Grouping of Farms 



Surveyed farms were grouped into six different homogeneous re- 

 striction classes for determining benchmark farms. Previous work in- 

 dicated that a more detailed grouping of farms on the basis of homo- 

 geneous restrictions gave only slightly different aggregate supply func- 

 tions, but the magnitude of the programming time was considerably 

 greater. 



In selecting representative dairy farms, some assumptions were 

 made as to how a dairy farm could be defined. In this study it was as- 

 sumed that any farm selling milk at the time of the survey would be 

 considered a dairy farm. If milk were not being sold from a farm at the 

 time of the survey, such a farm could be considered as a potential dairy 

 farm if it had resources for at least 20 cows. Farms without sufficient 

 resources for at least 20 cows were not included in the programming 

 phase of the analysis. 



The six farm groupings were as follows: 



Group 1: Nondairy farms, or those with resources for less than 20 

 dairy cows. 



Group 2: Dairy and potential dairy farms on which the forage 

 supply was estimated to permit fewer cows than the 

 winter labor supply or existing dairy building capacity. 



Group 3: Dairy and potential dairy farms on which the forage 

 supply was estimated to permit fewer cows than the 

 winter labor supply or total dairy building capacity 

 (existing capacity plus added space permitted by ex- 

 pansion with real estate mortgages) , but more cows than 

 with existing dairy building capacity. 



Group 4: Dairy and potential dairy farms on which winter labor 

 was estimated to permit fewer cows than the forage 

 supply or the existing dairy building capacity. 



Group 5: Dairy and potential dairy farms on which winter labor 

 was estimated to permit fewer cows than the forage 

 supply or the total dairy building capacity, but more 

 than the existing dairy building capacity. 



Group 6: Dairy and potential dairy farms on which total dairy 

 building capacity was estimated to permit fewer cows 

 than the forage supply or winter labor supply. 



The procedure for grouping of selected farms can be illustrated by 

 the data in Table 4. Information is given on cropland, permanent pas- 

 ture, soil capacity, dairy building capacity, borrowing capacity, and the 

 winter labor supply on six sample farms for a particular area in the 

 study. This information, along with requirements of dairy cows for 

 these items, provides a basis for classifying each of the farms into groups 

 1 through 6. 



Farm 1 in Table 4 represents a nondairy farm in that the number 

 of cows based on (1) the forage supply that could be produced on the 

 land (Row 8), (2) the winter labor supply (Row 9), or (3) dairy bam 



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