Structural Change on Ohio Farms

Future farm size distribution is projected for Ohio farms using Markov chain analysis. Transition matrices used to estimate farm structure are based on changes in gross farm sales and acres farmed between 1986 and 1988. When gross sales is used as a measure of size, growth is projected in the percent of farms in sales categories larger than $100,000. Concurrently, there is a decrease in the percent of farms in the sales categories less than $100,000. Projected farm size distributions based on acres farmed show only slight changes from actual 1988 farm size distributions. Ordinary least squares regression is used to determine those factors influencing changes in farm size and profitability. Results indicate that changes in farm size, as measured by percent change in gross sales, are positively influenced by farm size and farms' enterprise mix. Profitability, as measured by percent return on assets, is positively influenced by farm size and negatively by age