations (Hellor, Iacocca, and Peters and Waterman). This heightened interest in managerial performance undoubtedly arises from the turbulent eco-nomic conditions of the last two decades and the resulting pressures on the competitiveness of American firms. Agricultural economists have a rich tra-dition of analysis and education related to the role of decision making in the management process (Jensen; Johnson et al.). Inspection of a sample of popular farm management texts finds that the lead chapter in each relates to management processes and decision making (Kay; Harsh, Conner and Schwab; and Osburn and Schneeberger). Although it is widely per-ceived that the manager's input is important, there has been relatively little work that rig-orously analyzes managerial performance of farm decision makers. For farm firms, a par-ticularly important feature is evaluation of performance over several annual cycles. Be-cause of the inherent biologic uncertainty of many agricultural processes, as well as income variability due to sudden price shifts and changes in government policies, it is essential that a long run viewof performance be adopted