United 

States

Department of

Agriculture

2015

ARMS III

Agricultural Resource Management

Survey – Phase III

Interviewer’s Manual

National

Agricultural

Statistics

Service

Agricultural

Statistics

Board

Washington, D.C. 

20250

Issued:

November 2015
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Table of Contents

1 General .............................................................................................................................. 1

1.1 Purpose ....................................................................................................................... 1

1.2 Data Collection Phases................................................................................................ 1

1.3 Uses of ARMS Data..................................................................................................... 2

1.4 ARMS Products ........................................................................................................... 2

1.4.1 NASS Reports ...................................................................................................... 3

1.4.2 ERS Reports & Other Uses of ARMS Data ........................................................... 3

1.4.3 Non-Financial Data in ARMS Phase III ................................................................14

2 Terms and Definitions ...................................................................................................... 1

2.1 General........................................................................................................................ 1

2.2 Economic and Cost of Production Terminology............................................................ 1

2.3 Livestock Production Categories.................................................................................. 4

2.3.1 Hog Contractee Operations .................................................................................. 4

2.3.2 Chicken Contractee Operations ............................................................................ 4

2.3.3 Turkey Contractee Operations .............................................................................. 5

3 Survey Procedures ........................................................................................................... 1

3.1 General........................................................................................................................ 1

3.2 Survey Materials .......................................................................................................... 1

3.3 Questionnaire Versions................................................................................................ 2

3.4 Respondent Booklet..................................................................................................... 2

3.5 Respondent Burden..................................................................................................... 2

3.6 Entering Data............................................................................................................... 3

3.7 Planning Your Work..................................................................................................... 3

3.8 Interviewing.................................................................................................................. 3

3.9 Fiscal Year versus Calendar Year................................................................................ 6

3.10 Non-Response............................................................................................................. 6

3.11 Supervision.................................................................................................................. 6

3.12 Completed Questionnaires........................................................................................... 6

4 Face Page and Screening................................................................................................. 1

4.1 Face Page ................................................................................................................... 1

4.1.1 Introduction........................................................................................................... 1

4.1.2 Target Label (ALL Versions) ................................................................................. 2

4.2 Screening Information.................................................................................................. 3

4.3 Interview Completion Times......................................................................................... 3

4.3.1 Beginning & Ending Times.................................................................................... 3
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4.3.2 Time in Hours ....................................................................................................... 4

4.4 List Frame – Verification of Sampled Operations ......................................................... 4

4.5 Area Frame – Verification of Sampled Operations ....................................................... 4

4.6 Screening Box on Face Page ...................................................................................... 5

4.6.1 Completing the Screening Supplement................................................................. 5

4.7 Special Situations – Managed Operations ................................................................... 9

5 Completing the Questionnaire ......................................................................................... 1

5.1 Introduction – Layout ................................................................................................... 1

5.2 Section A – Land in Farm/Ranch ................................................................................. 1

5.2.1 Section Purpose ................................................................................................... 1

5.2.2 Acres Operated..................................................................................................... 1

5.2.2.1 General Instructions for Items 1–5..................................................................... 1

5.2.3 Rented Land ......................................................................................................... 6

5.2.3.1 Land Rented From Others................................................................................. 6

5.2.3.2 Land Rented To Others..................................................................................... 9

5.3 Section B—Acreage, Production, and Cash Sales......................................................11

5.3.1 Section Purpose ..................................................................................................11

5.3.2 Crop Acreage and Production: Item 1 ..................................................................11

5.3.2.1 General Instructions .........................................................................................11

5.3.2.2 Crop Columns 1–5 ...........................................................................................12

5.4 Section C Livestock ....................................................................................................19

5.4.1 Purpose of Sections.............................................................................................19

5.4.2 Number Sold and/or Removed, On Hand, Owned by Operation and Cash Sales 

Item 2, Columns 2-5...........................................................................................................19

5.5 Section D – Other Ops Growing/Feeding/Raising Livestock for this Operation............26

5.6 Sections E & F – Marketing & Production Contracts ...................................................28

5.6.1 Overview..............................................................................................................28

5.6.1.1 Special Topics..................................................................................................32

5.6.2 Section E – Marketing Contracts..........................................................................34

5.6.3 Section F – Production Contracts.........................................................................37

5.6.3.1 Specialty Operations: Examples of Livestock on Shares .................................39

5.7 Section G—Accounts Receivable & Deferred Payments.............................................41

5.8 Section H—Government Payments & Other Farm Related Income ............................43

5.8.1 Item 1: Commodity Credit Corporation (CCC) Loans ...........................................43

5.8.2 Item 2—Federal, State, or Local Farm Program Payments ..................................44

5.8.3 Item 3 – Other Farm-related Income....................................................................50
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5.8.4 Item 7– Largest Portion of Gross Value of Sales..................................................53

5.9 Section I – Operating & Capital Expenditures .............................................................54

5.9.1 Introduction..........................................................................................................54

5.9.1.1 General Instructions .........................................................................................56

5.9.1.2 Expenses for Landlords & Contractors .............................................................56

5.9.2 Operating Expenses ............................................................................................59

5.9.2.1 Livestock Expenses: Items 4-8........................................................................60

5.9.2.2 Fuels, Utilities, & Purchased Water (Farm Share Only): Items 9-12 ................63

5.9.2.3 Farm Supplies, Repairs, & Maintenance: Items 13–16 ....................................66

5.9.2.4 Insurance, Interest, & Taxes: Items 17–19 ......................................................68

5.9.2.5 Expenses Related to Hired Workers: Items 23-26 ...........................................71

5.9.2.6 Custom Work: Item 28.....................................................................................75

5.9.2.7 General Business Expenses: Item 32..............................................................77

5.9.2.8 Marketing Expenses:........................................................................................78

5.9.3 Capital Expenses: Items 34-44 ...........................................................................80

5.10 Sections J & K – Farm Assets & Debts .......................................................................86

5.10.1 General................................................................................................................86

5.10.2 Section J – Farm Assets ......................................................................................89

5.10.2.1 General Instructions......................................................................................89

5.10.2.2 Value of Land & Buildings Owned: Item 1....................................................89

5.10.2.3 Value of Trucks, Tractors, Machinery, & Stocks: Item 2...............................91

5.10.2.4 Value of Beginning/End of Year Inventories: Item 3 .....................................91

5.10.2.5 Other Farm Assets: Item 4...........................................................................97

5.10.3 Section K – Farm Debt...........................................................................................99

5.10.3.1 Debt by Lender: Item 3 ..............................................................................100

5.13 Sections L—N: Farm Management & Household Information ...................................105

5.13.1 Section L—Farm Management and Use of Time...................................................107

5.13.1.1 Direct Sales ..................................................................................................115

5.14 Section M—Farm Operator & Household Characteristics..........................................117

5.15 Section N—Farm Operator Household Income, Assets & Debt.................................119

5.15.1 Non-Farm Assets Owned by Operator & Household: Item 3........................121

5.15.2 Previous Year Income: Items 6-8 .................................................................123

5.16 Conclusion................................................................................................................125

5.17 Administrative Items..................................................................................................126
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1 General

1.1 Purpose

The Agricultural Resource Management Survey (ARMS) is the U.S. Department of 

Agriculture’s primary source of information on the financial condition, production 

practices, and resource use of America's farm businesses and the economic well-being 

of America's farm households. ARMS is a nationally representative survey administered 

using several phases—sample screener, field-level, and farm-level phases—targeting 

about 5,000 fields and 30,000 farms each year.

The field-level phase collects information on production practices and costs (fertilizer, 

pesticide, labor, tillage, seed, etc.) for target commodities. The farm-level phase collects 

financial information for farm businesses and a variety of financial and demographic 

information (age, education, occupation, off-farm income, etc.) for farm operators and 

their households. The survey collects information from 48 States and is designed to be 

representative of the continental U.S and to support State-level estimates for 15 key 

agricultural States.

Many policy decisions made in Washington and in the states directly affect U.S. farmers 

and ranchers. The ARMS provides farmers and ranchers with one of the best means to 

ensure that policy-makers have access to accurate and objective information when 

making those decisions. 

1.2 Data Collection Phases

Annually, the ARMS collects production practices and cost of production data on selected 

commodities. The ARMS also collects detailed whole farm financial information from a 

representative sample of farms and ranches across the country. To accomplish this, the 

ARMS project is conducted in three data collection phases. In many ways, the three 

phases can be viewed operationally as independent surveys. However, the power of the 

ARMS design is that the data between phases are related and can be combined and 

analyzed to provide a comprehensive look at farming and ranching operations.

 The initial phase (ARMS – Phase I) conducted from May through July, determines

the status of the business and collects general farm data such as crops grown, 

livestock inventory, and value of sales. Phase I data are used to qualify (or 

screen) farms for the other phases.

 The second phase (ARMS – Phase II) is conducted from September through 

December. This phase collects data associated with agricultural production 

practices, resource use, and variable costs of production for specific commodities.

 The final phase (ARMS – Phase III), which is the focus of this manual, is 

conducted from January through April. Phase III collects whole farm finance and 

operator characteristics information.

Respondents sampled for the Production Practices and Costs Report (PPCR) in Phase 

II will be asked to complete a Phase III report to obtain financial, resource use, and cost 
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of production data for the entire operation. It is vital that both the Phase II and Phase III 

questionnaires be completed for these operations. Data from both phases provide the 

link between agricultural resource use and farm financial conditions. This is a 

cornerstone of the ARMS design.

1.3 Uses of ARMS Data

Farm organizations, commodity groups, agribusiness, Congress, the President, State 

Departments of Agriculture, and the USDA use information from ARMS to evaluate the 

financial performance of farm/ranch businesses and to make policy decisions affecting 

agriculture. Specifically, the ARMS:

 gathers information about relationships among agricultural production, resources, 

and the environment, to support evaluations of these relationships. The data are 

used to understand the relevant factors in producing high quality food and fiber 

products while maintaining the long term viability of the natural resource base

and rural communities;

 determines production costs of various crop and livestock commodities, and the 

relative importance of various production expense items;

 used in the estimates of net farm income and provides data on the financial 

situation of farm and ranch businesses, including the level of assets and debt. 

ARMS data provide the ONLY National perspective on the annual changes in the 

financial conditions of production agriculture;

 provides the farm sector portion of the national Gross Domestic Product (GDP). 

While the farm sector portion may be small, its volatility must be accurately 

measured to identify the sources of change in the overall economy;

 provides the agricultural component of State and Local Area Personal Income 

estimates provided by the Commerce Department’s Bureau of Economic 

Analysis (BEA). These measures are used to drive formulas for distribution of 

federal assistance dollars to communities, and by businesses and state and local 

governments to make local investment and infrastructure decisions;

 identifies the characteristics and financial situation of agricultural producers and 

their households, including information on management strategies and off-farm 

income. ARMS provides the ONLY source of data that link household financial 

resources and outcomes to farm business finances;

 provides baseline commodity cost and return estimates that are used to establish 

annual estimates during the next 4-8 years. Annual commodity estimates are set 

by updating the survey base using changes in annual prices, acreage, and 

production. 

In general, ARMS data benefits farmers directly through governmental policy, like the 

farm bill, that are influenced by ARMS data. Most respondents do not realize the data 

coming from the ARMS helps them indirectly through information from extension 

advisors, in reports issued by State colleges and universities, in farm magazines, 

newspapers, and on radio or TV broadcasts.
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1.4 ARMS Products

Markets cannot operate efficiently without accurate and timely information. As with all 

USDA reports everyone, from the smallest farmer to the largest agribusiness firm, has 

free and equal access to the results from this survey. This access to information allows 

farmers to stay on equal footing with agribusiness firms and others who market 

agricultural commodities. 

New technologies make accessing information easier than ever before. Many farmers 

now own or have access to a computer to review ARMS reports and data summaries on 

the Internet.

Reports and tables using ARMS data can be downloaded from the following NASS and 

ERS Web Sites:

 The NASS Web Site is: http://www.nass.usda.gov

 The ERS Web Site is: http://www.ers.usda.gov

 The ERS ARMS Data User’s Manual is: http://www.ers.usda.gov/dataproducts/arms-farm-financial-and-crop-production-practices.aspx

1.4.1 NASS Reports

NASS publishes two reports from ARMS. The “Agricultural Chemical Use - Field Crops” 

publication (www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Chemical_Use/),

uses data collected in the ARMS Phase II survey, and is normally released the following 

May. 

The second report, “Farm Production Expenditures”, compiled from the ARMS Phase III, 

is released in early August. This report shows expenditures for the U.S., 5 farm 

production regions, 15 major agricultural estimating States, 8 U.S. economic sales 

classes, and U.S. crop and livestock farms

(http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1066). 

1.4.2 ERS Reports & Other Uses of ARMS Data

1. ARMS financial data

All versions of the Phase III survey provide data used in constructing farm-level financial 

accounts--income statements and balance sheets--and those farm-level measures are 

used to construct aggregated financial accounts for regions, states, and the entire 

agricultural sector. The financial and production measures from the surveys are used for 

a range of research analyses.

Ongoing uses of the data:

Farm income and balance sheet accounts. ARMS data form an essential element in 

ERS’ annual estimates and forecasts of net farm income, farm sector value added, and

farm assets and debt. In turn, the estimates and forecasts are widely used by 
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policymakers, lenders, and input providers to track the financial performance and outlook 

for agriculture.

ARMS data are used directly by leaders of the House and Senate Ag committees, and 

their staffs, through the ERS ARMS on-line data tool at http://www.ers.usda.gov/dataproducts/arms-farm-financial-and-crop-production-practices/tailored-reports-farmstructure-and-finance.aspx. The tool provides data on farm income and farm balance 

sheet accounts, sorted by region, commodity orientation and farm size class. Information 

on farm structure and farm production practices is also available. They use the data tool 

as they plan and debate farm policy, in the Farm Bill and in other contexts. USDA 

officials also use the tool as they implement legislation passed by Congress.

ERS estimates of farm sector assets, debt and net worth are widely used by lenders, 

input providers, and policymakers to evaluate credit and lending conditions in the farm 

sector. When faced with poor information and uncertainty, lenders can become reluctant 

to provide financing except under the most favorable circumstances. Data drawn from 

ARMS surveys, made widely available in summary form to a wide range of users, 

provide one of the few sources of reliable, representative, and sector-wide sources of 

information on farm financial conditions.

Personal Income. ARMS data are used by the Commerce Department’s Bureau of 

Economic Analysis (BEA) in the development of State and Local Area Personal Income 

estimates. In turn, the Personal Income estimates are used in formulas for allocating 

federal funds across States. Examples of programs that use personal income data in 

formulas to allocate Federal funds across states include Medicaid, Supplemental 

Security Income, Agricultural Extension, University Research, and Agricultural Lending.

U.S. agricultural productivity accounts. ERS uses ARMS data in the construction of 

USDA’s official annual sector-wide estimates of agricultural output, input, and 

productivity growth. The estimates are used by policymakers, commodity groups, 

academics, and media to understand the sources of growth in US agriculture, to 

evaluate the impacts of investments in research, infrastructure, and extension on 

agricultural output and productivity, and to project the links between agricultural 

productivity, commodity prices, and food prices. 

http://www.ers.usda.gov/data-products/agricultural-productivity-in-the-us.aspx. 

Recent Research Uses of ARMS financial and structural data:

Debt use by farm businesses. Today, the farm sector overall is in a strong financial 

position after several years of generally rising income. However, the potential for lower 

income and higher interest rates in the future has raised concerns about current trends 

in the use of debt by farm businesses. ERS used ARMS data to analyze how farm 

businesses used debt over the last two decades, with a focus on the considerable 

variety in their debt obligations. The share of highly leveraged farm businesses (those 

with a debt-to-asset ratio greater than 0.40) has declined over time, as has the share of 

the value of production contributed by highly leveraged farms. 

Although stable overall, U.S. farm debt use varied widely by farm size, specialization, 

operator age, and other farm characteristics. http://www.ers.usda.gov/publications/eibeconomic-information-bulletin/eib122.aspx
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Tax reform: likely impacts on farm businesses. Proposals calling for fundamental tax 

reform have once again called attention to a tax system that many regard as overly 

complex, inefficient, and inequitable. The primary elements of proposed reforms include 

the elimination of tax preferences, a restructuring of capital gains and dividend tax rates, 

lowered tax rates on ordinary income, and a reduction in the number of tax brackets. 

Such changes could have a significant impact on the after-tax income of both farm 

businesses and rural households, since the current tax system contains features that 

provide substantial benefits to farm businesses in the form of reduced rates on capital 

gains, accelerated cost recovery provisions, and other special deductions for farm 

production activities. This report uses ARMS farm financial data to support detailed 

analyses of the potential impact of tax reform proposals on farm businesses and rural 

households in the United States. http://www.ers.usda.gov/publications/eib-economicinformation-bulletin/eib107.aspx

Is there duplication among farm programs? In the summer of 2013, the U.S. 

Government Accountability Office (GAO) undertook a project investigating the potential 

for overlap and duplication among USDA's farm programs. ERS staff used 2008-2011 

ARMS data to provide custom analyses based on farm size, farm production type, and 

major program category – direct payments, program payments related to low commodity 

prices, major conservation programs, and other agricultural programs such as disaster 

relief. Publicly released in 2014, the report found that: about one-third of all farms 

received payments from at least one farm program; large farmers were more likely than 

small farms to receive payments from multiple farm programs; and, although financial 

assistance provided to farmers under the 60 USDA programs may have overlapped, the 

programs did not appear to be duplicative. http://www.gao.gov/products/GAO-14-428 .

Local and regional food systems. A key to understanding farmers’ participation in 

local/regional food systems is to distinguish the types of market channels through which 

farmers’ sell food commodities: directly to consumers at farmers’ markets, farm stands, 

and the like, or through ‘intermediated channels’ such as local grocers, restaurants, 

schools, and the like. ARMS has provided data on both types of channels since 2008. 

For a Report to Congress, ERS researchers combined ARMS with census of agriculture 

data to estimate the value of local food sales at $5.8-$6.6 billion. The report also covers 

several other issues related to local and regional foods, including farm business survival, 

local economic impacts, food safety standards and the Food Safety Modernization Act, 

characteristics of local foods consumers, and environmental issues.

http://www.ers.usda.gov/media/1763057/ap068.pdf

Beginning farmers and ranchers. The 2014 Farm Bill (the Agricultural Act of 2014) 

provided increased funding for beginning farmer development, facilitates the transfer of 

farmland to the next generation of farmers, and improves outreach and communication 

to military veterans about farming and ranching opportunities. This report uses ARMS 

data to provide basic economic and demographic information on beginning farmers and 

ranchers, and ties that information to these recent policy initiatives. 

http://www.ers.usda.gov/amber-waves/2014-june/beginning-farmers-and-ranchers-andthe-agricultural-act-of-2014.aspx

Farmland leasing and debt: According to ARMS data, farmers own about 59 percent of 

the farmland acres they operate, while they lease 35 percent with cash payments and 6 

percent on a cash-crop-share basis. Large commercial farms are the largest users of 
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leasing compared to intermediate and small farms. Larger farms may use land leasing to 

take advantage of scale economies while smaller farms may use leasing as a substitute 

for debt (especially beginning farms) due to the high cost of land and other capital 

inputs. This work looks at the degree of substitution between debt and leasing for 

different farm typologies. Leasing was a close substitute (a dollar of leasing replaces 

about a dollar of debt) for large and medium sized farms. For beginning farms, a dollar of 

leasing was found to replace less than a dollar of debt. The finding suggests that leased 

assets may be more risky for these farms and may expose the lessee to additional 

liquidity and bankruptcy costs. 

http://ageconsearch.umn.edu/bitstream/170495/2/Final%20Poster%20draft.pdf

Research on farm households

Farmers and non-farm business ventures. ARMS farm-level data show that almost a 

third of U.S. farm households generate income by engaging in business ventures 

independent of farming, with distinctly different community and household benefits. Onfarm diversification activities--like agritourism--and off-farm business ventures (such as 

an equipment dealership) each accounted for about half of these activities, but off-farm 

businesses generated about 80 percent of all alternative (nonfarm) business income 

earned by farm households, creating the largest impact on the local economy. Off-farm 

businesses operated by farm households contributed an estimated $55 billion in valueadded income to the gross regional products of their local economies and paid out $25 

billion in wages and salaries to 853,100 part-time and full-time employees. In general, 

the share of the local employment base accounted for by farmer-owned off-farm 

businesses was higher in more rural counties. http://www.ers.usda.gov/publications/eibeconomic-information-bulletin/eib101.aspx

Off-farm employment: Most farm households earn income from nonfarm sources, and 

most nonfarm income comes from off-farm jobs (rather than from pensions or financial 

investments). Moreover, income growth among farm families, from nonfarm sources, has 

grown more rapidly than income growth among all US families. ERS used ARMS data to 

evaluate off-farm employment among farm families. Farm operators and their spouses 

were more likely than other workers to have managerial and professional off-farm 

occupations. This pattern is particularly true among those with a college education. 

Those occupations paid relatively high wages, which helps account for the relatively 

strong growth in farm families’ off-farm incomes. 

http://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib117.aspx 

Farm families’ health insurance coverage: ARMS collected information on health 

insurance coverage among farm operator households from 2006 through 2011, along 

with other data on farm and farm family attributes. Since most health insurance is 

employer-provided, and since most farmers are self-employed, there have been 

concerns that many farmers would be without health insurance. The resulting study 

established that farm-operator households are just as likely to have health insurance 

coverage as other Americans. Off-farm work plays an important role in coverage, by 

increasing access to health insurance through coverage provided directly by employers, 

and by providing farm households with an alternative source of income for purchasing 

insurance directly. (http://naldc.nal.usda.gov/download/55962/PDF).

Farm businesses and the internet: Over two-thirds of American farm businesses now 

access the Internet to purchase agricultural inputs, market their products, obtain market 

and other information, apply for loans and grants, and conduct other business. ERS 
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research uses ARMS data on farm Internet use to evaluate the economic impact of 

Internet infrastructure, the use and availability of technology alternatives, and Internet 

use policy issues. The studies provide scientific information in the formulation and 

implementation of policy impacting the provision of infrastructure and technology as well 

as impacting digital economy market efficiency. The research also supports USDA’s 

management of its rural loan and grant, distance education, and telemedicine programs 

for broadband Internet service providers programs. The research is on-going, and the 

latest ERS publication can be found at: http://www.ers.usda.gov/publications/ebeconomic-brief/eb23.aspx#.UieK6j_pyCg.

2. Conservation Programs and Practices

The Phase II and Phase III surveys include questions on on-farm conservation practices 

and conservation program participation. ERS uses these data to help inform the design 

of conservation programs and to produce economic research on the effects of programs 

and practices.

Recent conservation research

Additionality in conservation programs. The Federal Government spends more than 

$6 billion a year on voluntary conservation programs to encourage the adoption of a 

wide range of conservation practices that address multiple environmental and resource 

conservation goals. However, payments lead to improved environmental quality only if 

the farmers and ranchers who receive them adopt practices that they would not have 

adopted without the payment. This research uses ARMS data to measure 

“additionality”—the extent to which payments cause adoption of practices--for a set of 

common conservation practices. It also examines to target payments so as to increase 

additionality. http://www.ers.usda.gov/publications/err-economic-researchreport/err170.aspx

Managing nitrogen use. Nitrogen is a critical input in agriculture, enabling farmers to 

produce high yields profitably. However, nitrogen compounds released into the 

environment are a source of many environmental problems, including eutrophication and 

hypoxia in aquatic ecosystems, visibility-impairing haze, and the loss of biodiversity. 

ERS used Phase II ARMS data to assess nitrogen management on eight major field 

crops. The study focused on the adoption of three “best management practices” 

(BMPs), applying nitrogen at an appropriate rate, accounting for all other sources of 

nitrogen; application as close to the time that the crop needs it as practical; and using 

methods to incorporate nutrients into the soil, to reduce runoff and atmospheric losses. 

While all three BMPs were realized on over a third of planted acres, substantial amounts 

of production fell short, leading to excessive nitrogen expenses and to environmental 

damages. The study estimated the extent to which improvements in management are 

needed, and assessed alternative policy mechanisms for improving management 

(http://www.ers.usda.gov/publications/err-economic-research-report/err127.aspx)

Environmental compliance with farm programs: Farmers who receive direct 

commodity program payments are required to comply with provisions of the programs 

aimed at land and wetland conservation, known collectively as environmental 

compliance requirements. Some farm bill proposals called for sharp reductions in direct

payments; with no other changes to current law, reductions in direct payments would 

also reduce compliance incentives and potentially worsen environmental quality. This 

analysis used ARMS and other data sources to assess the impact of prosed reductions 
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on compliance incentives, and to evaluate alternative policy initiatives that would 

improve conservation incentives. www.ers.usda.gov/media/361085/eib94_2_.pdf 

Integrating conservation and commodity payments: The Conservation Stewardship 

Program, enacted as part of the 2008 Farm Act, provides performance-based 

conservation payments. These payments offset the cost of adopting new conservation 

practices and provide support to producers who have already achieved a high level of 

environmental performance. The program was introduced after the release of an ERS 

report that used an ARMS-based model to evaluate the design options for such a 

program. The model provided insight on (1) trade-offs between environmental gain and 

income support in a performance-based conservation program and (2) the distribution of 

support across farms compared to the support provided by existing commodity 

programs. http://www.ers.usda.gov/publications/err-economic-researchreport/err44.aspx

Current conservation research with ARMS data

Evaluating grassland conversion. Grasslands, particularly native grasslands in the 

Northern Plains, are important breeding habitat for ducks and other migratory waterfowl.

About half of all ducks in North America are born in the Prairie Pothole Region—an area 

of vast grasslands interspersed with small wetlands. In recent years, higher prices for 

crop commodities may be encouraging farmers to expand crop production onto these 

grasslands, destroying the habitat. Data gleaned from these questions will help in 

understanding the magnitude of these conversions and can be used to help devise 

programs to preserve grasslands. In the Western Corn Belt and Northern Plains, for 

example, the Fish and Wildlife Service (FWS) and USDA often purchase easements 

against cropland conversion on grassland that is also valuable wildlife habitat. These 

easements are purchased only from willing sellers and allow producers to continue 

grazing without restriction. http://www.ers.usda.gov/publications/err-economic-researchreport/err120.aspx#.VA7nqBZ0mJs

Use of tillage practices. Conservation tillage practices, including no-till, can have 

significant impacts on producer costs, crop yields (particularly in dry years), and soil 

erosion. Some researchers have suggested that farmers are more likely to use 

conservation tillage or no-till in years following drought years. The 2013 tillage data from 

ARMS will be used in conjunction with the 2012 data collected earlier to evaluate 

farmers’ short run tillage responses to the 2012 drought.

3. Research Focused on Livestock

ARMS Phase III livestock versions (dairy in 2000, 2005, 2010, and 2016, broilers in 2006 

and 2011, hogs in 1998, 2004, 2009, and 2015) provide detailed enterprise level 

changes that support reporting and analysis on policies and economic developments 

related to livestock production.

Recently published research

The transformation of the U.S. hog sector. Hog production was dramatically 

transformed in the 1990’s and 2000’s, as production shifted to larger and more 

specialized farms that were integrated into a chain of production with the use of 

production and marketing contracts. The transformation also featured the rapid 

expansion of new production practices in the industry. ERS research used ARMS hog 

versions for 2009, 2004, 1998, and 1992 to show how the industry’s structure shifted, 
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and to estimate the impacts of the shifts on resource use, productivity, industry 

production costs, livestock and pork prices, and the industry’s environmental 

performance. This 2013 ERS report confirms that the productivity gains from expanded 

scale and the use of new technologies were largely exhausted by 2009, and that any 

future gains would require new innovations. Absent new innovations, future pork cost 

and price movements will be driven by changes in input prices and consumer demand, 

with much less of a role for productivity growth. http://www.ers.usda.gov/publications/erreconomic-research-report/err158.aspx

Organization, costs, and risks in broiler production. U.S. production of broilers grew 

rapidly until the mid-1990s, but growth then began to slow and production declined in 

2009, with very modest growth since then. The industry’s distinctive organization—with a 

high degree of vertical integration, nearly complete reliance on contract growers to raise 

chickens for poultry companies, and grower compensation based on relative 

performance—helped fuel growth in the early period, and growth provided good returns 

and low risks for growers. However, slowing growth has placed new financial pressures 

on the industry and its organization. The industry is the subject of several important 

policy debates relating to competition, environmental regulation, international trade, and 

public health, which require an understanding of its organization. ERS used ARMS data 

to delineate the key features of the industry’s organization and to analyze the industry’s 

recent financial and productive performance, with a focus on contract growers. 

http://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib126.aspx

Hog production and manure management: The consolidation of hog production has 

also concentrated hog manure in smaller areas. Higher concentrations can magnify the 

environmental risks from manure storage and application, and hog production is subject 

to increasing Federal and State environmental regulation. ERS used ARMS hog 

versions to evaluate changes in manure management practices, and found that hog farm 

operators altered their practices between 1998 and 2009 to manage manure in a more 

environmentally sound manner. By 2009, large-scale hog producers had reduced the 

intensity of manure application by applying manure over more cropland on the farm and 

by removing more manure offsite to other cropland. They had also increased their use of 

feed additives to reduce the phosphorus content of manure, increased nutrient testing, 

shifted to greater reliance on pits/tanks and less on lagoons for manure storage, and 

increased incorporation of manure into soil to prevent run-off. 

http://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib81.aspx

Current research

Animal antibiotics, food safety, and animal health: U.S. livestock producers have 

provided antibiotics in animal feed to treat animal diseases, prevent the spread of 

disease, and enhance feed conversion. But widespread antibiotic use—in and outside of 

agriculture--can lead to increased human health risks if it encourages the spread of 

microbes that are resistant to antibiotic treatment. As a result, the US Food and Drug 

Administration proposes to phase out the use of antibiotic drugs for growth promotion, 

and major food retailers are changing procurement practices and requiring suppliers to 

limit the use of antibiotics in livestock production. Current ERS research uses ARMS 

data to estimate the extent of antibiotic use in livestock production, measure the impacts 

of growth promoting antibiotics on production and farm-level costs, identify the 

production practices and equipment used by farms that are not using growth-promoting 

antibiotics, and evaluate the likely impacts of restrictions on livestock and meat markets.
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Climate change, heat stress, and dairy production: In the United States, climate 

change is likely to increase average daily temperatures and the frequency of heat 

waves, which can reduce meat and milk production in animals. Methods that livestock 

producers use to mitigate thermal stress—including modifications to animal 

management or housing—raise production costs and capital expenditures. Dairy cows 

are particularly sensitive to heat stress, and the dairy sector has been estimated to bear 

over half of the costs of current heat stress to the livestock industry. We couple ARMSbased cost and production data to finely scaled climate data to estimate how the local 

thermal environment affects U.S. dairies’ effectiveness at producing outputs with a given 

level of inputs. We the use this information to estimate the potential effects of increased 

heat stress on milk production. For four climate model scenarios, the results indicate 

modest heat stress-related production declines over the next 20 years, with the largest 

declines occurring in the South. 

Risks, structural change, and policy in dairy. Congress initiated a major change in 

dairy policy in the 2014 Farm Bill, by introducing a new margin protection program in 

place of the combination of three programs aimed at countercyclical payments, dairy 

product price supports, and dairy export incentives. The shift occurred against a 

continuing major shift of production to larger farms, and a set of changes in product and 

input markets that are leading to widening product and input price risks. The MPP aims 

to limit the impact of those price risks, without reducing the industry’s competitiveness 

and efficiency. ERS will use ARMS data to measure how structural change in dairy 

farming affects industry production costs, and to evaluate the financial risks posed to 

dairy farmers by product and input price movements. The research will form a major 

component of the evaluation of the new dairy policy. 

What’s Driving Economic and Financial Success of U.S. Cow-Calf Operations? 

Cow-calf production is widespread and economically important throughout the U.S. Most 

farms are small part-time operations and producers have a diverse set of production 

goals. The economic performance of these operations varies by region, farm size, and 

use of production and management practices. We use ARMS cow-calf survey data to 

evaluate the drivers of farm financial performances. Our model links the "levers” of 

profitability (ROE)--operating profit margin, asset turnover, and inverse solvency--across 

five production regions reflecting different cow-calf production technologies and 

management practices. We find higher ROE in the Northeast and West, on larger farms 

with more harvested acres, on diversified farms, on farms where operators and spouses 

work off farm, and on farms that adopt feed technologies and advanced farm 

management and breeding practices.

4. Crop Production Practices and Costs. 

Data drawn from Phase II of the survey provides data on production practices for 

specific targeted crop commodities. Farms in Phase II are surveyed again in Phase III 

for information on whole-farm production and finances and farm household attributes. 

Uses of the data include:

Production practices. The 2013 ARMS production practices data for peanuts and rice 

will be summarized and published on the ERS website for public use. Data users can 

generate customized summaries using this innovative web data tool. These data 

underlie federally mandated estimates of chemical use on major field crops, and also 

provide a perspective on trends in the use of seeds, precision agriculture adoption, and 

conservation tillage. The tool for accessing the ARMS production practice data can be 
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found at: http://www.ers.usda.gov/data-products/arms-farm-financial-and-cropproduction-practices.aspx

Crop insurance indemnities: USDA’s Risk Management Agency (RMA) uses crop 

planting costs summarized from ARMS COP data to evaluate prevented planting and 

replanting payment rates (percent of total insurance coverage) that crop insurance 

policies would pay.

Fertilizer demand: Fertilizer providers use estimates of application rates, derived from 

ARMS crop surveys, to help gauge fertilizer demand in different regions, and to plan 

production and delivery schedules.

Economic damages: USDA’s Office of Civil Rights uses COP costs and returns data to 

determine economic damages in cases in which discrimination has been found in USDA 

programs. The primary example is in Farm Service Agency (FSA) civil rights complaints 

(when people are denied loans or other benefits or there has been a delay in processing 

loans or other benefits to the point that there was an adverse impact upon their farming 

operations). We must rely on publically available, defensible data as the basis for our 

analyses.

Recent ERS research on crops:

Multi-cropping practices. Over the last decade, growing demand for agricultural 

commodities has provided incentives for farmers to increase production. One way to 

increase production is to expand cropland acres; an earlier ERS study found that about 

one third of the recent expansion in corn acreage has come from hay production, 

grazing land uses, or Conservation Reserve Program (CRP) enrollment. Those shifts are 

not without environmental costs, since land in hay, grazing, or CRP provides important 

wildlife habitat as well as soil conservation and carbon reduction benefits. Doublecropping—the harvest of two crops from the same field in a given year—is another way 

to expand production. Researchers using ARMS data found that double cropping 

occurred on about 2 percent of cropland in most years between 1999 and 2012. 

Soybeans were the most common crop found on double-cropped acres, and winter 

wheat most commonly preceded these soybean plantings. However, regional and 

temporal variation is apparent in all double-cropping trends, reflecting local conditions 

and changing market incentives. Double cropping can limit the environmental 

consequences associated with cropland expansion, but it may have some negative 

environmental effects of its own. (http://www.ers.usda.gov/publications/eib-economicinformation-bulletin/eib125.aspx

Farm size and the organization of U.S. crop farming. Crop production has shifted to 

much larger farms over time. The increases have occurred steadily over the last three 

decades, and have occurred in almost all states and crops. Despite the shifts to much 

larger farms, most crop production is still carried out on family farms, in contrast to 

developments in some other countries. This report documents the shifts to larger 

operations, and evaluates the separate roles played by technology, land attributes, riskmanagement strategies, and public policies in driving shifts to larger farms. The report 

also delineates the strengths of family organizations in agriculture, and identifies the 

factors that could undermine those strengths. www.ers.usda.gov/publications/erreconomic-research-report/err152.aspx
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Genetically engineered crops in the United States. This 2014 report found that, 15 

years after their first successful commercial introduction in the United States, genetically 

engineered (GE) seeds are now used on over 90 percent of U.S. corn, soybean, and 

cotton acres. ERS researchers used ARMS data to show that planting insect-resistant 

(Bt) corn and cotton is associated with higher net returns when pest pressures are high. 

The effect of herbicide tolerant (HT) adoption on net cash returns is more mixed; 

however, HT adoption is associated with substantial reductions in farm labor hours per 

acre, thus allowing farmers to raise household incomes through off-farm work or 

expanded farming operations. HT adoption is also associated with reduced tillage, which 

provides environmental benefits and further reduces labor requirements. Since the 

introduction of GE seeds, farmers have substantially reduced their use of insecticides on 

corn and cotton, and they have substituted glyphosate for more toxic and persistent 

herbicides. However, overreliance on glyphosate and a reduction in the diversity of weed 

management practices have contributed to the evolution of glyphosate resistance in 

some weed species. http://www.ers.usda.gov/publications/err-economic-researchreport/err162.aspx

Current ERS research on crops

Strategies to manage pesticide resistance in weeds: Glyphosate (Roundup) is an 

effective and widely-adopted weed-killing herbicide, but there is now widespread 

evidence of growing resistance to the chemical. ARMS data documents the spread of 

glyphosate use in soybeans, and the extent of resistance, in this NASS report with 

ARMS data: 

http://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Ag_Resource_Manageme

nt/ARMS_Soybeans_Factsheet/. Pesticide-resistant weeds can raise farm costs and 

reduce crop yields. Scientists, extension specialists, crop producers, firms in the crop 

protection industry, and the USDA are conducting education campaigns, voluntary weed 

management initiatives, conservation activity plans, and herbicide rebate programs to 

promote the adoption of weed best management practices (BMPs). A 2015 ERS report 

used ARMS information to examine the extent of resistance, the impacts of resistance 

on the returns to crop production, the extent of the adoption of BMPs, the impacts of 

BMPs on production costs and returns, and the potential impacts of education 

campaigns and government and industry programs on the adoption of BMPs. 

http://www.ers.usda.gov/media/1832877/err184.pdf ARMS data on practices, yields, 

and costs are used more broadly to plan strategies for pest management. 

Adoption of genetically engineered alfalfa, canola, sugar beets. Annual USDA 

surveys track acreage planted to genetically engineered (GE) corn, cotton, and 

soybeans with traits for herbicide tolerance and insect resistance. But those surveys do 

not track planted acreage for other crops or traits. The 2013 ARMS Phase III gathered 

data on the use of GE seeds and traits for alfalfa, canola, and sugar beets, and ERS will 

publish estimates of GE adoption for those crops. 

Precision agriculture in crop production. Increasing numbers of producers are using 

information technology to fine-tune their production practices, decrease input costs, and 

increase yields. Farmers are organizing detailed within-field information on yields, soil 

characteristics, fertilizer and pesticide applications, and weather conditions using 

computer mapping programs. A global positioning system (GPS), the same technology 

that makes mobile road maps for vehicles, makes it possible to create these detailed 

maps as well as tractor guidance auto-steer systems. The maps can be used to 

regulate farm implement input applications using variable rate input-application 
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technologies (VRT). When first developed, VRT was envisioned as the most productive 

use of farm information technologies, but maps of field conditions have proven to be 

useful themselves in helping farmers manage field operations. Current ERS research 

uses ARMS data to evaluate these trends and their impact on farm financial 

performance, and provided information reported in the July 2014 issue of National 

Geographic Magazine. A video discussing the developments can found under the box 

“Precision in the Fields” (June 15, 2014) on the website.

http://www.nationalgeographic.com/foodbynumbers/#.U_NekqMZlV4

Identity-preserved crop production: Consumer markets for non-GE (genetically 

engineered) corn and soybeans began emerging in the U.S. and elsewhere in late 

1990s. Crops marketed as non-GE must use specific identity-preservation protocols, 

such as the use of practices to prevent co-mingling with other crops during production 

and handling. Farmers receive a price premium for non-GE crop production to cover the 

additional expenses associated with these crops. In addition to segregation costs to 

prevent co-mingling, grain buyers may require use of lower-yielding food varieties and 

may set higher quality standards for these crops. Buyers may also reject non-GE crops 

if they test higher than the buyer-set tolerance level for the presence of GE material. 

Data collected in the 2013 ARMS is being used to estimate the extent of non-GE 

production for identity-preserved markets, and the impacts on production costs and 

returns. The estimates will be used to help evaluate the prospects for coexistence of 

nearby GE and non-GE crop production in the U.S. 

5. ERS Cost of Production (COP) Estimates

ERS produces estimates of the commodity costs of production for hogs, milk, and cowcalf production, as well as for barley, corn, cotton, oats, peanuts, rice, sorghum, 

soybeans, and wheat. Baseline estimates are derived from data collected in Phase II 

and Phase III COP questionnaires directed to producers of target commodities in any 

given year. Baseline estimates are then combined with annual price, production, and 

acreage data to set cost and return estimates for later, non-baseline, years. Periodic 

new baselines are needed because changes in farm structure and technology can occur 

and change economic fundamentals. Peanut and producers were targeted for baseline 

revisions the 2013 ARMS, while cotton, oats, and hog producers were targeted in 2013. 

Commodity costs and returns data can be accessed at: http://www.ers.usda.gov/dataproducts/commodity-costs-and-returns.aspx

Recent COP research

Wheat costs of production. Wheat, produced in nearly every part of the United States, 

is the third largest U.S. crop in terms of both value and acreage, behind corn and 

soybeans. The wide variation of wheat production costs across the country reflected 

differences in yields, cropping practices, and costs of land, labor, and capital assets. 

Regional climatic differences across the United States accounted for much of the 

variation in the class of wheat grown, each with its own production practices and 

associated costs. Northern wheat producers, for example, chose spring wheat varieties 

that were harvested in the fall because winter wheat—planted in the fall for summer 

harvest—would be killed by the cold during its winter dormancy. Growers in areas with 

abundant rainfall were able to boost their yield potential by applying high rates of 

fertilizer. At the other extreme, some regions had areas so dry that costly irrigation was 

needed to produce a wheat crop.

http://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib116.aspx
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Production costs and rice sector consolidation: U.S. rice production has shifted from 

the Gulf Coast to the Mississippi River Delta and to non-Delta regions of Arkansas, and 

production has also shifted to much bigger farms as the total number of producers fell 

sharply. Changes in Federal policy, initiated in the 1996 Farm Bill, likely encouraged the 

geographic shift in production. Cost plays an important role; ARMS cost of production 

estimates for 2009 show Gulf Coast production costs to be nearly 20 percent higher, 

with substantially higher costs for fertilizer, fuel, drying, and land. In turn, the smallest 

farms, with less than 250 acres planted to rice, realize production costs that exceed the 

largest farms by about 20 percent (on a per acre basis). California is also an important 

center of rice production, but they produce a different variety that incurs higher costs but 

yields higher returns. http://www.ers.usda.gov/publications/rcs-rice-outlook/rcs11d01.aspx

1.4.3 Non-Financial Data in ARMS Phase III

This survey also collects a considerable amount of nonfinancial data. Some, such as 

hours worked on the farm, or types of equipment of livestock housing, or quantities of 

feed delivered to livestock, are used to develop estimates of the costs of farm 

production—that is, they are used to develop complete cost information.

But the survey in some years also asks about production practices used on the farm, 

including manure management and animal breeding practices on livestock enterprises, 

marketing practices on crop enterprises, or Internet usage and procurement practices for 

the whole farm. These questions are driven by particular public policy issues, and their 

inclusion in ARMS allows us to link responses to farm financial data. As a result, we can 

link the usage of practices to the types of farms that use them and to the financial 

performance of farms.

The survey asks questions about the farm’s ownership, organization, and legal status. 

Some of those questions are necessary to allow us to accurately track flows of farm 

income to stakeholders—such as farm operators, contractors, landlords, and equity

holders—and thereby provide better estimates of farm financial performance. But the 

questions also enable us to track the changing nature of agriculture, as production 

continues to shift to larger and more complex enterprises. 

ARMS Phase III contains questions pertaining to farm households—concerning not only 

their demographics, but also their off-farm income, health insurance, and consumption 

expenditures. These questions are included to meet increasing policy concerns related 

to the financial well-being of farm households, as well as issues related to access to 

health insurance in rural areas. They also enable ERS to assess the financial resources 

available to farm households and farm operations to meet often sudden and sharp 

changes in farm financial performance.
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2 Terms and Definitions

2.1 General

Enumerators working on this survey should be familiar with the definitions of the terms 

listed below. To gain the most benefit from training, enumerators should review the 

definitions of these terms before attending the regional training workshop. A 

comprehensive list of Terms and Definitions used in all NASS surveys can be found on 

the Internet under the following address:

http://www.nasda.org/File.aspx?id=2467

2.2 Economic and Cost of Production Terminology

 accounting, accrual

 accounting, cash

 acreage base

 acreage, eligible contract

 acreage, contract

 acreage, noncontract

 agricultural commodity

 agricultural production

 animal unit (AU)

 animal unit month (AUM)

 aquaculture

 area sample

 assessed value

 assessments

 assets

 auction pool

 balance sheet

 barrel (bbl)

 base acreage

 BLM

 borrowing capacity 

 call back

 carryover

 cash receipts

 cattle on shares

 check-off

 commission charges

 commodity 

 commodity, contract

 Commodity Credit Corporation (CCC)

 confidentiality

 Conservation Reserve Program (CRP)

 conserving use

 contract

 contract, delayed pricing

 contract, forward

 contract, marketing

 contract, production

 contract sale

 contractee

 contractor

 Cooperative State Research, 

Education, and Extension Service 

(CSREES) 

 Corporation

 cost of production

 cover crop

 cropland

 crop rotation

 cull

 date, due

 date, mailing

 date, reference

 date, release

 depreciation

 direct sales

 discount

 double crop 

 drip irrigation
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 editing

 EIN

 Environmental Quality 

Incentives Program (EQIP)

 equity

 estate

 expenditure

 expenses, capital

 expenses, operating

 expenses, production

 fallow

 farm

 farm, contract

 farm, corporate

 farm, institutional 

 farm, noncontract

 farmstead 

 Farm Service Agency (FSA)

 Federal Agriculture 

Improvement and Reform 

(FAIR) Act 

 feeder

 fertilizer

 field

 financial health

 finish 

 flat

 flexibility contract, 7-year 

production flexibility contract

 forage

 forward pricing 

 free-of-charge

 fringe benefits

 futures market

 government program land

 grazing land association, public 

or industrial (PIGA) 

 grazing allotment

 grazing association

 grazing fee

 greenhouse

 gross value

 harvested acres

 hay

 hedging

 herbicide

 hired manager

 household

 hundredweight (cwt)

 idle land

 implement

 improvements

 inaccessible

 income, gross farm

 income, net cash farm

 income, net farm

 income, non-farm

 income, off-farm

 input

 input provider 

 landlord

 landlord, non-operator

 landlord, operator

 liability

 liquidity 

 loan, marketing

 loan, marketing assistance

 loan, nonrecourse

 market value

 military time

 Natural Resources Conservation 

Service (NRCS) 

 net worth

 nonresponse

 nursery

 oilseed crops

 on feed

 operating arrangement

 individual

 managed

 partnership

 operator

 orchard

 out-of-business

 partner

 pasture 

 patronage refund

 payment, advanced

 payment, cost-share

 payment, disaster

 payment, final
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 payment, incentive

 payment, loan deficiency

 payment, transition

 payment limitations

 payment quantity

 payment yield

 pesticide

 planting flexibility

 pick your own (U-Pick)

 power-take-off (PTO)

 premium

 primary name

 processor

 production expenses 

 production flexibility contract 

 production flexibility contract 

payment

 questionnaire

 rangelands

 ratio, debt-asset

 ratio, parity

 real estate

 refusal

 rent

 rent, cash

 rent, share

 respondent

 retired

 salary

 sample, list

 sample, list

 sample, probability

 sampling frame

 sampling unit

 secondary name

 seed

 sharecropper

 shrinkage 

 small grains

 solar energy

 sold-out

 solvency

 straw

 subsidy

 survey

 survey period

 survey, statistically defensible

 tenant

 wages

 water rights

 wetlands

 Wetland Reserve Program (WRP)

 woodland

 work, agricultural

 work, contract

 work, custom

 work, service

 worker

 yardage
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2.3 Livestock Production Categories 

The following livestock production categories are located on page 2 of the Respondent 

Booklet.

2.3.1 Hog Contractee Operations

Farrow to Wean (Code 802) – This operation oversees the breeding of sows or gilts 

and the farrowing of their litters. The contractee will feed and care for the 

pigs for about 16 to 20 days, until they reach 12 - 14 pounds. The weaned 

pigs will be moved to a nursery and/or grower operation and the sows will 

either be bred again or go to slaughter.

Farrow to Feeder (Code 805) – This operation oversees the breeding of sows or gilts 

and the farrowing of their litters. The contractee will keep the pigs for 

approximately 6 weeks, until they reach 35 - 45 pounds. The pigs will be 

moved to a finishing operation and the sows will either be bred again or go to 

slaughter.

Farrow to Finish (Code 807) – This operation oversees the breeding of sows or gilts 

and the farrowing of their litters. The contractee will keep the pigs and finish 

them out until they reach market weight. The sows will either be bred again 

or go to slaughter.

Nursery (Code 806) – This operation only handles young pigs. Pigs from 12 - 14 

pounds are received, fed, and cared for until they reach 35 - 45 pounds. 

They are then transferred to a finishing operation.

Nursery/Finish (Early Wean, ISO Wean, SEW Pigs) (Code 808) – This operation 

receives pigs around 12 - 14 pounds and finishes them until they reach 

market weight. ISO Wean stands for “Isolation Weaning”. SEW Pigs stands 

for “Segregated and Early Weaning”.

Finisher (Feeder to Finish) (Code 809) – This type of operation will receive pigs that 

average about 35 - 45 pounds and finishes them out until market weight.

Other Hogs and Pigs (Code 804) – This category includes a range of different types of 

operations. An example is an operation that receives gilts or boars only and 

feeds them until ready for breeding.

2.3.2 Chicken Contractee Operations

Broiler Growout (Code 916) – A written contract with contractees to raise meat-type 

strain chickens from newly hatched chicks to processing weight. It is a 

common practice to raise female or male flocks separately (see code 939 

below). Includes Cornish and roasters.

Pullets for Hatchery Supply Flock Replacement (Code 926) – Pullets are raised from

newly hatched chicks to about 15 to 22 weeks for layer flock replacement. 
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Almost all pullets for BROILER hatchery supply flock replacement are raised 

on production contracts.

Pullets for Table Egg Flock Replacement (Code 925) – Pullets are raised from newly 

hatched chicks to about 14 to 20 weeks for table egg flock replacement. 

Under a production contract, the hatchery or egg producer retains ownership 

of the birds.

Fertile Hatching Eggs (Code 921) – Producer cares for layers and gathers eggs which 

go to a hatchery. Virtually all BROILER - type hatching eggs are raised by a 

production contract. Some respondents say they have a ‘broiler’ contract 

because they are paid by a broiler company. Be careful not to confuse an 

egg producer with a broiler growout contractee. Most EGG - type hatching 

eggs are produced by production contract, with the hatchery retaining 

ownership of the birds.

Table Eggs (Code 920) – Producer cares for layers and gathers unfertile eggs which go 

to a processor or an egg breaker. To be considered a production contract the 

egg processor or egg breaker would own the birds. Sometimes partners, 

such as feed mills, are involved, and all partners claim ownership of the birds.

Broilers, Chicks, Hatchery Run (Code 935) – Broiler chicks less than 3 days old direct 

from the hatchery. Normally, these are sold to small operations under a 

marketing contract (NOT a production contract). Exclude integrated 

contractor delivered birds to be raised under a production contract.

Roosters, Meat Type (Code 939) – Domestic chicken males raised from chicks to 

breeding age of approximately 25 weeks that will be used for meat. For the 

most part, these should be recorded as broilers unless they are kept for 

research purposes.

Roosters, Breeding Flock (Code 940) – Domestic chicken males raised from chicks to 

breeding age of approximately 25 weeks and will be moved to a hatchery 

flock.

2.3.3 Turkey Contractee Operations

Turkeys Growout (Meat Type) (Code 969) – This is a written contract to raise turkeys 

for meat production. The contractee will raise turkeys from poults received at 

6 weeks of age from a brooder operation (growout operation) to market 

weight. Contract fee for this work is smaller than Code 970.

Turkeys All In/All Out (Meat Type) (Code 970) – This is a written contract to raise 

turkeys for meat production. The contractee will raise turkeys from newly 

hatched poults to market weight. Contract fee for this work is larger than 

Code 969.

Turkeys (Meat Type) Brooders (Code 967) – Brooder operations grow the chicks for 

about 6 weeks. After 6 weeks, the birds are moved to another facility (code 

969) where they are grown out to market weight.
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Poults Breeding Flock (Code 938) – Poults are raised from newly hatched chicks to 

laying age for the purpose of breeding stock replacement.

Eggs, turkey hatchery (Code 919) – Producer cares for turkey layers and gathers eggs 

which are separated into either a meat type turkey flock or a breeding flock.
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3 Survey Procedures

3.1 General

This chapter provides an overview of the questionnaires and other materials. General 

guidelines for collecting data are also discussed in this chapter. Administrative matters 

are covered in the NASDA Enumerator Handbook. The handbook is available online at: 

http://www.nasda.org/File.aspx?id=2193.

3.2 Survey Materials

You will receive the following from your Regional Field Office:

 Questionnaires with labels identifying the assigned operations.

 Extra questionnaires without labels.

 Respondent Booklets containing Code tables and the survey cover letter that 

was sent to respondents.

 Supplements for questionnaires you are assigned.

 Envelopes for mailing completed questionnaires.

 Several copies of NAS-011 (Time, Mileage, and Expense Sheet) and envelopes 

for mailing them.

 Other materials may also be provided by your Regional Field Office or State 

Office.

You should have these materials on hand:

 Interviewer's Manual

 Highway and/or street maps

 Black lead pencils

 Name tag

 NASDA Identification Card

 NASDA Employee Handbook

 Ball point pen for completing NAS-011

 Calculator

 Clipboard
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3.3 Questionnaire Versions

Version Color

Costs and Returns Report (CRR) Blue

Cotton Costs and Returns Report Green

Oats Costs and Returns Report Yellow

Hogs Costs and Returns Report Brown

The Face Page of the questionnaire contains the respondent and partner labels. Prescreening of respondents was done during Phase I. Any previously reported data from 

Phase I (for List records) and June Area Survey (for NOL records) that is again asked in 

Phase III should be printed next to the question in the questionnaire. Screening is

discussed in Chapter 4 of this manual.

3.4 Respondent Booklet

The Respondent Booklet contains information respondents need to reference when 

answering some survey questions, such as Code Lists. Since all versions are mailed to 

respondents, most tables in the Respondent Booklet have been added to the 

questionnaire.

Tables remaining in the Respondent Booklet are the Crop Codes, Livestock Codes, List 

of General Business Expenses, Value Codes and Grain Conversion table. Also, the 

Cover Letter that was included in the questionnaire mailing to respondents has been 

placed on the front page of the Respondent Booklet. 

3.5 Respondent Burden

Headquarters recognizes that this survey poses a heavy burden on respondents. The 

Sample Design Section strives to minimize the burden on respondents in terms of 

multiple contacts per year and consecutive contacts from one year to the next. For the 

list sample, a special burden reduction procedure is used prior to selecting the screening 

sample to minimize most overlap with other major surveys (Crops/Stocks, Hogs, Cattle, 

Labor), as well as ARMS from the previous year. However, there are situations where 

duplication with other major surveys is unavoidable. 

You will reduce the reporting burden on the respondent if you are thoroughly familiar 

with the questionnaire and instructions. Follow “Go To” instructions carefully to avoid 

asking questions needlessly. If “Go To” instructions do not appear after an Item, 

continue with the next item.

Also be aware of the estimate of average completion time in the burden statement. This 

figure is determined by either the actual average time from previous interviews or what 

NASS and the Office of Management and Budget (OMB) think the average completion 

time will be. The OMB is an agency that is required to review and approve all surveys 

conducted by the Federal government.
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3.6 Entering Data

Use a black lead pencil to record data and make notes; never use ink on a 

questionnaire. Make all entries clear and easy to read. Entries in check boxes and Item 

Code boxes must be entirely inside the boxes.

Record responses in the unit required (such as acres, bushels or dollars). If a 

respondent gives an answer in a different unit, write the answer outside the printed box, 

convert it to the required unit, and record the converted data in the box. If the answer is 

“none”, check the “none” box. Record all zeros (unless instructions indicate to enter a 

specific Code to indicate none or zero, such as when using Value Codes).

Make sure to record data to the nearest whole number, unless a decimal point is printed 

in the box. Locate numbers correctly in relation to decimal points, and fill in every space 

printed after the decimal. Use zeros as fill when answers are not given to as many 

decimal places as required, or are given in whole numbers.

If answers appear unreasonable but are valid, make notes in the margins or on the notes 

pages to explain. Do not write notes or make unnecessary entries in answer boxes.

3.7 Planning Your Work

The operator or operation name, mailing address and identification number are on the 

questionnaire label along with any other information the Regional Field Office has that 

might be helpful.

Mark the location of each operation assigned to you on a map before you begin the 

survey. Show the location by a small circle with the ID number or target operator name 

(or operation name) written beside it. Use this map to plan your daily travel; this will help 

keep travel expenses down and save time.

You may need to ask Post Office staff or Farm Service Agency (FSA) employees for 

directions to some operations. Try to do this early in the survey so you can put the 

information on your map as soon as possible. Tell your supervisory enumerator (or the 

State Office if that is what you are instructed to do) about any operator whose home or 

office you cannot locate.

3.8 Interviewing

Interview the farm operator, if possible, because information collected from other people 

often is less accurate. However, if the operator says someone else is more 

knowledgeable, interview that person.

The ARMS Phase III is very detailed, which may require an interview to be completed in 

person. It is advisable to call or visit each respondent early in the survey period to set

up an appointment to complete the interview at his/her convenience. During this initial 

contact, explain the survey purpose and importance, the scope of the interview and that 

it will be necessary for them to have their farm records available during the actual 

interview.
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If the operator will not be available before the survey is over, try to interview someone 

who is well informed about the operation. A partner, family member or employee may 

know enough about the aspects of the farm operation covered in the questionnaire to 

give you the information needed.

The NASS rule-of-thumb is to make up to three attempts (the first visit plus two call 

backs) if necessary, to get an interview. If you have an appointment or information from 

a neighbor on when to try to reach the operator, obviously you should return then. If not, 

make each visit at a different time of the day.

Respondents often ask how long the interview will take. Never contradict the burden 

statement; however, it is okay to add to it. For example, you might say: "The official 

nationwide average for this survey is 100 minutes, but the interviews I have done in this 

area averaged about minutes." Be honest about the average time, even if your 

interviews are averaging longer than the time estimate in the burden statement. 

Put the respondent at ease about time and burden. Respondents are often not experts 

about their own finances and may not have their records in order. Because you know 

the survey questions well, you will be able to help farmers find most of the information in 

their books or records. Make sure they understand you are helping them find the 

answers, not quizzing them on their records. Your expert knowledge of this survey will 

help minimize their effort while maximizing the quality of the data collected.

Encourage respondents to have their farm records at hand. If records are used, 

accurate information will be readily available and answering will take less interviewing 

time.

Always begin by reading questions exactly as they are worded in the questionnaire. You 

may also use any optional wording or explanations printed in the questionnaire. If the 

respondent still does not understand, or asks you to explain, then use what you learned 

in training and information from this manual to explain what is needed.

Ask questions in the order they appear in the questionnaire. Do not skip any questions 

unless instructions allow you to do so. Sometimes respondents will volunteer 

information you need later in the interview. When you get to a question the respondent 

already answered, take the opportunity to verify the information. Say something like, “I 

think you told me this earlier, but let me be sure I got it right.” And then ask the question. 

This shows the respondent you were paying attention earlier and that you want to get 

things right.

Sometimes you will need to probe in order to get an adequate answer to a question. 
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You should probe when:

 the respondent cannot answer the question, 

 the answer is not exact enough to record,

 the answer may be incorrect because it does not fit with the information already 

obtained, or

 you think the respondent did not understand the question. 

The purpose of probing is to verify unusual data or to correct misreported data. Be 

careful when you phrase your probing questions that you do not influence the 

respondent’s answers. Probes should be “neutral”. That is, they should not suggest one 

answer over another. In fact, all questions should be asked in a neutral manner. Do not 

say things like, “What do I mean by marketing contracts? Oh, you must not have had 

any, did you?” Instead, say, “During the year, did this operation have any livestock 

marketing contracts for livestock raised?”

In another example, if a respondent tells you an expense is between two amounts, such 

as, “Oh, I guess the total was between two and three hundred dollars,” you should ask, 

“Would you say it was closer to $200 or $300, or what amount exactly?” Probing is 

especially important early in the interview when the respondent is ‘learning’ from you 

what level of effort and accuracy are ideal. If you fail to probe, you may be suggesting 

that good answers are not needed. 

Strike a balance between motivating the respondent to search out sound numbers and 

taxing the respondent to account for every nickel. Probes should also be “nonthreatening.” Be careful you do not appear to be questioning or challenging the 

respondent’s answers. Do not say, “That can’t be right! You just said you had 20 pigs, 

so your vet expense couldn’t have been that high!” Instead, say, “Earlier you said that 

you had 20 pigs during the year. Can you tell me why your vet expenses were so high?” 

And then make notes of the respondent’s answer.

The importance of good notes cannot be overemphasized. Notes are especially 

important when you find unusual situations or the respondent explains why information 

that seems incorrect actually is correct. Good documentation saves the Regional Field 

Office from having to re-contact the farmer to confirm the accuracy of the data. Also 

write down any complicated calculations you make to come up with an answer. These 

notes will help the survey statistician understand this operation when reviewing the 

questionnaire. Make sure the notes are clear and can be read. Never erase a note 

unless it is wrong. Notes are the single most valuable editing tool available to the 

office statistician!!

After completing each interview, be sure to review the questionnaire while the interview 

is still fresh in your mind:

 check all the answers for correctness and completeness, 

 double-check your calculations, and

 make sure your notes are legible and make sense.
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3.9 Fiscal Year versus Calendar Year

The questionnaires are designed to collect expenses and income for the calendar year. 

However, some farm businesses keep their books on a fiscal year basis, such as 

October 1 – September 30. In these cases, collect information for the operation’s fiscal 

year and make a note on the questionnaire indicating the time period of the operation’s 

fiscal year.

3.10 Non-Response

If an interview cannot be conducted, explain why on the questionnaire. Make a note 

about whether the operation appears to be a farm and any other information you think 

might be helpful to the Regional Field Office.

Most farmers are willing to cooperate on NASS surveys, but in every survey some will 

refuse to do so. The key to reducing the chances of getting refusals is to be courteous 

and friendly, but persistent. Most respondents will greet you with basic questions about 

the survey. Be prepared to answer their questions confidently and concisely. 

Respondents will want to know what the survey is about, how long it will take and why 

they should report. You should develop and practice an introduction with which you feel 

comfortable. Your introduction should explain the purpose of the survey, the need for 

accurate agricultural statistics, and the confidentiality of the data. Make use of materials 

on the survey purpose provided at your State training workshop. 

Above all, do not become discouraged when you get a refusal. Stay in touch with your 

supervisor. Continue to meet farm operators with ease, friendliness and optimism as 

you contact other respondents in the sample.

3.11 Supervision

Your supervisor will set up an appointment to meet with you early in the survey. This 

visit will help you get off to a good start by spending some time to review a few of the 

interviews you have completed. Hold all your completed work until this review takes 

place unless you are instructed to do otherwise.

Your supervisor, or someone from the Regional Field Office, will contact a few of your 

respondents to conduct a quality check. The quality check will verify that you spoke with 

the person named in the questionnaire and that the respondent understood the survey 

procedures.

3.12 Completed Questionnaires

Turn in your completed questionnaires according to the instructions you receive from the 

Regional Field Office. If you think that under these procedures the last few 

questionnaires you complete might not reach the Regional Field Office before the final 

due date, call your supervisor.
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Keep a record of when you complete each questionnaire and when you passed it on to 

your supervisor or mailed it to the Regional Field Office. This will help the office locate 

survey materials if they are delayed.
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4 Face Page and Screening

4.1 Face Page

4.1.1 Introduction

Before approaching the farm operator, develop and practice an introduction with which 

you are comfortable. In the introduction include who you are, whom you represent and 

the purpose of the survey. Become familiar with the information in Chapter 1 of this 

manual and be prepared to answer general questions about the survey.

During your introduction, be sure to remind the respondent that all the data are 

confidential and used only in making State, Regional and National estimates. In preparing 

for the interview, mention that using farm financial records (including milk checks, co-op 

statements, FSA records, etc.) are extremely helpful. These records do not have to be in 

perfect order to be useful. Make sure the respondent knows you will be conducting 

several of these interviews so you know the questionnaire very well and will help them find 

the answers in whatever records are available.

If the operator has multiple operations, only one operation is selected for this survey. For 

these situations, it is beneficial to recognize which operation has been selected so the 

operator can obtain the records for that particular operation. The label and preprinted 

screening information are helpful in this determination. It is important to keep in mind 

which operation is selected throughout the interview. Only the acreage, crops, livestock, 

income, expenses, assets, and debt for that selected operation are collected on the 

questionnaire. Assets, debt, and net cash income from the other operations are collected 

in Section N on the farm household.

Often when making the initial contact on this survey, you are only setting up an 

appointment to complete the questionnaire at a later date. If the Regional Office has 

included a Screening Supplement with a particular Questionnaire it is best to complete it 

on this first contact, because you may find out information about the operation you need 

to discuss with the office. This procedure gives you plenty of time to contact the office 

before doing the full interview. Account for the screening time in notes so interview 

beginning or ending time can be adjusted to more accurately reflect total interview time.
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4.1.2 Target Label (ALL Versions)

123456789012345678901234567890123456789

Line 1 Survey Code = AA BBBBBBBBB CCCCCC

Line 2 Barcode |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

Line 3 Barcode |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

Line 4 Barcode |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

Line 5 Barcode |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

Line 6 ID 12345678901 AA BB C DDD F EE QQ PPP

Line 7 GG HHH II JJ KKK-KKK-KKKK L MMM NNN RRR

Line 8 SSS-SSS-SSSS TTT OOOO

Line 9 Sequence Number

Line 10 Blank Line

Line 11 Operation Name

Line 12 Person Name

Line 13 Street Address

Line 14 Place Name ST 12345-6789

Line Col.(s) Field Description Prism Table.Field Name / Value

1 1-17 Survey Code =’ (BOLD) Value = `Survey Code =`

2-5 Barcode Layout Contains:

1-11 State Reporting ID (11 digits) (BOLD) Reporter.State_poid

12-13 Tract (2 digits) Reporter.Tract

14-15 Subtract (2 digits) Reporter.Subtract

16 Questionnaire Version (1 digit) Reporting_Unit.Questionnaire_version

17-19 Survey Identification Code (3 digits) Survey.Survey_code

20 Blank (1 digit)

6 1-2 ‘ID’ Value=’ID’

4-14 State Reporting ID (11 digits) (BOLD) Reporter.State_poid

16-17 A Tract (2 digits) Reporter.Tract

19-20 B Subtract (2 digits) Reporter.Subtract

22 C Questionnaire Version (1 digit) Reporting_Unit.Questionnaire_version

24-26 D Survey Identification Code (3 digits) Survey.Survey_code

27 F Blank Barcode Filler (1 digit)

28-29 E Scoring Indicator (2 digits)

34-35 Q Manager Flag Value=’MM’ based on Opdom_status

37-39 P Multiple Operation Flag Value=’ZZZ’ based on Opdom_status

7 1-2 G District Code (2 digits) Reporting_Unit.class3_code

4-6 H Op County Code (3 digits) Reporter.Op_county_id

8-9 I Op Dom Status (2 digits) Reporter.Opdom_status

11-12 J Active Status (2 digits) Reporter.Active_status

14-25 K Phone Number (10 digits)* Reporter.telephone_number

(digits 1-3)-(digits 4-6)-(digits 7-10)

28 L Comment Flag

30-32 M Supervisor Code (3 digits) Reporing_Unit.class1_code

34-36 N Enumerator Code (3 digits) Reporting_Unit.class2_code

38-40 R County Code (3 Digits) Reporter.county_id

8 14-25 S Phone Number (10 digits)* Reporter.oper_phone

(digits 1-3)-(digits 4-6)-(digits 7-10)

33-36 O Sequence Number (4 digits) Reporting_Unit.Subgroup3

27-29 T Method Code (3 digits)

9 1-12 Sequence Number Machine Sequence

10 Blank Line

11 1-30 Operation Name (30 digits) Reporter.Operation_name

12 1-30 Person Name (30 digits) Reporter.Person_name

13 1-30 Street Address (30 digits) Reporter.Addr_delivery

14 1-18 Place Name (18 digits) Reporter.Place_name

20-21 State Abbreviation (2 digits) Reporter.State_abbrev

23-32 Zipcode (9 digits) Reporter.Zip5

(digits 1-5)-Zip4(digits 6-9)
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* Phone numbers will only be printed on questionnaires sent to RFOs & it will be suppressed on Mailed 

questionnaires.

4.2 Screening Information

A screening survey (ARMS Phase I) was conducted on the sampled respondents to 

determine their operating status for the reference year. Area frame records were 

screened during the June Area Survey. The National Processing Center (NPC) will print 

any of this previously reported data in the Questionnaire, next to the appropriate 

Question. This pre-printed information on this form is used to help you make sure you 

are interviewing the correct sampled operation. 

The pre-printed information will have the following from the Phase I Survey and June Ag 

Survey:

 Who responded to the screening interview (operator, spouse, etc.)

 How was the screening interview completed (mail, phone, etc.)

 Was the screening interview completed or did it have to be estimated for

 All owned land

 All land rented to others

 All land rented from others

 Total acres operated

 Total cropland

These eight Items can be used during the interview in one or more of the following 

manners.

 You can ask the question to the respondent, and compare their answer to the 

same Item from the screening survey. If there is a discrepancy, verify that you 

have the correct answer.

 You can verify the information on the Information Form. For example, you may 

ask “I have this operation’s total land owned as 250 acres. Is this correct?”

4.3 Interview Completion Times

There are two methods to record the length of the interview: beginning and ending times 

and total time in hours. Interview times are used to determine how much respondent 

time we are using (as a measure of respondent burden) in collecting data. We are trying 

to reduce interview times as much as possible and still collect the high quality data we 

need. Accurate reporting of interview time is critical for monitoring and evaluating survey 

burden and cost.

4.3.1 Beginning & Ending Times

Record the beginning time in military time (Item Code=0004 on the front page of the 

questionnaire) of the interview when the respondent agrees to cooperate on the survey 

and you actually start the interview.
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When the interview has been completed, record the ending time in military time (Item 

Code=0005 on the back page of the questionnaire). If more than one person was 

interviewed or it took more than one appointment to complete the interview, times should 

reflect the approximate total time for the questionnaire.

Exclude the time you spend reviewing the questionnaire or verifying calculations 

by yourself after you have completed the interview. Be sure the ending time is after 

the beginning time entered on the face page.

4.3.2 Time in Hours

If multiple interviews occurred or multiple people were interviewed, the total interview 

time can be estimated, in hours, by recording the number of hours (to the tenth of an 

hour) in Item Code 0008. If Item Code 0008 is used, then do not use the beginning 

and ending times.

4.4 List Frame – Verification of Sampled Operations

Questionnaires will be pre-labeled with names and addresses. If the first line (primary 

name line) of the label after the identification number line has an individual name (JOHN 

SMITH), this is the target name, (unless the OpDom status is 99). If the first line 

contains a combination of individual names (JOHN AND BILL SMITH) or an operation 

name (SMITH FARMS), then the name on the next line (the secondary name line) is the 

target name. If the OpDom status is 99, then the operation named on the primary name 

line is the target. When OpDom=99, the operation name is the key.

Remember: The target name NEVER CHANGES. The person actually operating 

the farm (the farm operator) may change, but the selected target name is always 

the person identified on the label.

The first thing you will do is verify the operator’s (or operation’s) name and address, and 

the names and addresses of any known partners. If there are partner labels, be sure the 

partner names and addresses are correct, and all partners are listed. Mark through the 

names of any partners no longer involved in the operation. Add the names and 

addresses of any partners who are not listed.

4.5 Area Frame – Verification of Sampled Operations

All of the area frame samples selected for the survey were identified as farm operators 

during the June Agricultural Survey.

We are interested in the operation the way it existed on June 1, so ignore any changes 

that have occurred in the operation since June 1. For example, if the tract was 

individually operated in June and changed to a partnership in September, collect data for 

the individual operation for the time it existed (January through August). Do not collect 

any data for the partnership. Collect data for the operation as it existed on June 1.

We know that by using this rule we will lose some data for those few farms or ranches 

that were formed after June 1. However, there usually are not very many of these 
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operations and they are generally relatively small. Therefore, they would not have much 

impact on the overall estimates from the survey.

If you find out an error was made in June (the operating arrangement was incorrectly 

identified), make notes to explain the error, but complete the questionnaire for the 

operation as it actually existed on June 1. If you have time between your first contact 

with the respondent (when you find out the June report was wrong) and your 

appointment to complete the survey interview, call the State or Regional Field Office and 

let them look up the corrected operating arrangement. If it is overlap with the List, you 

will not have to do an interview. 

4.6 Screening Box on Face Page

If a question or problem exists with the operation description information collected during 

Phase I, the Regional Office will want you to complete the Screening Supplement. This 

may be because the screening data were collected from someone other than the 

operator on the ARMS Phase I or the information that was obtained was incomplete.

4.6.1 Completing the Screening Supplement

Farm operations in each State were sampled for the ARMS based on List Frame 

information about crop acreage, livestock inventory, and an estimated gross value of 

farm sales. Agri-business firms and agricultural services that do not have crops or 

livestock of their own should have been excluded from the sample, but it is possible 

some records were misclassified. Screening questions determine the eligibility of the 

selected name for this survey.

Institutional (Abnormal) operations such as prison farms, private or university research 

farms, not-for-profit farms, and Indian reservations are out-of-scope for ARMS and 

should be excluded from the survey. If your assignment includes any of these farms, 

notify your supervisor or the survey statistician.

If an operation was in business during any part of the reference year, but went out of 

business during the year, complete a questionnaire for the part of the reference year 

during which the operation did business. If the operation was taken over by another 

operator or operation when it went out of business, make a note of this. This note 

should include a name, address, phone number and any other pertinent information.

Item 1 – Other Operation Name

Even though you have already verified the label, you need to ask this item to detect 

duplication and make sure the list is up-to-date. Indicate if this name should appear 

on the label in the future.

Item 2 – Crops, Livestock or Poultry

Check ‘Yes’ if the operation grew any crops (field crops, fruit/nut crops, vegetables, 

oilseeds, specialty crops, hay, etc.) or had cattle, hogs, sheep, poultry or other 
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livestock during the reference year, on the total acres operated. If ‘Yes’, go to Item 

7. If ‘No’, continue with Item 3.

For an operation to qualify as growing a crop, the operator must have made the 

decisions on planting, caring for and harvesting the crop.

Include: field crops, fruit and nut crops, vegetables, mushrooms, flowers, 

nursery stock, greenhouse crops, hay, Christmas trees, etc

Exclude: home gardens and crops received as payment for land rented to 

someone else

This screening question would also be checked ‘Yes’ if the target name had any 

livestock or poultry, regardless of ownership, on the total acres operated at any time 

during the reference year. 

Include:

1) All cattle, hogs, sheep, equine, goats, chickens, turkeys, ducks, geese, 

bees, rabbits, mink or other fur bearing animals, and fish that are raised 

commercially or for home consumption. FFA and 4-H livestock projects 

should also be included.

2) Operations that own FIVE or MORE pleasure horses and no other 

agricultural items.

Exclude:

1) Operations that have FOUR or LESS pleasure horses, and/or any 

number of other animals kept ONLY for pleasure use or as pets. For an 

operation to be excluded from ARMS, no other agricultural items 

(including hay produced on the operation) may be present.

2) Horse boarding operations, riding stables, or race horse training 

operations that

a) do not have other agricultural items (i.e. has hay produced on the 

operation or breeds horses) unless they have more than 99 acres of 

pasture, or

b) that keep separate accounting books from the farming operation’s 

accounting books. If the horse boarding, riding stable, or race horse 

training operation’s income and expenses can be broken out from the 

traditional agricultural enterprises’ income and expenses, exclude the 

horse boarding, riding stable, or race horse training operation.

3) Slaughter or packing houses, auction barns, stockyards or other buyers.

These operations have livestock which are committed for slaughter. The 

presence of these livestock alone does not qualify an operation for the 

survey.

Item 3 – Sales of Ag Products or Receipt of Government Ag Payments

Include sales of crops, livestock, aquaculture and other products from the total land 

in the operation. Include any government payments received under the 7-year 

market transition program, conservation programs, etc.
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This item should be answered ‘No’ when the respondent is a landlord who sold 

agricultural products from or received government farm payments only for land which 

was rented out. 

If this item is checked ‘Yes’, go to Item 7.

Item 4 – Idle Cropland and Pastureland

Operations with more than 99 acres of pastureland or 19 acres of idle cropland and 

no other agricultural commodities qualify as point farms. It is necessary to correctly 

identify these point farms to ensure their representation in the summary.

If this item is checked ‘Yes’, go to Item 7.

If Item 2, 3 and 4 are all ‘NO’, continue with Item 5.

Item 5 – Out-of-Business Determination

This item determines if anyone else is now operating the land formerly operated by 

the target name on the Face Page. Ask this item ONLY if the respondent answered 

‘No’ to Questions 2, 3 and 4. If another operation has taken over from the target 

name on the label, record the name of the operator or operation now operating the 

land.

This item gives us information needed to update the List Frame when operations 

have gone out-of-business. Record the name, address, and phone number (if 

available) of the individual or operation now operating land that used to be operated 

by the target name

If the respondent answers ‘No’ to this item, probe to determine what happened to the 

land and make notes.

Item 6 – Enumerator Action

These instructions ONLY apply in rare cases where the selected target name is outof-business. If the answer to Items 2, 3 and 4 are all ‘No’:

 On the Screening Supplement, enter Code ‘9’ for the Reporting Unit in Item 7

(Item Code 9921).

 On the Face Page of the Questionnaire, enter Code ‘1’ in Item Code 0006, if 

not already entered.

Go to the Back Page of the Questionnaire, enter code ‘1’ in Item Code 9901 and 

complete the Respondent Code, Mode, ending time, date, and enumerator ID 

information.
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Item 7 – Decision-Maker for This Operation

We are interested in how the operation was managed on a day-to-day basis. We do 

not care what the legal definition of the operation is. Definitions of individual, 

partnership, and managed land can be found in the Ag Surveys Interviewer's 

Manual. Landlord-tenant, cash-rent and share crop arrangements should not be 

considered partnerships.

When an individual operation is reported, enter Code “1”. When a partnership is 

reported, enter the number of partners. Include the person listed on the Face Page 

and all of the other partners. If there are more than 5 total partners, consider this a 

managed operation and enter a Code “8”. When a hired manager is reported, enter 

Code “8”.

Item 8 – Other Operations

This is a screening Question to find out if the target name made day-to-day decisions 

for any other operations in the reference year. Each additional (non-managed)

operation must be listed or verified on the back side of the Screening Supplement. 

The information collected on the Screening Supplement will be used to update the

list sampling frame.

If the operator does not have other operations OR if this is an OpDom 99 

record (Item 8 is ‘No’):

If there were not any other operations OR if this is an OpDom 99 record, enter a 

“1” in Item Code box 0923, return to the Questionnaire and begin the interview.

If the operator has other operations (Item 8 is ‘Yes’):

Item 8a – Total Number of Operating Arrangements

Enter the TOTAL number of operating arrangements, INCLUDING THE 

SAMPLED OPERATION LABELED ON THE FACE PAGE OF THE 

Questionnaire in Item Code box 0923. Entering a “2” indicates the operator 

makes day-to-day decisions for two operations (the one labeled on the Face 

page of the Questionnaire and one additional operation).

Item 8b – Identifying Additional Operating Arrangements

After entering the TOTAL number of operating arrangements in Item 8a, 

complete or verify the information for the second operation. If the operator 

had a third operation, complete or verify the information on an additional 

Screening Supplement for this operation. If the operation on the Face Page 

is still in business, then you will complete the Questionnaire for the 

operation named on the Face Page of the Questionnaire.

If the Regional Office already knows about additional operations associated 

with the target name, there should be additional screening supplements for 

these operations. Verify that the target name is still involved with each of 

these operations. Also, there may be partner labels for any or all of these 
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operations. Verify the names and addresses of additional operations and 

partners associated with them. Mark out any operations the target name was 

not associated with in the reference year. If any partner names are not listed, 

add them with complete name and address information.

If the target name is involved (either as individual operator or as a partner) 

with any other operations which are not listed on a Screening Supplement, 

record these. In the partner space record the names of all of the partners (up 

to four) other than the target name associated with each of the additional 

operations.

Item 8c – Day-to-Day Decisions for Additional Operations

For each of the additional operations, check the appropriate box to explain 

how the day-to-day decisions were made in the reference year. We are 

interested in how the operation was managed on a day-to-day basis. We are 

not interested in the legal definition of the operation.

4.7 Special Situations – Managed Operations

Do not include any operation not already listed for which the target name is a hired 

manager.

A special situation exists if the operation on the Face Page of the Questionnaire is a 

managed operation. If the target name is still the hired manager, there is no problem; 

handle it as you would normally. 

If the label for the operation on the Face Page is a managed operation and was still in 

business in the reference year, under a new hired manager, you will contact the new 

hired manager and collect data for the operation named on the Face Page. You will also 

need to contact the original target name to verify the other operations listed, and if that 

originally selected target individual has any additional operations you will list them on 

one or more Screening Supplement(s).
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5 Completing the Questionnaire

5.1 Introduction – Layout

This chapter will describe, in detail, the questions in the Cost and Returns (CRR) 

version. Detailed instructions for questions related to specific commodity versions and 

specific research questions for a given reference year will be published in the appendix.

5.2 Section A – Land in Farm/Ranch

5.2.1 Section Purpose

Section A has the following primary functions: 

1) Measure the total land operated.

2) Determine the tenure arrangements and whether farmers are renting on a share, 

cash, flexible, or rent-free basis.

3) Account for rent paid and value of land rented from others.

4) Account for rent received and value of land rented to others.

Acres of owned and rented land are used to determine the total size of the farm under 

the operating arrangement identified on the label. Total acres are one measure of farm 

size used in reports and analyses. Knowledge of how much land is owned versus 

rented is the basis for studying farm tenure arrangements.

5.2.2 Acres Operated

5.2.2.1 General Instructions for Items 1–5

Items 1-4 account for acres owned, acres rented from others, and acres rented to others 

by this operation at any time during the year. Answers for these items are reported to 

the nearest whole acre.

For operations that were in business for only a part of the year, collect data for the part 

of the year when it was still in operation. If the operation went out-of-business before 

December 31, end-of-year inventory values for crops in storage or livestock should be 

zero when you ask about these later in the interview. However, you will usually find 

fairly large amounts of cash or other assets such as land contracts due from sales of 

farmland.

Exclude data for the part of the year that an operation was not in business including any 

income from renting the operation to others after this operation went out-of-business.
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Sometimes an operator has several operating arrangements, such as an individual 

operation and a partnership operation, so be sure the questionnaire contains data only 

for the arrangement identified on the label.

Include:

1) All cropland, the farmstead, government program land, idle land, orchards, 

pasture, wasteland, wetland and woodland, regardless of location, if the operator 

made the day-to-day decisions for that land under the selected operating 

arrangement.

2) Land in another state that is part of the operation (if the operator made the dayto-day decisions for that land).

3) Land worked by sharecroppers. Sharecropper operations are considered part of 

the landowner's operation. A sharecropper is a worker who furnishes ONLY 

LABOR (his own and often his family's) for a share of the crop. Sharecroppers 

generally furnish no machinery, seed, fertilizer, etc.

4) All land in the operation that is used by the operator's children for 4-H or FFA 

projects, if the operation's equipment is used.

Item 1 – Acres Owned

Include:

all land owned by the operation such as cropland, the farmstead, government 

program land, idle land, orchards, pasture land, wasteland, and woodland. 

Include land that has the potential for growing crops or grazing livestock even if 

it was not used for agricultural purposes during the year. Also include land held 

under title, purchase contract, homestead law, or as part of an estate (if someone 

associated with the operation is an heir or trustee).

Exclude:

non-agricultural land separate from the operation (such as land in subdivisions, 

commercial buildings, timber, etc.) which is permanently out of agricultural use. 

Sometimes you will find a situation where the operator (and/or partners) owns the 

land but has set up the operation so that the land is rented to the operation. This is 

done for tax and other financial benefits. When this occurs, do not include the acres 

the operation rents from the operator as owned acres. Treat them as you would 

acres rented from any other landlord, and be sure the amount of rent paid is 

recorded.

If the operator (as a landlord to the operation) paid some of the expenses, you 

should also handle them the same as for any other landlord. You will usually have to 

probe very carefully in these situations.

Item 2 (a - d) – Acres Rented from Others

There are four categories of rented acres:
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1) Cash rented acres with the payment being a fixed amount are recorded in 

item 2a,

2) Cash rented acres with the payment being a flexible amount are recorded in 

item 2b,

3) Share rented acres are recorded in Item 2c, and

4) Acres used rent-free are recorded in Item 2d.

Include:

All land rented from private individuals, partnerships, corporations, Federal, State 

or local governments, Indian reservations, railroads, etc. if the operation:

1) Paid fixed cash rent. (Item 2a)

2) Paid for use of land with a flexible lease agreement, including hybrid 

rental arrangements. (Item 2b)

3) Paid for use of the land with a share of the crops (either standing or 

harvested) or livestock production. (Item 2c)

4) Had free use of the land. (Item 2d)

5) Was privately owned by the operator, but rented to the operation for tax 

purposes either for free or for rent. This land will not be considered an 

asset to the farming operation.

Exclude:

1) Grazing land rented on a fee-per-head or Animal Unit Month (AUM) basis, 

including public lands the operation has grazing rights, sole use, or yearround use of.

2) Land on which the respondent’s livestock were fed under a contract (for 

example, commercial feedlots).

3) Shared livestock production that does not involve land rental.

4) Short-term land rental agreements where the operator will graze livestock 

for a period of 2-4 months, after which the landlord will harvest crops later 

in the year or has already harvested a crop. In this case, the landlord 

“operates” the land.

If the operation is a corporation that rents land from the operator (who is a private 

individual landowner), record the land as rented from others. 

Be sure you obtain the full number of rented acres from the respondent. 

Farmers/ranchers often do not consider the land they rent as including woods or 

wasteland; they only include the usable land. Even though the farmer/rancher may 
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not consider it that way, the landlord considers the whole parcel rented. If the renter 

was responsible for looking out for the owner's interest in the woodland and/or 

wasteland, or had the right to cut firewood, hunt, etc. on the acres, then these acres 

should be included as acres rented from others.

Many land rental arrangements now feature flexible cash rents, in which the actual 

rent paid may vary with prices, yields, or gross revenues. Include flexible cash 

leases in Item 2b.

Item 3 – Acres Rented To Others

Include:

1) Land this operation owned which was rented to another operation for cash. 

This land should also be included in Item 1.

2) Land this operation rented or leased from someone else but which it 

subleased to another operation. This land must also be included in one of 

the categories in Item 2.

3) Land rented to others for which this operation received a specified amount of 

the crop or livestock produced, a share of the crop or livestock produced, or 

other non-cash compensation.

4) Land this operation let someone else use without ever intending to receive 

payment (rent-free).

5) Pasture or grazing land rented out on a per acre basis for the whole 

productive season. Exclude land rented out on short-term land rental 

agreements where the rentee will graze livestock for a period of 2-4 months 

after which the operator will harvest crops later in the year or has already 

harvested a crop.

6) Privately owned land administered by a Public, Industrial, or Grazing 

Association (PIGA) agency as part of a range grazing unit on a fee-per-head 

or AUM basis through exchange-of-use. This land should also be included in 

Item 1.

7) Land owned but managed for a fee or salary by someone else.

8) Land used for such purposes as cell phone towers, pipelines, roadways, 

windmills, oil wells, etc., in which the operation receives a payment. The 

income received from these items is included in Section H, Item 3h or 3j.

Exclude:

1) Land enrolled in Government programs for which this operation has enrolled 

and makes day to day decisions (such as acres under Direct and Countercyclical Payment Program (DCP), acres in the Conservation Reserve 

Program, etc.).

2) Land worked by sharecroppers on this operating unit.
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3) Land used by a child for 4-H or FFA projects if the operation's equipment was 

used.

4) Land on which crops were grown under contract by this operation.

5) Land on which the operator fed livestock under contract for someone else.

6) Land used for pasturing someone else’s livestock when payment was made 

on a per head, fee, or AUM basis.

7) Land rented out on short-term (grazing) rental agreements where the “renter”

(livestock owner) will graze livestock for a period of 2-4 months after which 

the operator will harvest crops later in the year or has already harvested a 

crop (see page 5-49). The livestock owner in this case is not making 

decisions about the management of the land therefore the land is not rented 

out. This differs from Ag Census.

Item 4 – Total Acres Operated in this Operation

The operation's total farming/ranching operation is the total of Items 1 + 2a + 2b + 

2c+2d - 3. Verify this total with the respondent because it is the basis for the rest of 

the interview. Be sure this total includes all cropland, the farmstead, government 

program land, idle land, orchards, pasture, wasteland, wetlands and woodland 

associated with this operation.

For future sections of this questionnaire, data will be collected for the operation as 

defined by the acres in Item 4.

Item 5 – Acres Considered Cropland

Cropland is any tillable land currently in crop production or land that has previously 

been tilled and used for crops and could be tilled again without additional 

improvements.

Include:

1) Land in crop-pasture rotation and cropland used for pasture or grazing during 

the current year.

2) Land in summer fallow.

3) Idle cropland (no crops planted or harvested in current year).

4) Cropland diverted for government programs (including CRP), unless the land 

is planted to trees.

5) Fruit orchards, vineyards, nut trees, and citrus groves.

6) Vegetables, melon crops, and other specialty food crops.

7) Nursery crops, turf grass, sod, and Christmas trees.
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8) Land in hay crops, including wild hay.

9) Pastureland that has been tilled in the past and the land could be tilled again 

without first clearing brush, trees, undergrowth, etc.

Exclude:

1) Pasture and rangeland that has never been tilled.

2) Government program acres planted to trees. These acres are woodland.

3) Woodland and wasteland.

5.2.3 Rented Land

5.2.3.1 Land Rented From Others 

This section collects information on the cash rent paid and/or the value of the landlord’s 

share of production on land rented from others. It also obtains the operator's best 

estimate of the total market value of all the land and buildings Cash Rented, Share 

Rented, or Used Rent Free by the operation during the year.

Item 6 – Cash Rent Paid for Acres Rented From Others 

Include rent for land and/or buildings. Record the total amount paid during the year 

to all landlords for cash rented acreage. When an operator rents buildings, they are 

renting the land under the buildings as well. The land cannot be used by the 

landlord if the building is rented. If the operator rents the buildings only, record the 

number of acres the building site covers in Section A, Item 2a.

Ask this question even if no land was rented during the reference year. The 

operation may have paid rent for land operated in a prior year or pre-paid rent for the 

upcoming year. If we skip this question just because the operation did not rent any 

land in the reference year, we might miss previous year’s rent paid or rent paid in 

advance. If an operation had more than one cash rental arrangement, the sum of all

the individual rents should be recorded.

For crops such as sugarbeets, co-op shares may be rented with or without 

associated land. The rent, if any, associated with the rental of the land, should be 

included in this item. 

Exclude:

1) Any government payments landlords received from these acres. 

2) Any short-term livestock grazing arrangements where the livestock owner 

grazes livestock for a few months, but the owner will harvest crops later in the 

year. The payments for this short term grazing arrangement should be 

recorded in Item 8b.
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Buildings for Non-Agricultural Purposes:

If the operation rented a building for a non-agricultural use (for example, a packing 

shed), determine whether or not the operator keeps income & expenses of the 

packing shed separate from the agricultural enterprise.

If the financial records are kept separately, do not count the packing shed rental as 

part of the farm. Record it as part of the profit or loss of a separate business in 

Section N, Item 1c. Also, record any other income and expenditures of the packing 

shed in Section N and NOT in Sections E through M of the ARMS questionnaire.

If the financial records are kept together, count the packing shed rental as part of 

farm rent in this item. Also, record any income or other expenditures of the packing 

shed in the appropriate items in Sections E through M of the ARMS questionnaire.

Items 7-7a – Change in Amount of Cash Rent Paid

Items 7 and 7a on the CRR are research questions that are unique to the 2015 

ARMS III survey. Please see the Appendix for Section A for item by item 

interviewer’s assessment.

Item 8a (7a on Ver 2-4) – Usage Fees Paid for Use of Public Land

(Mostly found in AZ, CA, CO, ID, MT, NE, NV, NM, ND, OK, OR, SD, TX, UT, WA, 

and WY)

The operations that use public, industrial or grazing association land will likely have 

rental payments on an AUM basis. This is usually controlled by the Bureau of Land 

Management (BLM), the Forest Service (FS), Bureau of Indian Affairs (BIA), or by 

grazing associations, energy companies, timber companies or railroads.

Include expenses for use of public land, industrial land or grazing association land 

associated with a range grazing area (allotment or unit). Include all expenses for 

any year, as long as they were paid in the reference year.

Exclude expenses for use of land controlled by private individuals or partnerships 

even if the operator reports livestock were pastured on an AUM basis on this land 

(this expense should be recorded in Item 8b, or 7b on Versions 2-4).

If the operation owned (or rented from others) land which was administered on an 

exchange-of-use basis, these acres should be reported as owned in item 1, or rented 

from others item 2 and as acres rented to others in Item 3. Record the gross fees 

paid in this Item (8a, or 7a on Versions 2-4). The value of the cash rent received for 

the land administered on an exchange for use basis is recorded in Item 11 (10 on 

Versions 2-4).
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Item 8b (7b on Ver 2-4) – Amount Paid for Pasturing Livestock on Private Land 

Excluding contract arrangements, record the total amount paid in the reference year 

for pasturing or grazing livestock on privately owned land on a fee per-head (AUM), 

gain, or other basis. 

Include expenses for a 2-4 month rental where the operator will graze livestock and 

the landlord will harvest crops from the same land later in the year or has already 

harvested a crop.

Exclude expenses for pasturing or grazing livestock on public land. These expenses 

should be recorded in Item 8a (or 7a on Versions 2-4).

Item 9a (8a on Ver 2-4) – Landlord’s Share of Crop Production (Market Value) 

Record the total MARKET VALUE of all commodities from Section B given to 

landlord(s) in return for use of the land. The value of the landlord’s share is defined 

as the value at the time the landlord takes possession of the crop. Probe to make 

sure that the operator does not include the value of hay or other crops that were 

used on the farm. This item is very important because it is used to determine the 

value of the landlord's share for rent. 

Item 9b (8b on Ver 2-4) – Landlord’s Share of Livestock Production (Market Value)

Before asking this item, probe to find out if any of the operation's share-rented acres 

involved livestock production in Section C. Record clear notes if livestock are 

unrelated to share rent of land.

Record the Market Value of the share of livestock production given to landlord(s) 

during the year. The value per unit of the landlord’s share is defined as the price at 

the time the landlord takes possession of the livestock. This value could be zero if 

no shared livestock were marketed during the year. In this case, write a note to 

indicate that zero is valid. If the respondent does not know the value, probe for the 

best estimate.

Exclude livestock production not associated with land. Shared livestock production 

that is not part of a land rental arrangement (such as raising cattle on shares) should 

be reported in Section C. See section 5.6.3.1 for an example of recording cattle on 

shares.

Item 10 (9 on Ver 2-4) – Value of Land & Buildings on Acres Rented From Others 

Record the operator's best estimate of the total market value of all the land and 

buildings Cash Rented, Share Rented, or Used Rent Free by the operation during 

the year. (This should correspond to acres reported as rented in Section A, Item 2 

and does not include grazing land rented on a fee-per-head or AUM basis.) Include

the value of any water rights, any mineral rights, permanently installed irrigation 

equipment, frost protection systems, permanent plantings in orchards, groves, 

vineyards, Christmas trees, grazing permits, etc., that go with the land. Exclude the 

value of water or mineral rights if they were sold.
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5.2.3.2 Land Rented To Others 

Item 11 (10 on Ver 2-4) – Cash Rent Received for Acres Rented to Others 

Do not skip this item even if the operation rented no land out during the year. 

The operation may have received income during the year for land rented to others in 

a previous year, or the operation may have received a pre-payment of land to be 

rented the following year.

Include rent for land and/or buildings. Record the total cash rent received during 

the year, for all land rented to others for cash.

Include:

1) Rent owed to the operation for a previous year received during the 

reference year. Any rent received in advance for a later year should also 

be included. 

2) Government payments received in association with these acres should 

also be included.

3) For privately owned land administered by a Public, Industrial, or Grazing 

Association agency as part of a range grazing unit on a fee-per-head or 

AUM basis through exchange-of-use, include the value of AUMs 

administered by BLM under exchange for use.

Exclude:

1) Short-term livestock grazing arrangements where the livestock owner 

“rents” land to graze livestock for a period of 2-4 months, but the operator 

will harvest crops from the same land later in the year or has already 

harvested a crop. The payments received for this short term grazing 

arrangement should be recorded in Section H Item 3b.

2) The income received from cell phone towers, underground pipelines, 

roadways, etc. should be included in Section H Item 3j.

3) The income received from windmills, wind turbines, oil wells, etc. should 

be included in Section H Item 3h.
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Item 12 (11 on Ver 2-4) – Share Rent Received for Acres Rented to Others 

Do not skip this item even if the operation did not share rent land out during 

the year. The operation may have received its share of commodities in the 

reference year for land it rented to others in the previous year. Record the total 

value of the share of production received by the operation plus the value of all 

government payments received in association with the share rented land.

If the operator (as a landlord) has received his share of the production but has not 

sold it yet, record the operator's best estimate of its market value plus the amount 

received in government payments associated with the share rented land.

Be sure that commodities the operator gets in payment of share rent ARE NOT 

INCLUDED in the sales reported.

Item 13 (12 on Ver 2-4) – Value of Land & Buildings on Acres Rented To Others 

If land is rented to others (Item 3), record the operator's best estimate of the total 

market value of all the owned land and buildings RENTED TO OTHERS. (This 

should correspond to acres reported as rented to others in Section A, Item 3.) 

Include the value of any water rights, any mineral rights, permanently installed 

irrigation equipment, frost protection systems, permanent plantings in orchards, 

groves, vineyards, Christmas trees, grazing permits, etc., that go with the land. 

Exclude the value of water or mineral rights if they were sold.

Items 14-17 – Conservation Practices

Items 11-17 are research questions that are unique to the 2015 ARMS III survey.

Please see the Appendix for Section A for item by item interviewer’s assessment. 
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5.3 Section B—Acreage, Production, and Cash Sales

5.3.1 Section Purpose

Acreage and production reported for crops are used to develop estimates of the value of 

crops produced. This information is also important to determine the types of crops 

grown. For example, are farms diversifying by growing a more varied mix of 

commodities?

Survey weights will be adjusted/calibrated so that expansions of harvested acreage for 

many crops reported in these sections match official NASS estimates at regional and 

national levels.

To avoid double counting crop and livestock value of production, the quantity of hay, 

grain, and other commodities produced and used on the farm must be subtracted out of 

total production. For example, grain fed to livestock would be reflected in the value of 

livestock production rather than grain production. Crops sold are not used on farm and 

unless livestock are present most commodities are not ‘used on farm’.

5.3.2 Crop Acreage and Production: Item 1

5.3.2.1 General Instructions

This section accounts for all crops harvested on the selected operation during the year. 

All harvested acreage figures should be rounded to the nearest whole acre, except 

potatoes, tobacco, and nursery/greenhouse crops, which are reported to the nearest 

tenth of an acre. Total production and ‘used on this operation’ must be reported in the 

unit pre-printed on the questionnaire.

For operations that were in business for only part of the year, collect data for the part of 

the year when they were operating.

Acres not yet Harvested:

If a planted crop would normally be harvested before December 31 (corn, soybeans, 

etc.) but harvest was delayed until the following year because of weather conditions, 

equipment problems, etc., it should be included in Column 2 “Acres Harvested,” with the 

estimated production included in Column 3 “Total Production”.

Cash or Open Market Sales:

For income received in the reference year, report the dollar amount this operation 

received after subtracting marketing expenses. Exclude contract sales or removals and 

landlord’s share of sales. 

Crop Revenue from Previous Year’s Production:

If income was received in the reference year for a crop harvested in a prior year, add 

those dollars only to sales of the same current year crop sold. If there is no current 

production of that crop, record the dollars in Column 5 but leave Columns 2 through 4 

blank.
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5.3.2.2 Crop Columns 1–5

Column 1 – Crop

Most major field crops are reported in this section. The questions for crops always 

relate to the total acres in this operation recorded in Section A, Item 4. Include all 

crops harvested from these acres, but exclude any crops harvested from land rented 

or leased to others or worked on shares by others during the year.

This column identifies the crops harvested on this operation during the year. The 

crops are divided into four categories: Field Crops, Small Grains, Dry Hay Crops, 

and Other Crops. Within each category, crops of interest are indicated. These may 

be specific crops, such as corn for grain, or more general, such as fruits, nuts, and 

berries. 

Commodity Specific Instructions

Field Crops:

Corn

Record the acres of corn harvested for grain, seed, silage, or greenchop for 

all states. Corn harvested for seed should be included as corn harvested for 

grain. Do not report field corn or sweet corn hogged-off as a harvested crop.

Exclude:

 Sweet corn should be included in All Other Crops.

 Popcorn and high moisture corn (for non-grain purposes) should 

be included in All Other Crops.

 Do not report field cor or sweet corn hogged-off as a harvested 

crop.

Cotton

Record all types of cotton harvested. If cotton was grown in a "skip" row 

pattern, count only the land harvested for cotton, excluding the skip row 

acreage.

Peanuts

Record only peanuts harvested for nuts.

Exclude peanuts cut for hay; record as “Hay, Dry, All Others”.

Potatoes

Record potato acreage to the nearest tenth of an acre.

Exclude:

 Potatoes produced for home consumption.

 Sweet potatoes should be included All Other Crops.
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Rice

Include only short, medium, and long grain varieties. Brown and wild rice 

should be reported as All Other Crops. If rice was harvested twice from the 

same planted acreage (a ratoon crop), count the acreage only once but 

record all production.

Sorghum

Include milo.

Exclude sorghum-sudan crosses harvested for hay; record as “Hay, Dry, All 

Others.”

Soybeans

Include only soybeans harvested for beans.

Exclude soybeans cut for hay; record as “Hay, Dry, All Others” and soybeans 

cut for greenchop, haylage, or silage as “All Other Crops”.

Tobacco

Include all types of tobacco harvested in the reference year. Record tobacco 

acreage to the nearest tenth of an acre. If “skip” rows or “sled” rows were 

present, record only the actual tobacco acreage.

Exclude tobacco transplants that were grown and sold from this operation;

record as Nursery and Greenhouse Crops.

Small Grains:

Wheat for Grain

Include all types of wheat (winter, durum and other spring) harvested for grain or 

seed. 

Exclude mixtures of wheat, oats, barley, and other grains planted for use as hay, 

forage or silage crops. If they were harvested for hay, these mixtures should be 

recorded in “Hay, Dry, All Others”. If they were harvested as silage, they should 

be recorded in “All Other Crops”. If the crop was not harvested (only grazed), do 

not record it at all. 

Do not report the acres or quantity produced of straw baled from small grain 

crops that were previously harvested for grain or seed. Report straw sales in the 

appropriate type of grain from which it was made. For example, if spring wheat 

straw was sold, include the sales in Item Code 156.

Dry Hay Crops:

Include only acres cut for hay If a hay crop and haylage are harvested from the 

same acres, record this as double-cropping with the hay reported in the 

appropriate line and the haylage reported in “All Other Crops”.

Alfalfa and Alfalfa mixtures harvested for dry hay should be recorded under “Hay, 

Dry, Alfalfa and Alfalfa Mixtures”.
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All non-Alfalfa hay harvested for dry hay, including wild hay, should be recorded 

under “Hay, Dry, All Others”. 

If two or more cuttings of the same crop were made from the same field:

1) Record the acreage only once.

2) Record the total production from all cuttings combined. For example, 

suppose two cuttings were made from a 50 acre hay field with the first 

cutting producing 105 tons and the second cutting yielding a total of 65 

tons. The total production for the 50 acre crop would be 170 tons 

(105+65).

3) If hay was cut from the same land from which small grains were 

harvested for grain,

a) Record the acreage cut for hay as “Hay, Dry, All Others.”

b) Record the acreage harvested for grain in the appropriate item in the 

Small Grains section.

Exclude acres “harvested by grazing”, straw and stubble, except for the value of 

sales which is recorded in the item code associated with the grain from which the 

straw was made. 

Acreage from which only grass silage, hay silage (haylage), greenchop, or alfalfa 

seed were harvested should be reported in “All Other Crops”.

Acreage from grass seed such as Bermuda, Sorghun, Alfalfa, etc. should be 

reported in “All Other Crops”.

Other Crops:

Other Oilseeds

Include all other oilseeds harvested (oil and non-oil varieties, and crops 

such as flaxseed, mustard seed, rapeseed, safflower, and sunflower. 

Exclude soybeans and canola. 

Sugarcane or Sugarbeets

Record the acreage of sugarcane or sugarbeets harvested during the 

reference year, regardless of the year planted. 

Exclude acreage harvested for seed.

Vegetable Crops

1) Multiple Cropping – Record entire acreage of each vegetable crop 

planted and harvested.
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For example: If 20 acres of radishes were harvested from a field and the 

field was replanted in radishes and harvested again, record 40 acres 

harvested.

2) Sales from Home Gardens – Record home garden acres harvested only 

if there were sales from the home garden. DO NOT record vegetables 

grown only for home use.

3) Two or More Pickings – If two or more pickings were made from the 

same planting, record the acres harvested only once.

Vegetables for Processing

Include all vegetables harvested that were for processing.

All Other Vegetables and Melons

Include all vegetables harvested that were not for processing (i.e. for 

fresh market) and all melon crops (watermelons, cantaloupes, and other 

melons).

Fruits, Nuts and Berries

Include all bearing acreage of fruit, nut, and berry crops (including citrus 

and strawberries). 

Exclude non-bearing acres and abandoned acres.

Nursery and Greenhouse Crops

Include flowers, ornamentals, mushrooms, tobacco transplants for sale, 

harvested sod, Christmas trees, turf grass, hydroponic sprouts, alfalfa 

sprouts, etc. Record nursery and greenhouse acreage to the nearest 

tenth of an acre.

All Other Crops

This category is for recording information on all harvested crops not 

previously recorded in this section. It is a catch-all category for other 

crops grown and harvested on this operation. For each Other Crop 

reported, first determine if that crop should have been reported in another 

category above. If so, record it and all required information in the 

appropriate category. 

Include sweet potatoes, brown and wild rice, and haylage.

Exclude straw and stubble from crops, except for the value of sales 

which is in the item code associated with the grain from which the straw 

was made.
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Column 2 – Harvested Acres

Report harvested acreage to the nearest whole acre, except for potatoes and 

tobacco. Make sure the respondent is not reporting planted acres by crop when you 

are asking only for harvested acres. The total of harvested acres in Column 2 will 

usually be equal to or less than cropland and total acres in the operation. Double 

cropping can be the exception to this relationship.

Include:

1) acreage of crops harvested in the reference year.

2) acreage of crops intended for harvest in reference year even if harvest 

was delayed until the following year due to bad weather, etc. 

3) acreage for which two uses were made of the same crop. An example 

is alfalfa acreage harvested for both hay and seed. These acres are 

recorded twice: as acres of Alfalfa in Item Code 157 and as acres of 

Alfalfa seed harvested in All Other Crops, Item Code 182. 

Exclude:

1) acreage for second or later harvests (for the same use) of any crop 

from a single planting, such as second or third pickings of cotton and 

ratoon crops of rice.

2) acres of previous year’s crops not harvested until the reference year 

due to weather conditions, etc. (However, cash sales of such crops 

will be included in column 5.)

Column 3 – Total Production

Record the TOTAL PRODUCTION of the harvested commodity. For some 

respondents, this may require multiplying average yield per acre by the number of 

acres harvested (column 2) and recording the total. Mis-recording yield and not total 

is a common error.

Production MUST be reported in the unit indicated inside the item code box. If the 

operator reports production in a unit different from the one indicated, make the quick 

conversion (cwt = 100 pounds) or be sure to record complete information about that 

unit, including unit weight. Later, you, or the Regional Field Office, can to convert the 

total production into the standard unit.

If harvest is not complete at the time of the interview, ask the respondent for an 

estimate of final production from all acres harvested and remaining to be harvested. 

The crop left on the field is yet to be sold (since it is still on the farm), so the asset 

value of that crop (estimated production multiplied by price) needs to be recorded in 

Section J, Item 3a. Record the expenses spent for both the harvested and unharvested crop during the year in Section I (Farm Expenditures). Be sure to record 

notes for unusual items.
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Include the landlord’s portion in the total production.

** Dry Edible Beans, Vegetables for Processing, All Other Vegetables and 

Melons, Fruits, Nuts, and Berries, and “All Other Crops” do not have an 

applicable response for columns 3 or 4. Only acres harvested (column 2) and cash 

sales (column 5) are reported for these commodities. Report each area only once in 

column 2 regardless of how many crops were harvested from the same area.

** Column 3 and column 4 are unique for nursery and greenhouse crops. Report 

the Square Feet under Glass or Other protection for nursery and greenhouse crops 

under column 3. Report the Acres in the Open for nursery and greenhouse crops 

under column 4. 

Column 4 – Amount of Production Used on This Operation

This column is used to record crops produced on the operation that are used as 

production inputs and not sold or removed for the operation. Do not record the 

quantity of the crop sold. Record the quantity of the share of production belonging to 

the operation that has been (or will be) used on the operation for feed, seed, etc.

Include:

 The landlord share that was used on the operation. 

Exclude:

 any production that was (or will be) used for human consumption 

(record the market value of this production in Section I (Farm 

Expenditures), Items 29 and 30).

 the landlord’s share of production if it was used outside the operation.

 any crop production that was fed to non-owned livestock as part of a 

production contract with the livestock owner. This production should 

be recorded as a cash sale to the livestock owner and the same value 

for the crop sold should be recorded as a contractor expense in 

Section I, Item 6.

** Dry Edible Beans, Vegetables for Processing, All Other Vegetables and 

Melons, Fruits, Nuts, and Berries, and “All Other Crops” do not have an 

applicable response for columns 3 or 4. Only acres harvested (column 2) and 

cash sales (column 5) are reported for fruits, nuts, and berries. Report each area 

only once in column 2 regardless of how many crops were harvested from the 

same area. For Nursery and Greenhouse Crops, report the Square Feet under 

Glass or Other protection under column 3. Report the Acres in the Open under 

column 4. 
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Column 5 – Cash or Open Market Sales minus Marketing Expenses

After subtracting marketing expenses, record the amount received in 2015 from cash 

sales for field crops. Marketing expenses include check-off, drying, commission, 

ginning, inspection, storage, and transportation, etc. (Please see Section I for a full 

explanation of marketing expenses).

Include:

 If the crop was grown in the reference year, record columns 2 through 4, and 

record current crop cash sales plus all crop sales received in the reference 

year from crops harvested in previous years. If the crop was not grown in the 

reference year, columns 2 through 4 should be blank and dollars recorded in 

column 5.

 CSA sales are considered a cash sale and not a contract.

 The value of straw produced on this operation and sold. Report the straw

(crop residue) sales in the appropriate type of grain from which it was made. 

For example, if wheat straw was sold, include the sales with the wheat for 

grain value of sales.

 Value of the Cottonseed.

Exclude:

 Marketing Contract sales recorded in Section E, Item 2.

 Fees from Production Contracts recorded in Section F, Item 2.

 Value of landlord share of production, which is recorded in Section A, Item 9a

(8a on versions 2-4).

 Sales from other farm related activities, such as trading and speculation or 

livestock dealer activities (recorded in Section H).

 Value of sales from land rented to others or worked on shares by others.

 Amount received in the reference year for crops sold in earlier years. This is 

recorded in Section G, Items 1a and 1a(i) (Accounts Receivable).
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5.4 Section C Livestock

5.4.1 Purpose of Sections

This section provides a place to record removal, inventory, ownership, and cash sales

data for the operation described in Section A. Livestock removals and sales are used to 

develop estimates of the value of livestock production. This information allows us to 

determine the degree to which operations are diversified across varied types of livestock 

and enables us to assess trends in consolidation of the livestock industry.

Include landlord’s share, animals sold on the open market (non-contract), animals 

removed from this operation under a marketing or production contract in the reference 

year, and FFA / 4-H livestock projects, in inventory cells.

5.4.2 Number, On Hand, Owned by Operation, Sold and/or Removed,

and Cash Sales Item 2, Columns 2-5.

General Instructions by Column

Column 2—Total Number on Hand

Record all livestock, poultry, and animal specialties on the total acres operated on 

December 31 regardless of ownership. Include:

 Livestock and poultry raised, fed, or pastured under a contract or on a custom 

basis if they were located on the total acres operated on December 31.

 Livestock on land used rent free or on public, private, or industrial property under 

a grazing permit, per head, or AUM basis. 

 Livestock on this operation that were owned by members of the family, i.e. 4-H 

and FFA project cattle and calves raised on this operation that were owned by a 

son or daughter.

 Beefalo

There are certain circumstances under which livestock or poultry should be recorded as 

inventory on the operation on December 31, even though they are not on the acres 

recorded in Section A. Examples include livestock or poultry:

 

 Being moved from one place to another.

 On unfenced land.

 On short-term pasture, such as wheat or crop residue.

 Grazing in National forests, grazing districts, open range, or on land under 

permit.

Exclude livestock owned that were being custom fed, for this operation, in feedlots 

operated by others on December 31. Those livestock will be recorded in Section D.
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Column 3—Total Number owned by the Operation

Record the number of livestock on the operation on December 31 (Column 3) that 

are also owned by the operation. Column 3 should be equal to or less than Column 

2.

Column 4—Total Number Sold or Removed in reference year

Record all livestock, poultry, poultry products (ex: eggs), dairy products (ex: milk) 

and animal specialties that were sold on the open market, delivered under a 

marketing contract or removed under a production contract from the operation 

between January 1 and December 31 during the reference year regardless of who 

owned them. “Removed” or “moved” is intended for livestock under a production 

contract that were never owned by the operation.

Include any livestock products, livestock, or poultry that belonged to landlords, 

contractors, or any other person. Follow descriptions carefully. Animal products like 

cheese, honey, semen, etc. are recorded in item 2k.

Exclude animal deaths. Deaths do not add a value of production, and they are not 

counted.

Do not include animals that were moved from this operation:

 For short term grazing on corn or small grain stubble and then returned to this 

operation.

 For the summer to public grazing land and then returned to this operation.

 For the summer to private or grazing association land and then returned to 

this operation.

Column 5—Cash Sales

After subtracting marketing expenses, record the amount received in the reference 

year from cash sales of cattle, hogs, poultry, eggs, milk, other animals, and animal 

products sold from this operation. Marketing expenses include check-off, drying, 

commission, inspection, storage, transportation, and yardage, etc. (Please see 

Section I for a full explanation of marketing expenses).

Include:

 Livestock sales revenue received during the year from livestock produced 

during the reference year and earlier years.

 CSA sales are considered a cash sale and not a contract.

Exclude:

 Marketing Contract sales recorded in Section E. (Would be double counting).

 Production Contract movements recorded in Section F. (Would be double 

counting).

 Landlord share of production, which is recorded in Section A, Item 9b (8b on 

Versions 2-4). 
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 Sales from other farm related activities, such as trading and speculation or 

livestock dealer activities (recorded in Section H).

 Value of sales from land rented to others or worked on shares by others.

 Amount received in the reference year for livestock sold in prior years. This 

is recorded in Section G Items 1a and 1a(i) (Accounts Receivable).

Instructions by Commodity

When the questionnaire refers to any year’s production, in most cases, livestock sales 

will only be from the current year and sales of previous year’s production will be 

recorded in accounts receivable.

Item 2a – Beef Cows

Report the number of beef cows that were on this operation (regardless of 

ownership) on December 31 in column 2. Include beef heifers that calved by 

December 31. Of the (column 2) beef cows, report the number owned by this 

operation on December 31 in column 3. Exclude beef heifers that had not calved by 

December 31, and report them along with steers, calves, and bulls in Item 2c. 

Report the number of beef cows that were sold on the open market, delivered 

under a marketing contract or removed under a production contract from the 

operation between January 1 and December 31 (regardless of ownership) in column 

4. Beef cull cows removed are recorded in 2c.

Report the amount received in cash sales of breeding cows from any year’s 

production in column 5. Exclude marketing contract sales. Beef cull cows sales are 

reported in 2c.

Item 2b – Milk Cows

Report the number of milk cows that were on this operation (regardless of 

ownership) on December 31 in column 2. Include dry milk cows and dairy heifers 

that had calved by December 31. Of the (column 2) milk cows, report the number 

owned by this operation on December 31 in column 3. Exclude dairy that had not 

calved by December 31, and report them along with steers, calves, and bulls in Item 

2c. 

Report the number of milk cows that were sold for breeding purposes on the open 

market, delivered under a marketing contract or removed under a production 

contract from the operation from January 1 through December 31 (regardless of 

ownership) in column 4. Dairy cull cows removed are recorded in 2c.

Record the amount received in cash sales of breeding milk cows from any year’s 

production in column 5. Exclude marketing contract sales. Milk cull cow sales are 

reported in 2c.
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Item 2c – Other Cattle

Report the number of steers, calves, bulls and heifers that were on this operation

(regardless of ownership) on December 31 in column 2. Of the (column 2) livestock, 

report the number owned by this operation on December 31 in column 3. Include

number of cattle and calves of all ages that were grazing or being fed for others on a 

custom or contract basis on December 31 on this operation. Report the number of 

steers, calves, bulls and heifers that were sold on the open market, delivered 

under a marketing contract or removed under a production contract from the 

operation between January 1 and December 31 (regardless of ownership) in column 

4. Report the total cash sales received in column 5. Cull cows from items above are 

recorded here and will have a lower average value than the breeding stock.

Item 2d – Total Cattle & Calves

Report the total number of cattle and calves of all ages located on this operation

December 31 in column 2, total number owned by this operation on December 31 in 

column 3, total number sold or removed from this operation in column 4, and total 

cash sales received in the reference year in column 5. Items 2a, 2b, and 2c should 

add to the numbers reported in Item 2d for all columns.

Item 2d(i) – Cash Sales of Breeding Livestock

Report the portion of total cash sales received in the reference year of breeding 

cattle sold from this operation (equal to or less than 2d) in column 5.

Exclude all cattle grown under a production contract (reported in Section F).

Item 2d(ii) – Recognized Gain or Loss on Sales of Breeding Cattle

Record the recognized gain or loss on breeding cattle cash sales from Item 2d(i)

above.

For raised livestock, the gain will generally be the amount of cash sales proceeds 

reported above since the costs of raising the livestock have already been deducted 

as a business expense.

For purchased livestock, the gain or loss is equal to the cash sales proceeds 

minus any remaining purchase costs that have not already been recovered through 

depreciation.

Item 2e – Milk Sold or Moved

Record the total amount (in hundredweight – CWT) of milk sold on the open market 

or removed under contract from the operation in the reference year regardless of 

ownership in column 4. Report the total value of cash sales received during the year

from milk produced and sold from this operation in column 5. Record the value of 

cash sales before any milk check expense deduction (ex: hauling fees). Exclude 

milk used to make chees and any other processed dairy products. Record it in 

Section H, Item 3j as pounds of product (include a note that explains low or zero 

production from milk cows because IC270 is low or blank).
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Item 2f—All hogs and pigs

Report the number of hogs and pigs that were on this operation (regardless of 

ownership) on December 31 in column 2. Of the (column 2) hogs and pigs, report 

the number owned by this operation on December 31 in column 3. Report the 

number of hogs and pigs that were sold on the open market, delivered under a 

marketing contract or removed under a production contract from the operation 

from January 1 through December 31 (regardless of ownership) in column 4. Report 

the total cash sales received in the reference year in column 5. Exclude sales from 

marketing contracts or the value of hogs produced under production contracts

Item 2f(i)– Cash Sales of Hog Breeding Stock

Report the total cash sales received in the reference year of breeding hogs sold or 

moved from this operation during the year.

Exclude all hogs grown under a production contract (reported in Section F), and cull 

hog sales.

Item 2f(ii) – Recognized Gain or Loss on Cash Sales of Breeding Hogs

Record the recognized gain or loss on breeding hog cash sales from Item 2f(i) 

above.

For raised livestock, the gain will generally be the amount of cash sales proceeds 

reported above since the costs of raising the livestock have already been deducted 

as a business expense.

For purchased livestock, the gain or loss is equal to the cash sales proceeds 

minus any remaining purchase costs that have not already been recovered through 

depreciation.

Item 2g – Egg Layers and Pullets

Egg layers are female chickens that can produce a marketable egg suitable for table 

or hatching use. Female chickens that are too young to produce a marketable egg 

are pullets (less than 18 weeks). Report the number of egg layers and pullets that 

were sold on the open market, delivered under a marketing contract or 

removed under a production contract from the operation from January 1 through 

December 31 (regardless of ownership) in column 4. Include the number of egg 

layers in molt. 

Report the number of egg layers and pullets that were on this operation (regardless 

of ownership) on December 31 in column 2. Of the (column 2) egg layers and 

pullets, report the number owned by this operation on December 31 in column 3.

Include layers used to produce eggs for home consumption, and “yard chickens.” 

Exclude layers from exotic breeds and game birds. 

After subtracting marketing expenses, record the amount received in the reference 

year from cash sales of egg layers and pullets from this operation in column 5.

Exclude sales from marketing contracts or the value of egg layers produced under 

production contracts.
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Item 2g(i) – Chicken Eggs

Record the total number (in dozens) of all chicken eggs (including hatching eggs), 

sold on the open market or removed under contract in the reference year, regardless 

of ownership in column 4.

Report the total cash sales received in the reference year of eggs sold from this 

operation during the year in column 5. Do not report the value of eggs produced 

under marketing and production contracts.

Item 2h – Turkeys

Report the number of turkeys that were on this operation (regardless of ownership) 

on December 31 in column 2. Of the (column 2) turkeys, report the number owned 

by this operation on December 31 in column 3.

Report the number of turkeys (all types) that were sold on the open market, 

delivered under a marketing contract or removed under a production contract 

from the operation from January 1 through December 31 (regardless of ownership) in 

column 4.

After subtracting marketing expenses, record the amount received in the reference 

year from cash sales of turkeys from this operation in column 5. Exclude sales from 

marketing contracts or the value of turkeys produced under production contracts.

Item 2i – Broilers

Report the number of broilers that were on this operation (regardless of ownership) 

on December 31 in column 2. Of the (column 2) broilers, report the number owned 

by this operation on December 31 in column 3.

Report the number of broilers that were sold on the open market, delivered under 

a marketing contract or removed under a production contract from the operation 

from January 1 through December 31 (regardless of ownership) in column 4.

After subtracting marketing expenses, record the amount received in the reference 

year from cash sales of broilers from this operation in column 5. Exclude sales from 

marketing contracts or the value of broilers produced under production contracts.

Item 2j – Other Poultry

Report the number of all other poultry that were on this operation (regardless of 

ownership) on December 31 in column 2. Of the (column 2) other poultry, report the 

number owned by this operation on December 31 in column 3. 

Record the total number of head of other poultry, and/or their products not accounted 

for in Items 2g, 2h and 2i that were sold on the open market, delivered under a 

marketing contract or removed under a production contract from the operation from 

January 1 through December 31 (regardless of ownership) in column 4. Be sure to 

note the type of livestock reported in this item. Include broiler and other chicks on 

hatchery records. Also ducks, geese, exotic birds, and other poultry not previously 
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reported. Birds such as pheasants or chukars used for conservation, restoration, or 

hunting, such as on a game farm, should be reported only by the operation which 

raised the birds.

After subtracting marketing expenses, record the amount received in the reference 

year from cash sales of all other poultry from this operation in column 5. Only the 

market value of the birds raised are included in the cash sales. Hunting fees 

received that are attributed for guide services, lodging, or transportation is reported 

in Section H, Item 3j. Exclude sales from marketing contracts or the value of poultry 

produced under production contracts.

Item 2k – Other animals and other animal products

Report the number of all other animals that were on this operation (regardless of 

ownership) on December 31 in column 2. Of the (column 2) other animals, report the 

number owned by this operation on December 31 in column 3.

Report the number of other animals that were sold on the open market, delivered 

under a marketing contract or removed under a production contract from the 

operation from January 1 through December 31 (regardless of ownership) in column 

4.

After subtracting marketing expenses, record the amount received in the reference 

year from cash sales only of other livestock from this operation in column 5. 

Include the sales of all other livestock, animal specialties, and their products not 

reported in previous items. Other livestock include, but are not limited to: alpacas, 

llamas, bees and honey, bison, commercial aquaculture, deer in captivity, elk in 

captivity, goats (including goat milk and mohair), live mink, live rabbits, lab animals, 

mules, pleasure horses, ponies, worms, sheep (including wool) etc.

Exclude contract sales or removals and landlord’s share of sales. Include breeding 

stock.

Item 2k(i) –Cash Sales of Other Animals (Breeding Stock)

Record the cash sales on other animals classified as breeding stock from Item 2k 

above.

Item 2k(ii) – Recognized Gain or Loss on Cash Sales of Other Animals (Breeding 

Stock)

Record the recognized gain or loss on other animals classified as breeding stock 

from Item 2k(i) above.

For raised livestock, the gain will generally be the amount of cash sales proceeds 

reported above since the costs of raising the livestock have already been deducted 

as a business expense.

For purchased livestock, the gain or loss is equal to the cash sales proceeds 

minus any remaining purchase costs that have not already been recovered through 

depreciation.
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5.5 Section D – Other Ops Growing/Feeding/Raising Livestock for this 

Operation

If this operation paid another operation a fee for the service of growing, feeding, or 

raising a commodity (owned by the selected operation), then answer this question ‘YES’ 

(the operation is acting as contractor).

The commodity remains an asset of the selected operation. (It is neither sold to the 

contractee operation, nor is ownership transferred to that operation.) Summary formulas 

add these items to expenses or assets when appropriate.

Keep in mind that any livestock, sales, or expenditure data recorded in this 

section are not recorded anywhere else on the questionnaire. This is referred to 

as the “in the fence” rule.

Examples of these types of contracts include:

 A cow/calf producer who has calves fed out through a feedlot.

 A dairy producer who pays another operation to raise the dairy producer’s

replacement heifers. (See special handling instructions for this type in Column 6 

instructions below.)

 A hog farrowing operation that contracts with another operation to raise feeder 

pigs up to slaughter weight.

Example:

Respondent has a Production Contract with a Feedlot and a Marketing 

Contract with a Meatpacker

In this case the respondent is the owner of the cattle, and has a production contract 

with a feedlot (the respondent is the contractor). This contract should be reported in 

Section D. This includes all expenses paid or reimbursed by the respondent 

(contractor) to the feedlot. These expenses should only be recorded in Section D. 

They should not be recorded in Section I (Section I is used to record expenses 

incurred on the respondent’s operation).

If the finished cattle are removed for slaughter from the feedlot, the receipts from the 

sale of the cattle should be recorded in Section D, regardless of whether the sale is 

made by the respondent or by the feedlot acting on the operator’s behalf. If the cattle 

are returned to the operation prior to sale, then the receipts from the sale should be 

recorded as a cash sale in Section C or as a marketing contract sale in Section E.

If the feedlot was also a respondent, the feedlot would report a production contract in 

Section F and would report the expenses that were paid by the cattle owner 

(contractor) in Section I, Column 3. Any other expenses associated with the 

production contract and not paid by the cattle owner (contractor) would be reported 

in Section I, Column 1. 
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Column 1 – Commodity Contracted Out 

Record the type of commodity that was placed on another operation to be fed or 

raised. Include commodities that were placed on contractee operations prior to Jan 

1 and were still under contract on January 1 of the reference year.

Column 2 – Livestock Code

Record the livestock code from the Respondent Booklet that relates to the 

commodity identified in Column 1. 

Column 3 – Market Value of Commodities under Contract on January 1

Record the estimated market value of all of this operation's commodities under 

contract as of January 1.

Make sure this value is not recorded in Section J, “Farm Assets”.

Column 4 – Estimated Market Value of Commodities Placed

Using the market price at the time the commodity was placed, record the estimated 

value of the contracted commodities this operation placed on contractee operations 

during the reference year. If more than one arrangement existed, or if arrangements 

existed for more than one commodity, record each one on a separate line.

Column 5 – Production Expenses and Fees Paid to Contractees

Record the total amount this operation paid to contractees for labor fees, 

management fees, and reimbursements for expenses. 

Make sure this value is not recorded in Section I. Section I is used to record 

expenses incurred on the respondent’s operation.

Column 6 – Gross Receipts from Contracts

Record the gross income to this operation from sales of commodities produced 

under this contract by other operations (quantity times market price) during the 

reference year. 

This item will be zero for dairy replacement heifers that are removed back to the 

respondent’s (contractor’s) operation.

Make sure this value is not recorded anywhere else in Sections C or E.

Column 7 – Market Value of Items Under Contract on December 31

Record the estimated market value of commodities still under contract as of 

December 31.

Make sure this value is not recorded in Section J, “Farm Assets”.
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5.6 Sections E & F – Marketing & Production Contracts

5.6.1 Overview

Importance of Obtaining Information on Marketing and Production Contracts

The contracting information collected on this survey is USDA’s only source of data to 

separate production, income, and expenses among operators, contractors, landlords 

and others. To show an accurate picture of both the value of the farm sector’s output 

and the financial condition of farming operations, we must fully account for other 

businesses that provide inputs used on the farm to produce agricultural commodities 

and who receive income from the sales of these products. For these reasons, 

collecting complete and accurate information on contracting is critical.

Previous ARMS surveys show widespread and growing use of production and 

marketing contracts. As contractees, producers sometimes use contracts because 

they can be designed to reduce price risks, and they sometimes use them to reduce 

input financing requirements. As contractors, processor-buyers often use contracts 

to obtain consistent supplies of commodities with specific desired qualities. 

If the operator has multiple operations, only account for the income that belongs to 

the operation identified on the label. For operators with multiple operations, keep in 

mind the acres and livestock reported in the previous sections because they define 

the selected operation and answers should relate directly to that operation. Income 

from the other operations is accounted for in Section N.

Terms – Contractor versus Contractee

The respondent is a CONTRACTOR when another operation produces crops, 

livestock, or poultry under agreement for the respondent. If the respondent is a 

contractor, you should record that information in Section D.

The respondent is a CONTRACTEE when he/she produces and/or markets the 

commodity under a contractual agreement with another farm operation or entity such 

as a packer or processor. That information is recorded in Section E or F, as 

Marketing Contracts and/or Production Contracts.

An operation may act as the CONTRACTEE or CONTRACTOR or both.

For hog and cattle operations, pay close attention to pricing terms and animal 

ownership (owned and non-owned animals in Section C) under contracts because 

both marketing and production contracts are common. Non-owner animals are a 

strong clue for the presence of a production contract.

Details of Marketing and Production Contracts

Contracts are formal agreements (written and verbal) that are reached prior to the 

harvest of a crop, or prior to the completion of a normal production cycle for livestock 
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or poultry. Verbal agreements are contracts if they contain a commitment to provide 

inputs or commodities such that failure to meet the commitment will incur penalties.

For purposes of this survey, we only want to count contracts as those agreements 

reached before crop harvest or before completion of a livestock production phase. 

All sales made from inventory should be considered cash sales and reported in their 

respective commodity section (Sections B & C, column 5). A contract that has not 

been delivered should not be recorded as a marketing or production contract since 

technically, the operator still has the control of the commodity. When this occurs the 

commodity is an asset to the farm and should be recorded in Section J Item 3.

Marketing pools occur in some States where a group of producers will combine or 

“pool” their crop or livestock commodities for sale and delivery to a buyer to save on 

hauling expenses and/or marketing charges. If the pool agreement occurred after 

harvest or completion of the livestock production, this should be considered a cash 

sale and reported in its respective commodity section.

The ARMS recognizes two kinds of agricultural contracts:

1) Marketing contracts identify an outlet for a commodity and set pricing and 

delivery specifications. In a marketing contract, the operator (contractee) 

assumes most of the financial risk. Although marketing contracts are more 

common for crops, they are used to market livestock and/or livestock 

products. Marketing contracts account for a growing share of fed cattle 

shipments from feedlots to meatpackers. Record custom-fed cattle, owned 

by someone other than the respondent, under production contracts.

2) Production contracts cover an entire production cycle for a commodity. 

They specify responsibilities for the provision of inputs and the payment of 

expenses by different parties to the contract, and they also specify rules for 

compensation, production practices, and commodity removal from the 

operation. In a production contract, the contractor assumes most of the 

financial risk.

Contracts can take on many different forms. The accompanying table provides an 

overview of contract features, and lists how we want to distinguish between 

marketing contracts and production contracts for the purposes of this survey.

Marketing Contracts Production Contracts

Contractor: Contractor (Integrator):

 Arranges, prior to completion of a 

production cycle, to acquire a specified 

commodity at the end of the cycle.

 Arranges, prior to beginning a production 

cycle, to have a specified commodity 

produced.

 Commits to take a quantity and agrees 

on a price, a pricing arrangement, or an 

agreement to sell on behalf of the 

contractee.

 Commits to a fee or fee arrangement to 

be paid to the contractee.

 Does not take ownership of the 

commodity until it is delivered.

 Usually owns the commodity during 

production.
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 Makes few or no production decisions 

but may require specific inputs (variety of 

seed, etc.) to be used.

 Makes many production decisions.

Contractee (Operator): Contractee (Operator):

 Obtains a buyer and a marketing 

arrangement for commodities before 

completion of a production cycle.

 Provides labor and some management 

services used in production, as well as 

fixed inputs (land, buildings, etc), for a 

fee.

 Supplies and finances all or most of the 

inputs used in production.

 Supplies only some inputs used in 

production.

 Owns the commodity while it is being 

produced.

 Usually does not own the commodity.

 Makes all or most production decisions.  Makes only a few production decisions.

 Often bears all production risks, and 

contract frequently limits some price 

risks.

 Often bears no price risks, and contract 

may limit production risks or reward 

efficiency.

 Receives the major share of the value of 

production.

 Receives a fee that is usually only a 

small share of value of production.

MARKETING Contracts:

For the purpose of this survey, a marketing contract for a commodity is recorded

when the following two events occur:

 A verbal or written agreement to market the commodity is reached before

completion of a normal production cycle (prior to harvest for crops, prior to 

removal from the operation for livestock). The agreement will include a price, 

an arrangement for determining price, or (in the case of marketing pools or 

some operating cooperatives) a commitment by the contractor to negotiate 

for a price on the contractee’s behalf.

 Delivery of the commodity has taken place so that the operator does not have 

control of the commodity. “Delivered” includes commodities for which partial 

payment was made even if not physically delivered by December 31.

Characteristics of marketing contracts:

 Attribute-related price terms are often expressed as deviations from a base 

price tied to overall market conditions (incentives) and often set prices 

according or require delivery of commodities with certain measurable 

qualities. Examples include high oil corn, low linoleic soybeans, or organic 

apples.

 Prices often vary with the attributes of the commodity produced, as in grade 

and yield contracts for cattle or oil content for high-oil corn contracts that 

reward the contractee for higher oil content.

Marketing contracts may include:

 forward sales of livestock or a growing crop (or a crop to be grown). The 

contract identifies a window, or a specific date, for delivery, and it will set a 
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price or specify how price will be determined. 

 agreements made with processors to deliver commodities with certain 

measurable qualities

 agreements to set prices according to realization of the qualities. Examples 

include high oil corn, low linoleic soybeans, or organic apples

 milk contracts to market milk for the coming year through a co-op with prices 

determined later through a pricing formula that is applied 30 days after 

delivery of the milk. (Perishable products are usually priced after delivery.)

 a marketing pool. Farmers may agree to pool their crop and sell along with 

other producers through a cooperative or other pooling firm. The final price 

received is determined by the net pool receipts for the quantity sold (by 

selling a larger amount the pool may get a better price). Farmers may have 

to wait a year or more to receive final payment and decisions related to 

selling are made by the pool manager. Pooling is common in rice and cotton 

marketing.

Marketing contracts are typical on farms that:

 grow citrus fruits, other fruits, or nuts

 grow ornamentals or horticultural crops

 produce fresh vegetables

 grow potatoes

 grow sugar beets, sugarcane, peanuts, dry peas or dry beans

 produce fluid milk

 produce eggs

 sell fed cattle directly to slaughter or meatpackers

PRODUCTION Contracts:

Production contracts are used for livestock, poultry and crop production. Under 

poultry or livestock production contracts, the farm/ranch operator (for example, a 

feedlot or broiler grower) houses and feeds the poultry or livestock until they reach a 

specified age or weight. The contractor usually provides many production inputs and 

reimburses the contractee for input expenses incurred while the commodity is on the 

contractee’s operation. For example, in broiler contracts, the contractor normally 

provides chicks, feed, chemicals, transportation, and technical assistance. The 

contractor may also reimburse the contractee for LP gas used, bedding, etc.

Under crop production contracts the contractor often supplies inputs such as seeds 

or plants, fertilizer, chemicals, transportation and technical assistance. Examples 

include processed green peas, sweet corn, and snap beans; seed corn; vegetable 

seeds; popcorn; and beets.

Characteristics of Production Contracts:

The contractee and contractor reach agreement before production begins, and 

the contract provides considerable detail on specifics such as fees, responsibility 

for input provision, and product ownership. Contractees may provide labor, farm 
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management services, utilities, housing, and equipment. Contractees usually 

receive fees for their services that are considerably less than the full market 

value of the commodity and are reimbursed for covered expenses. 

Strong clues to the presence of a production contract (even if not reported) is 

non-owned livestock that are recorded in Section C, Item 2, and little or no 

livestock sales dollars reported. Contract fees may be reported as custom work 

income. The operator may also report livestock or poultry facilities and/or 

livestock production expenses, with few or no livestock owned. The non-owned 

animals are almost certainly being produced under contract.

Production contracts are typical on farms that:

 have broiler houses or other poultry and/or egg producing facilities

 have hog nursery or confinement feed arrangements

 provide ‘custom-feeding’ services for cattle

 produce vegetables for processing

 produce seed crops

5.6.1.1 Special Topics

Feedlot Operations:

Cattle in feedlots may be owned by the feedlot operator, or they may be custom-fed 

by the feedlot for an owner, under a production contract between the feedlot (the 

contractee) and the owner (the contractor). Feedlot respondents should record 

production contracts in Section F for the “custom fed” cattle that they feed under 

production contracts. Contractee fees should include only overhead (farm 

management services, utilities, housing, and equipment), labor, and margin on pass 

through input items. Expenses paid or reimbursed by the owner (contractor) to the 

feedlot should be reported in Section I in the “contractor” column. Fed cattle are also 

often sold to meatpackers under marketing contracts. Here are the specifics for 

recording transactions:

 Respondents who own cattle that are custom fed at a feedlot, returned to the 

respondent, then sold to a packer through a marketing contract should record 

the Marketing Contract in Section E, and should record the Production 

Contract with a feedlot in Section D (in their capacity as a contractor).

 Respondents who own cattle that are custom fed at a feedlot, then sold to a 

packer directly from the feedlot through a marketing contract should record 

the sale in Section D, Column 6. They should also record the rest of the 

production contract with a feedlot in Section D (in their capacity as a 

contractor).

 Feedlot respondents should only record marketing contract sales in Section E

for those cattle that the feedlot owns, not for custom fed cattle owned by 

another entity. One should be skeptical of a respondent that has non-owned 

cattle on the operation and wants to record a large value for custom work 

performed. This usually indicates that a production contract should be 

completed. Do not confront the operator but collect information as instructed 

by the office and take good notes.
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 If a feedlot grows any crop that was fed to non-owned livestock as part of a 

production contract with the livestock owner, do not record the production as 

used on the operation in Section B. This production should be recorded as a 

cash sale to the livestock owner and the same value for the crop sold should 

be recorded as a contractor expense in Section I, Item 6.Verify that the 

production contract fees do not include payments to the feedlot for feed 

costs.

Livestock on Shares:

The production of livestock, primarily cattle, “on shares” is common in Montana, 

North and South Dakota, Nebraska, and other states. For example, an individual 

who owns beef cows places them on someone else’s land. The land operator cares 

for the cows and calf crop. The cattle owner and land operator share the calf crop in 

a 50-50, 60-40, 70-30, or other agreed to arrangement. Instructions and a detailed 

example are provided in Section 5.6.3.1.

Contractee is Part of another Business:

An operation such as an egg hatchery may be owned by the business it contracts 

with. In this case, unit fees/prices and total receipts will not be available since no 

market transaction takes place. In most cases the operation will have recorded a 

“book value” for the commodity it produced. Use the book value if available, to 

record unit price/fee and total receipts for Section F.

Reimbursement for Expenses in Production Contracts:

Contractees in production contracts sometimes purchase some variable inputs, and 

reimbursement for their expenses is added to the amount paid for contractee 

services. Settlement sheets or other contract documents usually break out 

reimbursed expenses. Since we want to collect data on reimbursed expenses 

separately, they should be included in Section I, Column 3 under the appropriate 

item.

Futures Contracts Obtained for the Purpose of Hedging:

Such contracts should not be reported as marketing contracts. Hedging occurs 

when the farmer takes opposite positions in the futures and cash markets. It allows 

farm operators to fix now the price of products they intend to sell later. For example, 

farmers who are growing a commodity for sale are said to be "long" in the cash 

market. The appropriate hedge is to sell futures. Then, when the farmer sells his 

commodity, he buys back his futures contract, preserving a price. This type of 

transaction should be recorded in two places. The actual sale of the commodity 

should be recorded in Sections B, under the appropriate sales commodity in Column 

5. The net profit or loss from hedging should be recorded in Section H, Item 3j as “all 

other farm related sources of income”.

Dairy Futures Contracts:
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It is easy to confuse milk marketing contracts with a futures contract as described 

above. An indication of futures hedges is when more than two marketing contracts 

exist for milk production. (A producer almost never sells to more than two milk 

buyers.) Futures contracts are NOT marketing contracts. They should be recorded 

like the crop hedges mentioned above. The sale of the commodity (milk) should be 

recorded as a marketing contract in Section E or a cash sale in Section C. Any profit

or loss from these futures contracts are recorded in Section H, Item 3j as “all other 

farm related sources of income”.

Grain Delivered With High Moisture:

There may be seasons, where a number of operators will deliver grains that exceed 

the moisture standard for that commodity. The amount operations are paid are 

affected by two different methods: Shrink and Dock (an additional fee for drying). 

They are handled differently when it comes to prices/amount received as well as 

marketing charges.

Shrink:

Some elevators apply a percentage reduction to gross weight delivered. This is 

essentially adjusting the load of the commodity down to what it would weigh at 

standard moisture. For example, Joe Farmer brought in a semi-load of corn with 

a weight of 33,000 pounds, at 17 percent moisture. The elevator would “shrink” 

the weight and Joe Farmer would be paid on 32,340 pounds of corn at 15 

percent moisture. Shrink is NOT a marketing charge. For marketing contracts, 

record the shrunk bushels (standard moisture) as delivered and the price per 

delivered bushel. This should be consistent with other NASS surveys.

Dock (additional fee for drying):

If an elevator charges a fee per bushel for drying, it is a marketing charge and is 

known as a “dock”. Record the total amount docked (or paid for the extra drying) 

as a marketing charge and make sure that price per bushel and total amount 

received exclude the marketing charges as instructed on the questionnaire. 

Inferior Quality Grain Delivered:

If the operator gets a reduction in pay for inferior quality grain being delivered, it is 

NOT a marketing charge. Inferior grain contains things like mold, weevils, foreign 

matter, etc. The grain can still be marketed despite being inferior quality unlike if the 

grain had too high of moisture content. Record bushels delivered and the delivered 

price.

5.6.2 Section E – Marketing Contracts

Item 1 – Presence of Marketing Contracts

If the operator had any marketing contracts (as defined above), check “Yes” and 

continue. Exclude CSA sales because contract sales are for one specific crop 

guaranteeing a price or pricing mechanism at the time of delivery. CSA sales are 

considered a cash sale of multiple products.
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Item 2 – MARKETING Contracts

Include contracts made in prior years but delivered in the reference year. Make sure 

the contract meets the definition of a contract above. “Delivery” includes 

commodities for which partial payment was made even if not physically delivered by 

December 31.

Exclude arrangements where a price formula or price was set prior to the completion 

of a normal production cycle but delivery has NOT occurred.

Column 1 – Commodity

Show the respondent the list of Crop and/or Livestock Codes in the Respondent 

Booklet. Record each commodity for which the operation delivered a set quantity 

marketing contract in the reference year. 

Column 2 – Commodity Code

Record the commodity code that relates to the commodity identified in Column 1. 

Column 3 – Quantity Delivered

Record the total amount of the commodity delivered under the contract. Do not 

include the landlord's share of production even if it was delivered along with the 

operation’s share. 

Column 4 – Unit Code

Record the code that represents the commodity unit (specified in the contract), 

such as pounds, tons, bushels, head, etc. If a unit other than those indicated on 

the questionnaire is reported, make good notes. Be careful with the units 

because many analysis’ issues later are caused by conflicts between data here 

and in the previous crop section.

Column 5 – Price per Unit

Record the final price, net of marketing charges, in dollars and cents (to the 

nearest cent [. __ __ ]) per unit, that the operation has or will receive for all of the 

production delivered under the contract. For commodities that receive payments 

monthly such as milk, the final price will be an average price calculated from the 

quantity and price received for each month covered by the contract. Final price 

is not the last month’s price received for the year (e.g. December). The 

respondent may have to estimate this price.

Column 6 divided by Column 3 will equal Column 5 ONLY when the operation 

was paid in full during the reference year for the commodity delivered under the 

contract. Use caution if you calculate final price by dividing Column 6 by Column 

3. Make sure the operation received full payment during the calendar year for 

the contact.
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Be sure the unit for the price reported agrees with the unit for the quantity 

reported. Cotton is an example. A common mistake is to record cotton sales in 

bales, but price as a price per pound. Consider an example where a single bale 

was contracted at 65 cents per pound. If you recorded “1” in Column 3, Code 7 

(for bales) in Column 4 and .65 in Column 5, the gross income to the operation 

would show up as 65 cents. Assuming a standard bale weight of 480 pounds, 

you came up short by $311.35 (the price per BALE is 480 x .65 = $312)!

Column 6 – Total Amount Received

Since total payments are not always received in the calendar year of production, 

you always have to ask this question in order to complete this Column correctly. 

Record the total amount the operation received during the calendar year for 

sales under the marketing contract.

For some commodities, this is always less than the quantity delivered times the 

per unit price, because price is not known until the commodity is fully marketed 

by the agent the following year. Sometimes the producer is not paid at all until 

after the first of the next year. If the operation did not receive any payment under 

the contract in the reference year, enter a dash and make a note.

Be sure any marketing charges related to sales under the contract are subtracted 

out and recorded in Section I, Item 33. If the operation did not receive all of the 

payments owed to them under the contract in 2015 (Column 6 is less than 

Column 3 times Column 5), the remaining amount owed must be accounted for 

as an asset in accounts receivable in Section G, Item 1b.

The following two tables can be used as a guide to help record Marketing Contracts, 

Cash Sales, Assets, Accounts Receivables, and Deferred Payments. This table is 

courtesy of the Nebraska Field Office.

2014 Crop:

Situation Record As:

In Storage

At End of 2014 ASSET (January 1, 2015)

Sold 2014 Stored Crop on Open Market during 

2015 CASH SALES

Sold for Cash

Delivered in 2014 & NO Pmt Rcvd in 2014 Acct Rec / Def Pmts (January 1, 2015)

Set Up as Marketing Contract

Delivered in 2014 & NO Pmt Rcvd in 2014 Acct Rec / Def Pmts (January 1, 2015)

For Delivery in 2015 and Pmt in 2015

ASSET (January 1, 2015) AND In Marketing 

Contract Table
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2015 Crop:

Situation Record As:

Sold for Cash

Delivered in 2015 & Pmt Rcvd in 2015 CASH SALES

Delivered in 2015 but NO Pmt Rcvd 

in 2015 Acct Rec / Def Pmts (Dec. 31, 2015)

Set Up as Marketing Contract

Delivered in 2015 & Pmt Rcvd in 2015 Marketing Contract Table

Delivered in 2015 but NO Pmt Rcvd in 2015 Column 6 Blank in Marketing Contract Table 

AND Acct Rec / Def Pmts Positive 

(December 31, 2015)

NOT Delivered in 2015 but Pmt Rcvd 

in 2014 Marketing Contract Table

NOT Delivered in 2015 & NO Pmt Rcvd 

in 2015 ASSET (December 31, 2015)

For Delivery in 2015 & Pmt in 2016 ASSET (December 31, 2015)

In Storage

At End of 2015 ASSET (December 31, 2015)

5.6.3 Section F – Production Contracts

Item 1 – Presence of Production Contracts

If the operator had any production contracts (as defined above), check “Yes” and 

continue.

Item 2 – Production Contracts 

Column 1 – Commodity 

Show the respondent the list of commodity codes in the Respondent Booklet. 

Record each commodity the operation produced under a production contract in 

the reference year.

Column 2 – Commodity Code

Record the commodity code that relates to the commodity identified in Column 1. 

Column 3 – Quantity Removed

Record the total amount of the commodity removed from the operation under the 

contract. Do not include the landlord's share of production even if it was 

removed along with the operation's share. 
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Column 4 – Unit Code

Record the code that represents the commodity unit (specified in the contract), 

such as pounds, tons, bushels, head, etc. If a unit other than those indicated on 

the questionnaire is reported, make good notes.

Column 5 – Fee per Unit

Record the final fee in dollars and cents per unit (to the nearest cent [. __ __ ]), 

that the operation will receive for all of the production removed under the 

contract. DO NOT use Columns 6 and 3 to estimate a final fee. Column 6 

divided by Column 3 will equal Column 5 ONLY when the operation was paid in 

full during the reference year for the commodity removed under the contract. 

The fee should not include reimbursed expenses like utilities, feed, etc. These 

reimbursed expenses should be recorded as contractor expenses in Section I.

Be sure the reported fee per unit agrees with the unit for the quantity reported.

Broilers are an example where the units for fees and quantities often do not 

agree. A common mistake is to record broiler removals in number of head, but 

fees on a per-pound basis. Consider an example where one broiler was 

contracted at a fee of 4.6 cents per pound. If you recorded “1” in Column 3, 

Code 11 (for head) in Column 4 and 4 cents in Column 5, the gross income to 

the operation would show up as 4 cents. Assuming a standard broiler weight of 5 

pounds, you came up short by 16 cents (the fee per head is 5 x .04 = $0.20)!

Any bonus received should be included in the Total Fee received column. The 

bonus should then be divided out per unit and included in the price per unit. For 

example, if a $1,000 bonus was paid to the operator and 100,000 hogs were 

removed, then an extra $1,000 should be included in the total fee received and 

an additional $0.01 per unit should be added to the final fee received per unit.

Column 6 – Total Fees Received

Since total payments are not always received in the calendar year of production, 

you always have to ask this question in order to complete this column correctly. 

Record the total amount the operation received during the calendar year for 

removals under the production contract excluding marketing charges. This can 

be less than the quantity removed under contract times the per unit fee. 

Sometimes the producer is not paid at all until after the first of the next year. If 

the operation did not receive any payment under the contract in the reference 

year, enter a dash and make a note. If the operation did not receive all of the 

payments owed to them under the contract in the reference year (Column 6 is 

less than Column 3 times Column 5), the remaining amount owed must be 

accounted for as an asset in accounts receivable in Section G, Item 1b.
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5.6.3.1 Specialty Operations: Examples of Livestock on Shares

The parties involved with livestock on shares usually do not consider these 

arrangements to be contracts. The following approach simplifies collecting, editing, 

coding, and validating livestock on share arrangements, while maintaining the integrity of 

the cost and returns data.

The following is an example of a ‘common’ livestock on shares arrangement. After the 

scenario are examples of how the data should be coded, from both the cattle owner and 

the land operator perspective.

LIVESTOCK ON SHARES EXAMPLE:

A cattle owner has a deal with a land operator to raise calves on shares. The cattle 

owner supplies 100 head of cows. The land operator takes care of the cows and 

provides all necessary inputs. They agree the land operator will receive 70% of the 

calf crop and the owner of the cattle will receive 30%. For purposes of this example, 

there are 100 calves produced, therefore, the land owner’s share is 70 calves and 

the cattle owner’s share is 30 calves. The land operator decides to keep 5 of his 

calves and sells the rest for $500 each. The cattle owner sells all of his calves and 

averages $500 / head.

Coding for the LAND OPERATOR:

If the land operator was sampled (the most common situation), the information 

would be recorded as follows:

Section C – Livestock

Record the 5 head of calves he kept in Item 2c, column 2 as well as column 3

(since they are owned by the operation). Record the 65 calves that were sold 

by the landowner in Column 4. If the original cows were still on his place at 

the end of the year, record 100 head in Item 2a, column 2 but not column 3.

Account for the cash sale of the calves in Item 5d(i) as $32,500 (65 head * 

$500 / head).

Section I – Operating & Capital Expenditures

Account for the expenses paid by the land operator for caring for all the cows 

and raising all the calves.

Section J – Farm Assets

Account for the value of the 5 calves the land operator kept in Item 2c. Do 

not account for the value of the cows because he does not own them.
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Coding for the CATTLE OWNER:

If the cattle owner was sampled, the information would be recorded as follows:

Section C – Livestock

None of the ‘livestock on shares’ should be included in this section unless the 

cows are back on this operation on December 31. The cows will be 

accounted for on the land operators’ questionnaire.

Account for the cash sale of the calves in Item 5d(i) as $15,000 (30 head * 

$500 / head).

Section I – Operating & Capital Expenditures

The cattle owner did not have any expenses for the cattle on shares in this 

example. Any expenses the operator had would be recorded if they 

occurred. For example, if special bulls were used for breeding, any breeding 

or semen expenses would be recorded.

Section J – Farm Assets

Account for the asset value of the original 100 cows in Item 3b.
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5.7 Section G—Accounts Receivable & Deferred Payments

Item 1 – Accounts Receivable & Deferred Payments

Item 1 accounts for deferred payments, records money received in the reference 

year for sales that occurred in earlier years, and tracks the accounts receivable –

balances owed to the operation at the beginning and end of the reference year. 

Farm operations frequently do not receive cash payment for services provided or 

commodities sold in the same calendar year in which the sale occurred. Such 

deferrals are often requested by operators to smooth out cash income as an income 

tax management strategy. Sometimes deferrals are necessary because price is not 

final until the next calendar year. In order to determine the income that was actually 

earned in a given year (accrual income), adjustments must be made for the timing of 

the receipt of payments.

Three pieces of information are needed to accurately compute net farm income, net 

cash income, the income statement and balance sheet of the farm operation: 

1) the amount the operation was owed at the beginning of the year for crops or 

livestock sold and delivered before January 1

2) how much of that amount was received during the year

3) the amount the operation was owed for crops or livestock produced in the 

reference year or earlier for which full payment was not received in the 

reference year

Exclude: Marketing Charges and money received as reimbursement for expenses.

Item 1a – Payment Owed at Beginning of Year (BOY)

Record the amount owed to this operation at the beginning of the reference year

for commodities sold and delivered/removed on either cash markets or under a 

marketing/production contract in any year prior to the reference year.

Item 1a(i) – Money Received in the reference year for Prior Production

Record the dollar amount received during the reference year from the amount 

recorded in Item 1a above. Verify that these deferred receipts are NOT 

included in Marketing Contracts (Section E), Production Contracts (Section 

F), or Cash Sales (Sections B & C) recorded on this year’s questionnaire. 

This amount should be equal to or less than Item 1a.

Item 1b – Payment Owed at End of Year (EOY)

Record the amount owed to this operation at the end of the reference year for 

commodities sold and delivered / removed on either cash markets or under a 

marketing / production contract in the reference year or any prior year.

This amount should include both:
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 Any amounts that the operation was owed for crops or livestock sold and 

delivered in the reference year for which the operation has not received 

payment. This can be computed for each commodity under marketing 

(Section E) and production (Section F) contracts by going back to those 

items, multiplying column 3 by column 5 and then subtracting column 6. 

There is no way to compute this for commodities sold in cash or open market 

sales.

 Any amount the operation is owed for crops or livestock sold and delivered in 

previous years where the payment was not received in the current year. This 

is simply the difference between Items 1a and 1a(i).
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5.8 Section H—Government Payments & Other Farm Related Income

A farm operation’s gross income includes payments received from the production and 

sale of crop and livestock commodities, but it can also include payments received 

through government agricultural programs as well as payments from ancillary activities

that are part of the farm business, such as custom work provided to other farmers; 

recreation and Agritourism activities on the farm; sales of forest products, farm 

machinery, or farm land; insurance payments; cooperative patronage dividends; or sales 

of goods processed on the farm from farm commodities. This section is intended to 

track that other farm-related income.

If the operator has multiple operations, only account for the income that belongs to the 

operation identified on the label. For operators with multiple operations, keep in mind 

the acres and livestock reported in previous sections for the selected operation. Income 

from the other operations is accounted for in Section N.

5.8.1 Item 1: Commodity Credit Corporation (CCC) Loans

The Commodity Credit Corporation (CCC) was created in 1933 to help stabilize and 

support farm prices and income. These questions account for the operation’s entire 

CCC loan transactions during the reference year, allowing us to get a complete 

accounting of the farm’s income. If the operation received or repaid any CCC loans, 

check “Yes” and answer Items 1a and 1b. If the operation did NOT receive or repay any 

CCC loans, check “No” and skip to Item 2.

Farmers can pledge feed grains, corn, wheat, soybeans, cotton and rice as collateral to 

get a CCC non-recourse commodity loan. Record how much they received in Item 1a. 

The loans they get are based on a per unit support price (loan rate) established by law 

for their particular county and commodity. 

Loans mature on demand but no later than the last day of the ninth calendar month 

following the month the loan was made. Any time before the final maturity date of the 

loan, the farmer may repay the loan amount plus any interest that has accrued. If the 

loan is not repaid by the final loan maturity date, the CCC takes title to the commodity as 

full payment of the loan and interest charges.

Farmers can reclaim title to their crops by paying back the loans along with any interest 

and storage charges. They usually do this when the market price is higher than the loan 

redemption price. The amount spent to repay the loan (minus any interest and storage 

charges) is recorded in Item 1b. Interest is recorded in Section I, Item 18b; storage and 

inspection charges are marketing charges recorded in Section I, Item 33. When a 

farmer reclaims title to the commodity, he/she can then either sell it or store it for future 

use.

Loans not paid by the maturity date are considered forfeited. Farmers usually do this 

when the market price is less than the loan redemption price. 

Farmers who have placed a crop under loan can transfer the loan to someone else. 

When they do this, they are no longer responsible for loan repayment. (This cannot be 

done in all areas of the country.) If the farmer did this, any money received above the 
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face value of the loan (equity or premium payment) should be recorded later in Section

H under, “all other farm related sources of income” Item 3j.

5.8.2 Item 2—Federal, State, or Local Farm Program Payments

If the respondent received any payments from Federal, State or Local Farm Programs 

(excluding CCC loan payments), then check “Yes”, and ask Item 2a. It is not imperative 

that the enumerator fully understand the nuances of all program payments since the 

respondent should know the source of any payments received. If he/she did not receive 

any of these payments, then check “No” and skip to Item 3.

Item 2a – Upland Cotton Transition Payments

The Cotton Transition Assistance Program (CTAP) was authorized by the Agricultural 

Act of 2014 (the 2014 Farm Bill). CTAP is a transition program between the previous 

Direct and Counter-cyclical Payments Program (DCP) and the new Stacked Income 

Protection Plan (STAX).

For the 2014 and 2015 crop years, CTAP is based on a farm’s 2013 adjusted cotton 

base acres effective under the 2008 Farm Bill, as of September 30, 2013. For the 2015 

crop year, it will be only offered to eligible producers in counties where the new Stacked 

Income Protection Plan (STAX) is unavailable. To be CTAP eligible, owners, operators, 

landlords, tenants, and sharecroppers must sign form CCC-957. Under CTAP, there is 

no requirement that producers plant cotton in order to be eligible for payment; however 

eligible producers must have adequate share in enough cropland acres to cover their 

claimed interest in cotton base acres on form CCC-957.

CTAP payments in each of the 2014 and 2015 program years are limited to $40,000 per 

person or entity including amounts received directly and indirectly through entities. 

CTAP applications approved before Oct. 1, 2014 are subject to congressionally 

mandated automatic reduction of 7.2 percent for the 2014 crop year. Applications 

approved after October 1, 2014 will be reduced the required 7.3 percent for the 2015 

crop year. Persons or legal entities whose 3-tax year average adjusted gross income 

exceeds $900,000 are not eligible for CTAP payments.

CTAP payments for crop year 2014 will be issued to cotton producers satisfying all 

program and payment eligibility requirements on or after October 1, 2014. CTAP 

payments for crop year 2015 will be issued to eligible cotton producers on October 1, 

2015.

Record the amount of whole dollars received during calendar year 2015 from the Cotton 

Transition Assistance Program (CTAP) in Item 2a. If eligible CTAP payments paid for 

2015 have been delayed until 2016, this should be recorded under Accounts Receivable 

and Deferred Payments, Section G, Item 1b.

DCP, ACRE, LDP, and MLGs programs have ended. Any residual 2014 payments that 

are recorded should be small.

Item 2b – DCP & ACRE Payments

Record the total dollar amount of Direct Counter-cyclical Payments (DCP) and Average 

Crop Revenue Election (ACRE) payments received in 2015.
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The Direct and Counter - cyclical Payment Program (DCP) and the Average Crop 

Revenue Election (ACRE) program provide payments to eligible producers who enroll. 

There are two types of DCP payments - direct payments and counter-cyclical payments. 

Both are calculated using the base acres and payment yields established for the farm. 

The optional ACRE Program is an alternative revenue-based safety net to the pricebased safety net provided by counter-cyclical payments. The ACRE Program involves 

state and farm revenue changes from guarantee revenue levels that are based on 

national prices, state planted yields, and farm planted yields.

Item 2c – LDPs & MLGs

Record the total amount received from Loan Deficiency Payments and realized from 

Marketing Loan Gains.

Loan Deficiency Payments (LDPs)

Loan Deficiency Payments (LDPs) are payments made to producers who are eligible to 

obtain a marketing assistance loan on a loan commodity, but agree to forgo obtaining 

the loan for the commodity in return for Loan Deficiency Payments. Loan commodities 

include wheat, rice, corn, sorghum, barley, oats, upland cotton, soybeans, other 

oilseeds, dry peas, lentils, small chickpeas, graded wool, non-graded wool, mohair, and 

honey.

Non-graded wool in the form of unshorn pelts and hay and silage derived from a loan 

commodity are not eligible for marketing assistance loans. However, they may be 

eligible for loan deficiency payments.

Marketing Loan Gains (MLGs)

Commodity marketing assistance loans, with repayment provisions, are available for 

wheat, rice, corn, sorghum, barley, oats, upland cotton soybeans, other oilseeds, small 

chickpeas, lentils, dry peas, wool, mohair and honey. Market loan repayment provisions 

are in effect when the alternative repayment rate, as determined by CCC, is less than 

the per-unit principal plus accrued interest, other charges, and in the case of upland 

cotton only, per-unit storage costs, for a given outstanding loan. Then, farmers are 

allowed to repay commodity loans at the repayment rate. Each day, other than 

weekends and holidays, CCC calculates and posts loan repayment rates, except for rice, 

upland cotton, other oilseeds, small chickpeas, lentils, dry peas, and peanuts, which are 

posted weekly. The portion of the principal, if any that is waived when a loan is repaid is 

referred to as a marketing loan gain for the producer.

Item 2d – Conservation Program Acres and Payments

Record the total number of acres the operation has enrolled in the following conservation 

programs. Record the total amount of payments received from participation in the 

following conservation programs. Include annual rental, stewardship, enhancement, 

cost share, and incentive payments.

Conservation Reserve Program (CRP):

The CRP is a long term (10-15 year) cropland retirement program that provides 

incentives and assistance to farmers and ranchers for establishing valuable conservation 

practices that have a beneficial impact on resources both on and off the farm. CRP is 

administered by NRCS. It encourages farmers to voluntarily plant permanent covers of 

grass and trees on land that is subject to erosion, where vegetation can improve water 
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quality or provide food and habitat for wildlife. The CRP is the Federal government's 

single largest environmental improvement program. Include CREP acres and amounts 

(program defined below).

Conservation Reserve Enhancement Program (CREP):

The Conservation Reserve Enhancement Program (CREP) is a voluntary land 

retirement program that helps agricultural producers protect environmentally sensitive 

land, decrease erosion, restore wildlife habitat, and safeguard ground and surface water. 

CREP is administered by NRCS and other cooperating agencies. The program is a 

partnership among producers; Tribal, State, and Federal governments and, in some 

cases, private groups. 

CREP is an offshoot of the country's largest private-lands environmental improvement 

program - the Conservation Reserve Program (CRP). See above for more detail on the 

Conservation Reserve Program.

Environmental Quality Incentive Program (EQIP):

The Environmental Quality Incentives Program (EQIP) offers financial and technical help 

to assist eligible participants install or implement structural and management practices 

on eligible agricultural land. EQIP is administered by NRCS. EQIP contracts provide 

incentive payments and cost-shares to implement conservation practices. The minimum 

contract term ends one year after the implementation of the last scheduled practices and 

a maximum term of ten years. Payments may not be received in every year that a 

contract is in force.

Record the total acres that were subject to conservation treatments under current 

contracts funded through the EQIP.

Include:

1) Acreage of fields/tracts where practices are applied (such as reduced tillage, 

terraces, and grassed waterways). For example, if a 1 acre grassed waterway 

drains storm water from 10 adjacent acres, include 10 acres. 

2) Acreage of fields/tracts that are adjacent to field edge practices (such as filter strips, 

riparian buffers, or fences). For example, if a 1 acre filter strip captures nutrient 

runoff from a 20 acre field, include 20 acres. In another example, if fencing is 

installed to restrict access to 15 acres of sensitive habitat, or to establish a grazing 

boundary around 15 acres, include 15 acres.

The number of acres reported here may exceed total acres reported in Section A, if 

conservation treatments involve land not operated by the producer.

Note: EQIP contracts do not always provide a payment in every year of current 

contracts.
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Conservation Stewardship Program (CSP):

CSP (or CStP) is a voluntary program that provides financial and technical assistance to 

(1) reward good stewardship of agricultural resources and the environment and (2) 

promote further improvement (enhancement) of soil, water, air, energy, plant and animal 

life, and other conservation purposes on working agricultural lands. Both programs are 

administered by NRCS. Contracts can be 5-10 years in length. The Conservation 

Stewardship Program replaced the Conservation Security Program in 2008.

Conservation Security Program (CSP):

CSP is a voluntary program that provides financial and technical assistance to (1) 

reward good stewardship of agricultural resources and the environment and (2) promote 

further improvement (enhancement) of soil, water, air, energy, plant and animal life, and 

other conservation purposes on working agricultural lands. Both programs are 

administered by NRCS. Contracts can be 5-10 years in length.

Note: The CSP stopped taking new contracts in 2008. Existing contracts are still in 

force and will be allowed to continue to maturity. Funding for the program is slowly 

ramping down. Because contracts can be for as long as 10 years, we will have some 

CSP payments well into this decade.

All other U.S. conservation programs:

Record the total number of acres the operation has enrolled in and the total amount of 

payments received from other U.S. conservation programs, including the following: 

Wetlands Reserve Program (WRP):

The Wetlands Reserve Program is a voluntary program offering landowners the 

opportunity to protect, restore, and enhance wetlands on their property. WRP is 

administered by NRCS. USDA provides technical and financial support to help 

landowners with wetland restoration efforts. USDA can purchase long-term or 

permanent easements that prohibit agricultural production or other non-wetland uses. 

About 90 percent of WRP acres are enrolled under 30 year or permanent easements. 

The program goal is to achieve the greatest wetland functions and values, along with 

optimum wildlife habitat, on every acre enrolled in the program.

Item 2e – Disaster and program payments

Agricultural Disaster Payments

Include the total amount of all market loss, disaster, or emergency assistance payments 

received from Federal programs. These programs include all Crop, Dairy, and Livestock 

Disaster Assistance Programs, the Crop Disaster Program, Dairy Disaster Assistance 

Program III (DDAP-III), Emergency Assistance Livestock, Honeybees and Farm-Raised 

Fish Program (ELAP), Emergency Conservation Program, Emergency Forestry 

Conservation Reserve Program (EFCRP), Livestock Compensation Program, Livestock 

Indemnity Program (LIP), Livestock Forage Disaster Program (LFP), Noninsured Crop 

Disaster Assistance Program (NAP), and Tree Assistance Program.

Exclude Federal crop insurance indemnity and other indemnity payments recorded later 

in Items 3e and 3f.
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Price Loss Coverage (PLC) Program:

Payments are issued when the effective price of a covered commodity is less than the 

respective reference price for that commodity. The payment is equal to 85 percent of 

the base acres of the covered commodity times the difference between the reference 

price and the effective price times the covered commodity’s program payment yield.

County – Agricultural Risk Coverage (ARC-CO) Program:

Payments are issued when the actual county crop revenue of a covered commodity is 

less than the ARC county guarantee for the covered commodity. Payments are based 

on county yields. The ARC county guarantee equals 86 percent of the previous fiveyear Olympic average national farm price (the ARC guarantee price) times the five-year 

Olympic average county yield (ARC county guarantee yield). Seventy percent of the 

county T-yield is substituted for any of the five years below it. Guarantee and actual 

revenue are computed using base acres. The payment is equal to 85 percent of the 

base acres of the covered commodity times the difference between the county 

guarantee and the actual county crop revenue for the covered commodity. Payments 

may not exceed 10 percent of the benchmark county revenue (the ARC guarantee price 

times the ARC-county guarantee yield). 

Individual – Agricultural Risk Coverage (ARC-IC) Program:

Payments are issued when the actual individual crop revenues, summed across all 

covered commodities on the farm, are less than the ARC individual guarantees summed 

across those covered commodities on the farm. The farm is the sum of the producer’s 

interest in all individual ARC FSA farms in the state.

The farm’s individual benchmark guarantee is the ARC guarantee price times the fiveyear Olympic average yield summed for all covered crops on the farm. Planted acreage 

is used. Actual revenue is computed similarly. The farm’s ARC individual guarantee 

equals 86 percent of the farm’s individual benchmark guarantee. 

The individual ARC payment equals 65 percent of the sum of the base acres of all 

covered commodities on the farm, times the difference between the individual guarantee 

revenue and the actual individual crop revenue across all covered commodities planted 

on the farm. Payments may not exceed 10 percent of the individual benchmark 

revenue. 

ARC-IC revenue loss payments are made when the current year revenue for all covered 

commodities planted on the farm falls below 86 percent of the farm benchmark revenue.

Margin Protection Program for Dairy (MPP – Dairy):

The Dairy Margin Protection Program replaces MILC. It will be effective not later than 

Sept. 1, 2014. The national dairy production margin is the difference between the allmilk price and average feed costs. MPP-Dairy offers protection to dairy producers when 

the national dairy production margin falls below a certain dollar amount selected by the 

producer. Producers may purchase buy-up coverage that provides payments when 

margins are between $4 and $8 per cwt. Catastrophic coverage provides payments to 

participating producers when the national dairy production margin is less than $4 per 

cwt. Adjusted gross income provisions do not apply to MPP-Dairy. To be eligible, dairy 

producers cannot be enrolled in the Risk Management Agency’s Livestock Gross Margin 

for Dairy.
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A participating dairy operation will receive a margin protection payment whenever the 

average actual dairy production margin for a consecutive two-month period is less than 

the coverage level threshold selected by the participating dairy operation. Payments 

may be reduced by a certain percentage due to the Sequester required by Congress.

Dairy Product Donation Program (DPDP):

DPDP does not make payments to producers. It purchases dairy products from 

processing plants and distributors.

All Other Federal, State, or Local Agricultural Program Payments

Milk Income Loss Contract (MILC) Payments:

USDA’s Milk Income Loss Contract Program (MILC) compensates dairy producers when 

domestic milk prices fall below a specified level. MILC payments are made on a monthly 

basis when the Boston Class I milk price falls below $16.94 per cwt as adjusted by the 

dairy feed ration adjustment. The MILC program was extended by the 2014 Farm Bill 

through Sept. 1, 2014, or until the new Margin Protection Program for dairy producers 

(MPP) is in place.

Record the total amount received by the dairy operation in calendar year 2015 from the 

MILC program.

Tobacco Buyout Payments Including Lump Sum Payments:

The Tobacco Transition Payment Program (also called the Tobacco Buyout Program) 

provides payments to tobacco quota holders and tobacco producers beginning in 2005 

and ending in 2014. Payments for both quota holders and producers are recorded under 

this item.

Tobacco buyout programs exist in tobacco States where State Departments of 

Agriculture provide funds to producers to grow other agricultural commodities instead of 

tobacco. Record the total amount of payments received in 2015 from participation in the 

Tobacco Buyout Program.

Other Federal, State, & Local Programs:

Include Federal, State, and Local agricultural program payments not reported above, 

such as rental, cost share, and other incentive payments received. Exclude payments 

received from private, non-profit, or other non-governmental entities. Exclude payments 

received in 2015 from selling an easement. Generally, an easement permanently 

restricts use of the land (e.g., a grassland easement restricts cropping rights, and a 

farmland preservation easement restricts development), although some States specify a 

maximum easement term of about 30 years. Exclude CCC loan payments.
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 Item 3–Other Farm-Related Income

Other farm related income sources may be an important part of the operation’s total 

income. The items below capture that income.

Item 3a – Custom Work and Machine Hire

Include income received by the operation for work this operation or its employees 

did for others using the operation's machinery such as plowing, planting, spraying, 

harvesting, preparation of products for market, etc. Exclude custom work which was 

considered separate from the operation and which had its own set of books. 

Item 3b – Grazing of Livestock

Include:

 any income this operation had from grazing of another operation’s livestock 

on a per head or gain basis.

 any income this operation had from grazing of another operation’s livestock 

on a short term (2-4 month) basis where the operation will harvest crops later 

in the year.

Exclude any contract arrangements previously recorded.

Item 3c – Sales of Forest Products

Record the total income from sales of all forest products from the total acres 

operated. Include sales of timber, pulpwood, firewood, etc.

Exclude short rotation woody crops, maple syrup and Christmas tree sales; they 

should be reported as crop sales in Section B.

Item 3d – Sales of Farm Machinery & Vehicles

Include:

 all direct sales of machinery used for farming, such as tractors, combines, 

farm machinery, and equipment.

 farm share of cars and trucks sold.

Exclude items traded in for other items since the value of these is deducted from the 

purchase price.

Item 3e – Federal Crop & Livestock Insurance

In 1996, Catastrophic Crop Insurance replaced disaster assistance. Under the new 

law, the Federal Crop Insurance Reform Act of 1995, farmers are required to obtain 

at least the basic catastrophic level of crop insurance coverage if they want to 

participate in most USDA programs. Information on Federal Crop Insurance 

Corporation (FCIC) crop insurance indemnity payments, combined with expense 
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data for purchases of FCIC crop insurance reported in Section I, are used to assess 

the impact of this crop insurance program on farmers.

Record the amount which was received from crop insurance indemnity payments. If 

more than one payment was received, total the payments. Include indemnity 

payments for the following if the program is administered by a Federal agency:

1) the loss of grazing on rangeland

2) crop revenue coverage

3) hail insurance

If members of the operator’s family received any insurance payments or workman’s 

compensation for illness or injury, include this income under off-farm income (Section 

N, Item 1j).

Item 3f – Other Crop & Livestock Insurance Payments

Report the other crop and livestock insurance payments that were received by this 

operation. Exclude payments received from casualty insurance, vehicle liability, 

blanket liability policies, operator dwelling insurance, and payments previously 

reported in Item 3e.

Item 3g – Cooperative Patronage Dividends & Refunds

Record the amount of patronage dividends resulting from ownership of shares in 

cooperatives. Include cash, equity dividends and patronage dividends returned to 

this operation by cooperative, sugarbeet ‘retains’ when received, and dividend 

payments received for shares in farmer-owned commodity processing plants, such 

as ethanol plants. These are frequently referred to as “value-added” shares. 

Item 3h – Income from Royalties or Leases Associated with Energy Production

Include income from royalties or leases associated with energy production from 

natural gas, oil, wind turbines, etc. If the wind turbine, oil well, etc. is on acres rented 

TO others (Section A, Item 3), include income from royalties here.

Example:

If an operation owns 2,500 acres and rents out 1,000 acres – with 5 of these 

rented acres containing wind turbines and access roads – report 2,500 acres in 

owned acres and 1,000 acres in acres rented TO others in Section A. Record 

the rent received from the 1,000 acres in Section A and the income from the wind 

turbines in Section H, Item 3h.

Item 3i – Proceeds from Sales of Farmland/Farm Real Estate

For the small number of farms with farmland sales, the proceeds from such sales 

can make an important contribution to the cash available to farm households for 

investment or consumption purposes. Report the gross proceeds for the sales of 

farmland or any other real estate right for acres that were part of the operation on 

January 1. Report sales of other off-farm farmland and other assets in Section N, 

Item 1g. 
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Example:

An operator owned two Sections of land, and partitioned off and sold one Section 

of unimproved (no buildings or other improvements) land for $640,000. The 

entire farm had a mortgage of $200,000 at the time of sale. At settlement, 

(ignoring real estate commissions and other closing costs) the entire mortgage 

was paid off and the operator received a check for $440,000. The total proceeds 

from this sale are $440,000. Had half the mortgage been paid, then the operator 

would have received a check for $540,000, reported here as proceeds, and the 

remaining $100,000 balance on the mortgage would be reported as farm debt in 

Section K.

Include proceeds received from selling an easement (i.e., a permanent or long-term 

(30-year) easement for the sale of development rights, cropping rights, etc.) or other 

partial interest in land. Generally, an easement permanently restricts use of the land 

and the landowner typically receives payment in one lump sum.

Item 3i (i) – Recognized Gain/Loss from Sales of Farmland/Farm Real Estate

If farmland and farm real estate sales are reported in Item 3i, record the 

recognized gain or loss from the sales. Record a loss as a negative number. 

Include gains or losses from selling an easement (i.e., a permanent or longterm (30-year) easement, sale of development rights, mineral rights, cropping 

rights, etc.) or other partial interest in land.

Item 3i (ii) – Number of acres sold

If farmland and farm real estate sales are reported in Item 3i, record the total 

number of acres sold or acres where one or more ‘right’ was sold.

Item 3j – All Other Farm Related Sources of Income

Report all other farm income not accounted for above. It may be helpful to prompt 

the respondent by referring to the list of “Other Farm Income” items on the 

questionnaire. Describe each of the items recorded here. If the income should have 

been reported in another item, then make the necessary corrections.

Include:

 Allotment or quota leases.

 Any Federal Excise Tax (FET) refund claimed, if the FET was included in 

fuels purchase cost.

 Hedging (futures contract) profits or losses.

 Refunds claimed for marketing charges which were withheld. (for example, 

Cotton Inc. refunds or Dairy Refund Payment Program refunds.)

 Equity or premium payments on CCC loans transferred to someone else 

(money received above the face value of the loan).

 Real estate tax rebates for land preservation.

 Income from renting or leasing of livestock.
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 Income from renting or leasing of tractors, trucks, etc.

 Road tax refunds.

 Sale of water. In areas of the West, operations with irrigation rights have 

been able to sell a portion of their annual water allotment to municipal, 

commercial, and other industrial users.

 Sale of soil.

 Sale of value-added goods from farm commodities.

 Other farm-related indemnities for insurance like liability and comprehensive 

insurance, and insurance on the farm house (if the house was owned by the 

operation and the value was reported in Section J, Item 1a).

 Payments received for cell phone towers, underground pipelines, access 

roads, etc., in which the operation receives an ongoing payment for their 

presence on the farm.

 Mineral royalties if they are tied to the farm. If they are not tied to the farm 

(ie, from inheritance), record in Section N, Item 1j.

 Carbon credits

5.8.4 Item 4– Largest Portion of Gross Value of Sales

Ask the respondent to select the category (crop or livestock) which, in the operator’s 

opinion, represents the largest portion of this operation’s gross value of sales. If the 

operation had no sales, choose crops if the value of cropland on the operation exceeds 

the value of any livestock. Otherwise, choose livestock.
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5.9 Section I – Operating & Capital Expenditures

5.9.1 Introduction – Importance and Uses

What’s this Section for? How is the information used?

This section provides the data used to develop estimates of farmers’ and ranchers’

costs of doing business -- the expense side of an income statement. Estimates of 

net farm income published by ERS are critical indicators of the health of the entire 

farm economy and help provide measures of how individual farmers are doing.

Since reports include all crops and livestock produced by the farm, data from this 

section provides the basis for tracking how costs are changing for different types of 

farms. Financial changes tracked over time provide USDA and Congress the best 

information for understanding the changes taking place in agriculture today. Underor over-reporting of costs would limit USDA’s ability to accurately report the cost of 

producing various crop and/or livestock commodities.

The first publication of estimates based on indications each year is the Farm 

Production Expenditures Summary produced in early August by NASS. Closely 

following this release is the Farm Sector Income Forecast in late August by ERS. It 

relies heavily on results of this survey, and includes income statements of the farm 

sector, along with balance sheets and financial ratios. 

This report and others are electronically available in the Farm Sector Income and 

Finances page of the ERS web site at: http://www.ers.usda.gov/topics/farmeconomy/farm-sector-income-finances.aspx#.VCGz4xbisqI. They are also presented 

in the ERS publication Amber Waves. Each publication is available via the Internet to 

anyone interested in farm sector financial performance. USDA also provides 

periodic reports of the Structure and Finances of U.S. Farms: Family Farm Report to 

Congress.

USDA provides summarized data and farm sector accounts to the Bureau of 

Economic Analysis (BEA), an agency within the Department of Commerce. BEA 

uses these data in estimates of the Nation’s Gross Domestic Product (GDP) 

accounts and Personal Income Indexes. These data ensure that BEA can accurately 

reflect the value of agricultural goods produced in the United States relative to the 

other industries. Information for non-farm industries comes from IRS sample data, 

the Census’ Survey of Population and Income, the Bureau of Labor Statistics’ nonfarm business surveys, the Federal Trade Commission and BEA. Data from nonfarm industries are published in BEA’s Survey of Current Business. Production 

expense estimates are provided to the Council of Economic Advisers in the Office of 

the President, which publishes them in its monthly Economic Indicators. This 

publication is prepared for the Joint Economic Committee of Congress.

In this section, each major cost item is obtained--seeds, fertilizers, chemicals, feed, 

purchased livestock, veterinary and medicines, custom services and work, labor 

costs including wages, taxes, benefits and services provided, fuel, utilities, repairs, 

insurance, accounting, attorney fees, real estate taxes, interest, and depreciation. 
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The detail allows USDA to compare and quantify, item by item, cost per unit 

indicators. Examining expenditures this closely improves the quality of both the 

individual and aggregate estimates of farm expenses. If we did not ask for cost by 

item, we know from experience that respondents fail to report items, particularly 

items not typically in their record books. While it takes longer to ask the detail of the 

cost statement, leaving out some costs would make net income appear larger than it 

is! 

More detail is asked on some items:

 Breeding stock is separated from other cattle, calves, hogs, pigs, sheep and 

lambs. Purchases of breeding stock are an addition to the farm’s capital, 

much like a truck or tractor. Operators can place breeding stock on a 

depreciation schedule and claim a deduction on their taxes. These 

purchases are not a part of ordinary operating expenses. Breeding stock is 

included in the balance sheet and the depreciation is included in the income 

statement. 

 Although poultry farms may also have breeding stock, all chickens and 

turkeys should be recorded in Item 4c. All other poultry should be recorded in 

Item 4d, “Other Livestock and poultry”.

 Depreciation and other non-cash items like inventory adjustment, and noncash benefits paid to workers are not a cash outlay for farm operations, but 

are necessary for ERS’ Farm Business Income Statement on its ARMS Farm 

Financial and Crop Production Practices web page.

 Depreciation measures the cost of using capital items during a particular year 

and reflects what has happened to the value of a farm's capital equipment. 

Usually, the entire cost of capital items (trucks, tractors, machinery, buildings, 

etc.) is not deducted as a business expense in the year they are purchased 

or built. Rather, the cost is spread out over their useful life. Farm operators 

are familiar with depreciation because it is a deduction claimed on their 

1040F tax form. Many farmers seek the advice of an accountant or tax 

advisor on how much depreciation they will claim on their purchased 

buildings, equipment and breeding stock.

 Depreciation is also used in the farm household statistics so self-employment 

income from farming matches the Commerce Department definition of selfemployment income from a non-farm business. This allows income from 

farm businesses to be compared with non-farm business income by the 

Commerce Department, which has responsibility for statistics on all aspects 

of the U.S. economy.

 If the operator has multiple operations, only account for the expenses that 

belong to the operation identified on the label. For operators with multiple 

operations, keep in mind the acres and livestock reported in previous 

sections for the selected operation. Expenses from the other operations are 

accounted for in Section N.
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5.9.1.1 General Instructions

ALL EXPENSES FOR THIS OPERATION (defined by the total acres recorded in Section

A, Item 4) paid in the reference year should be included in this section. This includes 

expenses for the Operator and Partners, Landlords, and Contractors. The three 

columns represent this division of expenses. Be sure to record the expenses in the 

correct column. In particular, do not record an expense that a contractor reimbursed the 

operator for in the operator column. Probe to verify the respondent has reported costs 

associated with each item that were paid for by the landlord or contractor.

Exclude expenses not related to the farm/ranch, expenses for performing custom work 

for others if a separate set of books are used for the custom business (in this case, 

custom work income is NOT recorded in Section H, Item 3a), and household and living 

expenses.

Ask the respondent to use farm/ranch records and explain that the interview will 

probably be shorter if these records are used. You are far more likely to get accurate 

information from records than from respondents who are relying on memory or guesswork. The questionnaire generally reflects common record keeping systems. 

Many of these expenses or groups of expenditures are mentioned on the IRS 1040F. 

The 1040F should not be used to entirely complete this section of the questionnaire. 

While many expenses are covered, the items in 1040F do not have the details

necessary for each item in the questionnaire. There are also some definitional 

differences between the 1040F and the questionnaire.

If the respondent cannot give exact dollar figures, BEST ESTIMATES are acceptable.

5.9.1.2 Expenses for Landlords & Contractors

Expenses paid by landlords and contractors are recorded in the appropriate columns in 

this section. These figures are added to the expenses provided by operators for their 

farms to develop estimates of the total costs incurred to produce crops and livestock 

during the calendar year. In some situations, landlords and contractors provide a 

relatively large share of some expense items such as seeds, fertilizer, pesticides, 

purchases of livestock and feed, and property taxes. For example, in 2014, contractors 

paid $27.8 billion (44 percent) of the total $63.7 billion feed expenses.

It is even more important to have a good estimate of contractor and landlord expenses 

when the operation’s expenses are expanded to represent all farms. This gives us the 

complete estimate of total farm production expenses used to calculate net farm income. 

If landlord or contractor expenses are incomplete or understated, then total expenses 

will be understated. When that happens, the farm sector net income is reported too high 

and the sector appears in better financial shape than it actually is.

ERS combines expense data reported for landlords with the gross rent reported in this 

section for cash rent and share rent to develop an estimate of the net rent earned by 

landlords. Landlords’ net rent is similar in concept to farmers’ net income -- both 

measure economic well-being.
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Contractor Expenses

The expenses reported for contractors are combined with an estimate of the value of 

product removed under production contracts (quantity removed under contract times an 

average price for the state), to develop an estimate of contractors’ share of net farm 

income.

Under most production contracts, the contractor usually directly pays most of the 

production expenses or reimburses the contractee for the expenses while the commodity 

is on the contractee’s operation. Sometimes reimbursement for these expenses is 

added to the amount paid (fee) to the contractee for services. Settlement sheets or 

other contract documents usually break out reimbursed expenses. Include reimbursed 

expenses.

Sometimes the contractor charges the operator for some expenses the contractor 

originally paid. Examples of this are sometimes found in production contracts for 

processing vegetables, where the contractor originally paid for items such as seed and 

chemicals. Then the contractor charges the operator for their costs, as deductions from 

the gross value on the settlement sheet. These expenses should be recorded in the 

operator’s column, since the operator ultimately paid for the inputs.

If the operator cannot provide settlement sheets (or otherwise report contractor 

expenses), write notes detailing the type and amount of services provided by the 

contractor. Record the contractor’s name, address and phone number so the Regional 

Field Office can contact the contractor to get the information. 

DO NOT CONTACT CONTRACTORS to complete this section. Contact landlords and 

contractors only when instructed to do so by the Regional Field Office. This contact 

should be made only through (or by) the Regional Field Office to avoid the possibility of 

several enumerators contacting the same contractor. NASS has authorization to 

conduct a contractor survey before the normal ARMS cycle and may already have the 

data on hand. Enumerators assigned to complete any of the follow-up interviews with 

contractors can get the information on expenses paid by the contractor using a blank 

questionnaire or by using a contractor expense worksheet provided by some Regional 

Offices.

Landlord Expenses

Most operators who rent land will know which expenses were paid by their landlords. If 

for some reason, the operator cannot provide these numbers DO NOT CONTACT THE 

LANDLORD(S). If the operator does not know the amount paid by their landlords, they 

should know which items were paid. If this happens, provide detailed notes explaining 

which items were paid for by the landlords so the Regional Field Office can provide an 

estimate for these expenses. Clearly determine whether a landlord paid taxes on rented 

land. This is particularly important because taxes are the largest landlord expense in 

aggregate and are one of the most overlooked expenses. If the operator paid the 

landlord’s taxes, please indicate with a comment.
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Expenditures Related to Final Commodity Transportation

This survey focuses on the financial status of the farm sector. When and where the 

commodity is sold affects not only who is responsible for the expenditure, but also if the 

expenditure should be recorded. After payment and ownership are transferred, any 

expenditure related to the commodity is the responsibility of the new owner and should 

be recorded as such on the questionnaire only if the new owner is the target operator.

One situation that occurs in livestock operations is livestock that are priced and sold on 

the farm (FOB) to a slaughterhouse (payment and ownership are transferred at the 

farm). If the slaughterhouse agrees to a price, pays for, and takes ownership of the 

livestock on the farm, the slaughterhouse is responsible for the transportation 

expenditures from the farm to the final destination. The transportation expenditures, as 

a result, are NOT recorded in the ARMS questionnaire since at the time of transport; the 

livestock are no longer part of the target operation.

For a transfer of ownership between one operation and another, the timing of payment 

and commodity transfer determines which operation accounts for the transportation 

expense to the final destination. If payment and commodity transfer occurs at the final 

destination, then any expenditure associated with transportation is the responsibility of 

the seller.
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5.9.2 Operating Expenses

Item 1 – Seeds, Plants, Trees, etc.

This item refers to the cost of any purchases in the reference year whether they were 

entirely used or not. For example, a farm may have purchased $1,000 of seed but 

only planted $800 of it. In this case, record the $1,000 for expenditures and record 

the remaining $200 as a production input asset in Section J. Make sure the 

respondent accounts for all purchases of seed, sets, plants, trees, etc., not only the 

amount used to plant the crop harvested. Note that operations can have these 

expenditures even when they did not have any harvested acres. Be sure the 

operator remembers to include any expenses for seed for pastures. Seed expenses 

are often a line item in record books (and on the IRS 1040F). 

Include:

 expenditures for cleaning or treating homegrown seeds or plants

 expenditures for trees or shrubs used as windbreaks or for reforestation (if 

the operation did not consider this a capital expense)

 seed expenses for cover crops planted on idle land

 expenditures for plants purchased and transplanted to grow as a crop (for 

example, tobacco transplants)

 technology fees for purchasing genetically altered seed

Exclude:

 expenses for items purchased for direct resale without additional growth

 tree purchases that were considered capital expenses. These should be

recorded as land improvements later in this section

 value of homegrown seed

Item 2 – Nutrient, Fertilizer, Lime, and Soil Conditioners

This expense is a line item in almost all farm record books (and on the IRS 1040F). 

Include expenses for:

 all commercial fertilizer 

 fertilizer-pesticide combinations

 pre-emergence herbicides mixed with fertilizer sold as one product

 trace elements (micro nutrients) such as zinc and copper

 lime and all soil conditioners, purchased manure, cottonseed hulls, sludge, 

gypsum, sulfur, marl, peat, and other conditioners

 application costs if materials were custom applied

Exclude expenses for potting mixes, vermiculite, and sterilized soil. This is recorded 

in Item 45 (other expenses)
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Item 3 – Agricultural Chemicals or Biocontrols

Chemical and biocontrol expenses are recorded as a line item in most record books 

(and the IRS 1040F). Include crop, livestock, dairy, poultry, and general farm use 

chemicals.

Include expenses for:

 insecticides, herbicides, fungicides, defoliants, nematicides, fumigants, 

growth regulators, and rodenticides used on crops, pastures, seeds, crop 

storage buildings or seed beds for the control of all types of weeds, diseases, 

insects, rodents, fungi, nematodes and other predators

 all sprays, dusts, granules or other materials

 application costs if materials were custom applied

 carrier materials such as fuel oil, solvents or wetting agents mixed with 

pesticides

 all pesticides applied to crops or buildings 

 all sprays, dips, dusts, dairy pesticides, udder antibacterial disinfectants, and 

other chemicals purchased for use on livestock. If the respondent records 

these items under supplies, try to get them broken out and include them here.

Exclude expenses for:

 the value of pesticides in fertilizer-pesticide combinations (record in Item 2)

 cleaning chemicals for equipment and buildings on dairy and other livestock 

enterprises (record these expenses in Farm Supplies later in this section)

Item 3a – Custom Application

Record the dollar amount of the total (Item 3) chemical and biocontrol expense 

that was for custom application only. Include the cost of chemicals that were 

used for custom application.

5.9.2.1 Livestock Expenses: Items 4-8

Purchased feed, livestock purchases, livestock leases and livestock expenses such as 

breeding and veterinary services are usually recorded as line item expenses in record 

books. You may have to probe to break figures out for some of the expense categories. 

If there are livestock expenses, there will likely be livestock inventories in Section C and 

the value of those livestock reported in Section J. If not, please make a note.

Item 4 – Livestock Purchases

Include genetic royalty fees (if applicable) for purchased livestock. 

Exclude all expenses incurred by feedlots and other types of contractees that fed this 

operation’s livestock on a custom basis. If this operation is a feedlot, include only 

expenses for which it was not reimbursed in the Operator column. Expenses for which 

the operation was reimbursed should be recorded in the Contractor column. One 

common example where a feedlot is almost always reimbursed is the cost of feed – even 

if the feedlot grows the feed.
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If the respondent purchased livestock in the reference year, include the purchases of 

animals directly related to production on this operation. If livestock are purchased then 

grown on another operation, make a note of the situation for the Regional Field Office. 

Purchases of livestock and poultry during the reference year should include the price of 

the animals plus commission, yardage, insurance and fees. 

In large integrated operations, livestock or poultry are usually transferred from one 

production phase of the operation to another production phase. Although this is not a 

true purchase, we need an estimate of the value of the livestock or poultry at the points 

they move between production phases to accurately gauge the net value of production. 

An example of this is a hatchery that receives hatching eggs from another part of the 

integrated operation. In this case, we would obtain an estimated value or “book value” of 

the hatching eggs. Without an estimated cost of hatching eggs to the hatchery, the net 

value of the hatchery output would be overstated. This practice is in line with accounting 

practices of non-farm corporations that assess the “profitability” of each phase of 

production. This makes it possible to compare profitability of farms with non-farm 

businesses at the National and State level.

Item 4a – Breeding Stock for Cattle, Hogs, & Sheep

Include expenses for:

 BEEF animals to be used as breeding stock or herd replacement for this 

operation, regardless of age

 MILK cows

 DAIRY animals to be used as breeding stock or herd replacement for this 

operation, regardless of age

 all gilts, sows and boars purchased for breeding purposes

 all ewes, rams and lambs purchased for breeding purposes

Item 4b – All Other (Non-Breeding) Cattle, Calves, Hogs & Pigs

Include expenses for:

 any cattle or calves not purchased for breeding herd replacement and/or 

expansion

 cattle placed in a feedlot

 all other hogs and pigs such as feeder pigs and market hogs

Item 4c – Chickens & Turkeys Purchased

Record the total cost for all chickens and turkeys purchased by the operation or 

transferred from one production phase of the operation to another production 

phase in the reference year. Transfers are not a true purchase, but we need an 

estimate of the value of the poultry moving through the operation.

Include poultry raised under contract in the operator column only if the operation 

is considered to have purchased the birds. In most contract arrangements, the 

contractee does not purchase the birds. In this case, record the value of the 

poultry at the time it was placed on the operation as a contractor expense.
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The respondent may have settlement sheets from their contractor for each flock 

that list these expenses. Expenses are listed either as a total for each item or on 

a per pound basis. Total expense for the year is determined by the number of 

flocks or total pounds of birds raised. If the operator cannot provide a settlement 

sheet or report the expenses, find out how many birds the operation grew under 

contract in the reference year and explain with a note. 

Item 4d – Other Livestock, Poultry, Fish, Bees, etc.

Include expenses for:

 all sheep and lambs, other than for breeding

 mules, goats, all horses and ponies, etc.

 ducks, geese, guineas, pigeons, etc.

 hatching eggs

 bees purchased

 rabbits, mink and other fur bearing animals

 catfish or other fish raised commercially or for on-farm consumption

 milk and eggs purchased to fulfill marketing contracts

 dogs used to work livestock or as guard dogs

 all other livestock or products not already included

Exclude expenses for animals kept only as pets.

Item 5 – Leasing of Livestock

Include expenses for:

 Renting or leasing of livestock by this operation.

 Renting bees and bee hives.

Item 6 – Purchased Feed

This expense is a line item in most farm record books (and the IRS 1040-F).

Include all feed grains, hay, forages, mixed or formula feeds, concentrates, 

supplements, premixes, salt, minerals, animal by-products and all other feed 

additives and ingredients. Almost every livestock operation should have something 

for this expense even if it is basic salt and mineral blocks.

Item 7 – Bedding & Litter

Record the amount spent by the operation for bedding and litter for livestock, dairy 

and poultry.

Include expenses for:

 straw, hay, etc

 sawdust, wood chips, corn stalks, etc

 all other bedding and litter items
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Item 8 – Medical Supplies, Veterinary, & Custom Services for Livestock

Include expenses for:

 artificial insemination and breeding (AI)

 breeding fees and semen

 branding

 castrating and caponizing

 custom feed processing, grinding and mixing services. (The cost of feed 

should be included in purchased feed. If the respondent includes custom 

feed processing with feed costs in farm records, try to get this item broken out 

and include it here.)

 veterinary services or supplies, etc.

o Pregnancy testing and other health examinations

o Horomone injections

o miscellaneous livestock and poultry medical services and supplies 

(regardless of where purchased)

 performance testing

 seinging of fish

 sheep shearing

 horse-shoeing for work horses used on the operation

 removal of dead animals

Exclude expenses for manure disposal. These will be reported in Item 28a.

5.9.2.2 Fuels, Utilities, & Purchased Water (Farm Share Only): Items 9-12

These questions ask for the total spent for the farm share of utilities, fuels and irrigation 

water. Farm record books (and the IRS 1040F) have an entry for total gasoline, fuel and 

oil expenses but will not have the breakdown needed for these questions. 

Only the FARM SHARE should be reported, which is whatever the operation took as its 

business expense on its tax form and/or income statement. One way to help the 

operator report here, especially if his records are itemized differently, is to remind 

him/her of how the costs would have been incurred, such as for operating irrigation 

pumps, drying equipment, motor vehicles, machinery, etc.

For farm share of utility expenses, include monthly or annual charges to maintain service 

even when a utility is not being used (stand-by fees). Also include emergency electric 

guarantee fees, etc.

If farm and home meters are separate, exclude costs for water and/or electricity for the 

home except in situations where the farm office is in the home. In this case, include the 

farm share of home water and/or electricity expense. If some or all of the farm buildings 

shared the same meter as the home, include only the farm's share of the costs in this 

item.
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Include expenses for:

 FARM SHARE ONLY of all fuels used (on this operation) in autos, trucks, 

tractors, self-propelled machinery (combines, swathers, etc.), irrigation 

pumps, elevators, chain saws, etc.

 all fuels for heating and lighting farm buildings

 fuels used to heat a farm office (including the cost of coal or wood)

 fuels used for drying or curing crops (including the cost of coal or wood)

 fuels for vehicles and machinery used both on this operation AND for custom 

work or machine hire, provided these activities are NOT a separate business 

(See 1st Exclusion below). Income from custom work and machine hire will 

be reported as farm-related income in Section H, Item 3a.

 aviation fuels

 Federal excise fuel taxes. (Refunds of Federal excise fuel taxes paid should 

be reported as other income in Section H, Item 3j.)

 purchased irrigation water 

 the costs of electricity or other fuel associated with irrigating

 All farm share expenses for other utilities including telephone service and 

water other than irrigation

Exclude expenses for:

 fuel for machinery used only for custom work where separate books were 

kept and income from custom work was considered to be from a separate 

business. In this case, no income from custom work will be reported either in 

Section H, Item 3a.

 petroleum products used as carriers with pesticide sprays. (These should be 

included in Item 3 in this section.)

 fuel used in motor vehicles for non-farm use and in other engines or 

machinery used for non-farm purposes

 fuels used for heating or cooking in the operator's residence

 fuel provided to farm employees for non-farm use as a non-cash benefit

Item 9 – Fuel Expense: General

Record the farm share of the total fuel expense including diesel fuel, gasoline and 

gasohol, natural gas, LP gas (propane and butane), all other fuels (coal, fuel oil, 

kerosene, wood, etc.), and oils and lubricants (grease, hydraulic fluids, motor oils, 

transmission fluids, etc.). Refer to the header “Expenditures Related to Final 

Commodity Transportation” at the end of the Introduction of this section, Page 5-62

to determine which fuel expenses related to final commodity transfer are recorded in 

this Item.

Item 9a – All Fuels, Oils & Lubricants

Record the farm share of expenses for ALL fuel, oils and lubricants. Items 9a(i) 

through 9a(vi) must equal 9a.

Item 9a(i) – Diesel Fuel

Record the farm share of expenses for diesel. Include biodiesel and 

vegetable oil.
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Item 9a(ii) – Gasoline and Gasoline Blends that Include Ethanol

Record the farm share of expenses for gasoline and gasohol including 

ethanol.

Item 9a(iii) – Natural Gas

Record the farm share of expenses for natural gas.

Item 9a(iv) – LP Gas

Record the farm share of expenses for LP gas (propane, butane).

Item 9a(v) – Oils and Lubricants

Record the farm share of expenses for oils and lubricants. Include grease, 

hydraulic fluids, motor oils, transmission fluids, etc.

Item 9a(vi) – All Other Fuels

Record the farm share of all other fuels. Include coal, fuel oil, kerosene, 

wood, etc.

Item 10 – Electricity

Record the farm share of the total amount spent for electricity, including irrigation. 

Include electricity for the farm office, barns and other farm buildings. If the farm 

office is in the home, include only the farm's share of the home electricity expense. 

Include monthly or annual charges to maintain service even when electricity is not 

being used. Include emergency electric guarantee fees, etc.

Item 11 – Purchased Irrigation Water

Record the total costs of purchased irrigation water acquired from any off-farm water 

source to irrigate crops on the farm. Include any drainage assessments, delivery 

charges, or other fees associated with the purchased water, and any standby fees 

and/or taxes which must be paid even if no water is used.

Item 12 – All Other Utilities 

Record the farm share of the total expense for telephone service and calls, water 

(other than for irrigation), and all other utilities not previously reported. Include

monthly or annual charges to maintain service even when the utility is not being used 

(stand-by fees). If farm and home meters are separate, exclude all costs for utilities 

for the home except in situations where the farm office is in the home. In this case,

include the farm share of the utility expenses for the office. If some or all of the farm 

buildings shared the same meter as the home, include only the farm's share of the 

costs.
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5.9.2.3 Farm Supplies, Repairs, & Maintenance: Items 13–16

Item 13 – Farm Supplies, Marketing Containers, Tools, Shop Equipment, etc.

Record expenses for miscellaneous supplies and equipment, marketing containers, 

hand tools and farm shop power equipment not placed on a depreciation schedule. 

(Power equipment is defined as equipment requiring fuel or electricity to operate). 

Exclude expenses for containers purchased for direct resale to consumers. 

Exclude expenses for fencing and irrigation equipment--these will be collected 

separately.

Include expenses for: 

 general farm supplies, agricultural bags, canvas, polyethylene film, 

tarpaulins, baling wire and twine, scales, acetylene gas, oxygen and welding 

rods, dairy equipment cleaning chemicals (detergents, sanitizers) etc.

 carpentry, electrical, and plumbing supplies, axes, fencing tools, forks, 

picks, scoops, shovels, spades, chainsaws, ladders, bolts, chains, nails, rope, 

etc.

 mechanic's tools, pliers, wrenches, bolt cutters, power drills, grinders, saws, 

sanders, welders, compressors, battery chargers, hoists, jacks, winches, fuel 

tanks etc.

 containers purchased for planting, growing, harvesting or marketing any 

commodity such as baskets, boxes, flats, trays, sheets, totes, bins, crates, 

wool bags, etc., and nursery production (even if they are to be resold with the 

plant.) Exclude containers purchased for direct resale to consumers.

 usage charges or rental fees for containers provided by a buyer, shipper, or 

packer

 rental or per unit fees for containers, sheets, etc. provided by a marketing 

association or cooperative

 attachments and accessories for any items in this category

 rain gear or other protective clothing purchased for use on the operation

 repair of tools and other items in this category

 other supplies and tools which are generally reusable and which are not 

included elsewhere 

Item 14 – Repairs, Parts and Accessories for Vehicles, Machinery, & Equipment

Record the total FARM SHARE of expenses for materials, labor, parts and services 

for repair and upkeep of motor vehicles and equipment. Include the cost of 

accessories for machines and equipment. If they are not listed separately in the 

operator's records, family use expenses may be included.

Include expenses for all:

 tune-ups or overhauls of machinery or equipment (if not placed on a 

depreciation schedule)

 damage repairs even if covered by insurance settlements
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 maintenance and repairs for all vehicles, machinery, equipment, implements, 

EXCEPT irrigation equipment

 parts and accessories for vehicles and equipment

Examples of these expenses include:

 major engine overhauls, if not placed on a depreciation schedule, 

 repair of power equipment: services and parts for overhauls, minor tuneups, valve and ring jobs, tune-ups, brake adjustments, exhaust system 

repairs, tubes, tires, front end alignments, steering adjustments, wheel 

balancing, replacement of shock absorbers, repair of carburetors, fuel 

pumps, fuel injector systems, water pumps, electrical systems, clutches 

and transmissions, body work, frame repairs, painting and glass 

replacement

 accessories: hitches, wheel weights (including fluid), mirrors, radios, 

tractor cabs, air conditioners, hydraulic cylinders

 electric sensor systems (auto steering, yield monitoring, etc.) 

 replacement parts for all machinery including disk blades, cultivator 

sweeps and shovels, sickles, guards and baler parts

 repair of livestock or poultry equipment

 frost protection system repairs and maintenance

Exclude expenses for:

 accessories included in the purchase cost of vehicles, machinery, equipment, 

etc.

 utility beds, boxes and hydraulic systems purchased separately from a newly 

purchased truck. Record these in Item 44 (All Other Capital Expenditures).

 Repairs that are included on a capital asset’s depreciation schedule. 

(Expenses that are placed on a depreciation schedule are capital expenses. 

Repairs of this kind should be recorded in All other Capital Expenditures with 

a note on the specify line indicating that the expenditure is a major repair to 

an owned capital asset and record the type of capital asset repaired.)

Item 15 – Maintenance/Repair of Farm Buildings & Land Improvements

Record all expenses associated with maintenance of fences, buildings and other 

structures, and land improvements. Maintenance and repair expenses for existing 

land and conservation improvements are those expenses the operation has on a 

regular basis and which have to be done for these improvements to continue to be 

useful. 

Example: Annual leveling done for irrigation systems and repairing existing dikes 

and ponds.
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Include maintenance and repair of:

 houses for hired farm/ranch labor or tenants

 all other farm/ranch buildings such as barns, shops, storage facilities, sheds, 

silos, bins and similar structures

 wells

 drainage facilities

 repairs and maintenance of irrigation equipment

 all other farm improvements

Exclude any new construction or remodeling expense (These should be reported 

under Capital Expenses (Items 34-36)).

Item 16 – Maintenance & Repair of the Operator’s House

Record the total amount spent in the reference year for maintenance and repairs to 

the operator's house, if it was owned by the operation.

If the operator does not understand what is meant by “owned by the operation”, offer 

the definitions noted on the questionnaire. “Owned by the operation” means the 

house is recorded as an asset in farm record books, or deeded as part of the farm.

Exclude any new construction or remodeling expense.

5.9.2.4 Insurance, Interest, & Taxes: Items 17–19

Item 17 – Insurance

All expenses for this item should be for the farming operation only.

Include the farm share of all types of insurance including casualty insurance, crop, 

grazing, and livestock insurance, motor vehicle liability, blanket insurance policies, 

etc. In most record books, insurance expense is a line item. The IRS 1040F also 

contains a similar expense item. 

Exclude premiums paid in prior years for coverage in the reference year. Also 

exclude premiums paid for life, health, and other payroll insurance which are 

included in Section N, as part of the household expenses.

Item 17a – Federal Crop Insurance

Record the dollar amount of the total (Item 17) insurance expense that was for 

Federal crop insurance. 

Include:

 insurance premiums for the loss of grazing on rangeland, if the program is 

administered by a Federal agency

 insurance premiums for crop revenue coverage, if the program is 

administered by a Federal agency
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Item 18a – Interest & Fees Paid on Debts Secured by Real Estate

Record the total amount spent by the operation in the reference year for interest and 

service fees for all loans owed by the operation which were secured by real estate. 

“Secured by real estate” means that real estate, such as land, building or a home, 

was used as collateral in obtaining the loan. 

Exclude:

 interest on farm debts that was not part of this operation

 interest on the operator’s residence if it is owned by the operator separately 

from the operation

 payments made on the loan principal amount

 interest and fees paid on debts NOT secured by real estate

Item 18b – Interest & Fees Paid on Debts NOT Secured by Real Estate

Record the dollar amount spent by the operation in the reference year for interest 

and service fees for all loans owned by this operation that were secured by farm 

assets other than real estate, such as machinery, tractors, trucks, other equipment, 

fertilizer, feed, seed, or livestock and poultry, breeding stock, money borrowed for 

use as working capital, and interest paid on CCC loans. Exclude interest and fees 

paid on debts secured by real estate that are reported in Item 18a.

Item 19a – Real Estate Taxes

Record the amount of real estate taxes paid by the operation in the reference year. 

This is a line Item in most farm record books (and the IRS 1040F.) Exclude taxes 

paid on personal property (they are included in Item 19b).

Some states allow homestead exemptions, old age exemptions, etc., so all land 

owners may not be required to pay taxes on any, or a part, of their land. If the 

operation is not required to pay taxes due to an exception, make a note on the 

questionnaire.

Include:

 taxes on farm land and buildings including the operator’s dwelling, if owned 

by the operation

 taxes paid in the reference year, even if they were levied in another year

 all partners' shares of taxes when a partnership is reported

Exclude:

 taxes on personal property (include in Item 19b)

 income taxes paid to IRS

 taxes on land rented to others (this is collected on the rentee’s form)

Item 19b – Other Property Taxes

Personal property taxes may be assessed on things such as cars, trucks, farm 

machinery, livestock, production inputs, etc. that are not associated with land or 

buildings. Record the total amount this operation paid in the reference year for 
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property taxes on assets other than land or buildings. Exclude vehicle registration 

and license fees; they will be collected in Item 21.

Item 20 – Renting & Leasing Vehicles, Tractors, Equipment & Storage Structures

Record the total expense for renting or leasing all vehicles, tractors, farm machinery, 

equipment and structures.

Item 21 – Vehicle Registration & Licensing Fees

USDA accounts for income generated on farms in a manner consistent with that 

used internationally, following guidelines established by the Organization for 

Economic Co-operation and Development (OECD). The U.S. value-added measure 

includes payments linked to production made to governments as an expense 

category. Property taxes and vehicle registration and licensing fees are components 

of this category.

Record the total expense paid by the operation in the reference year for the farm 

share of registration and license fees for motor vehicles, trailers, etc. Also include 

hazardous material (HAZ-MAT) hauling license fees required in some states to haul 

agricultural chemicals on public roads. If license fees associated with new vehicles 

were collected by the dealer when the vehicle was sold, they should be listed on the 

purchase agreement or bill of sale. Probe to be sure personal property taxes 

assessed on purchased vehicles are not included in this item. These taxes should 

be recorded in Item 19b.

Item 22 – Depreciation for Capital Assets

Capital assets typically last for multiple years, so the cost of using an asset must be 

allocated over the life of the asset. In taxes and accounting, this is done through 

“depreciation”. It is not counted as a cash expense for the year. Since it is not a 

cash expense, depreciation and capital expenses are not double counted.

Depreciation is a formula based estimate of an assets useful life and how much 

value is lost each year it is owned by the operation and employed in production. DO 

NOT enter the CURRENT VALUE of all depreciable assets in this cell. 

Depending on current tax rules, depreciation may be accelerated into one or two 

years, but more routinely, the formula for depreciation is the original cost of an item, 

less expected salvage value, spread over the years in the service life set for the item 

by the IRS. Accountants and tax advisors usually determine a depreciation schedule 

(over how many years capital assets will be used up) for the farmer. 

The depreciation expense is the amount that was claimed for the reference year and 

is a line item which is available on the IRS 1040F. For this survey, use the 

depreciation amount claimed by the respondent on his income tax return if he/she is 

agreeable. 
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Special conditions: 

• If the operator has been farming a long time, his equipment and breeding stock 

may be ‘depreciated out’, meaning he or she did not claim any depreciation on his or 

her taxes. If this is the case, make a note explaining the situation.

• If the operation is a partnership, include the amount claimed by all partners. 

Item 22a – Depreciation for Breeding Livestock

Record the amount of Item 22 that was specifically for breeding livestock. (Only 

purchased breeding stock can be depreciated).

5.9.2.5 Expenses Related to Hired Workers: Items 23-26

Item 23 – CASH WAGES paid to hired farm and ranch labor

Record the total cash wages and bonuses paid to all hired farm and ranch labor on 

this operation during the reference year for agricultural work. 

Include in the total amount paid:

 cash wages, incentives, bonuses and profit percentages paid to workers 

doing agricultural work on land in the operation 

 wages paid to family members and corporate officers

 salaries of hired managers

 the SALARY paid to the operator. (Do not include “draws”. “Draws” are 

money taken out of the farm/ranch business for household expenses or other 

non-farm/ranch expenses.)

 portions of payroll taxes and cash benefits paid by the employee and withheld 

from their wages.

Exclude from the total amount paid:

 wages paid for housework

 expenses for contract labor

 money taken by the operator's household on a “draw”

 Employer’s share of payroll taxes including Social Security, Unemployment, 

Worker’s Compensation, etc.

 benefits such as health insurance, life insurance, pensions, retirement, etc.

Paid labor includes only those workers whose pay was considered a business 

expense of the farm/ranch operation during the reference year. These workers 

should have gotten a W-2 form from the operation, but for some reason they may not 

have. The key point in this item is that if the wages paid to the workers were 

considered a business expense to the operation, include them here. Operators who 

had more than 500 work hours of farm labor in any quarter during the year are 

affected by minimum wage laws. 
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Paid labor Includes:

 agricultural workers on the payroll no matter where they worked

 agricultural workers on paid vacation or sick leave

 service workers provided to other operations by the selected operation

 family members who were paid by the operation

In order to be counted as agricultural workers, employees must be involved in 

activities defined as being agricultural work.

Include as Agricultural Work:

 work done ON this operation in connection with the production of agricultural 

products, including nursery and greenhouse products and animal specialties 

such as furs, fish, bees, honey, etc.

 work done OFF this operation such as trips for marketing products of the 

operation, buying feed, delivering products to local markets or handling other 

farm-related business

 repairs of farm/ranch buildings and machinery when performed by someone 

who is considered an employee of the operation

 bookkeeping done by an employee of the operation

 managing a farm/ranch for a salary

 meal preparation for work crews

Exclude from Agricultural Work:

 housework such as cooking, cleaning, babysitting, etc. done for the 

operator’s family and household

 operating a gasoline station, store or other such non-agricultural enterprise 

even if it was located on the operation

 work involved in training, boarding or renting animals such as horses and 

dogs unless it was part of, and cannot be separated from, the business of 

raising the animals

 caring for research animals

 work at a roadside stand (or farm store) UNLESS the operation produced 

more than 50 percent of the products sold at the stand

 work which alters the commodity produced (such as wineries, canneries, 

textile mills, etc.) even if it is done on the operation and the workers are paid 

by the operator. Make a note if the respondent cannot separate these 

workers and their wages from operation's total payroll.

 all work provided by service firms such as cotton ginning (record as a 

marketing charge), commercial bookkeeping, legal and other professional 

services provided at a location off the farm. All other items, except the 

ginning and farm management (professional) services, should be recorded as 

a “General Farm Business Expense” in Item 32.

Items 24(a-e) – Breakout of Cash Wages Paid

The breakout of total cash wages is important to assure that the respondent includes 

cash wages paid to self, spouse, other operators, and other family members. The 

wages paid to farm and ranch labor are more obvious to the operator when he/she 

responds to this section. This breakout also allows for the proper allocation of cash 

wages to operator household income when data is processed. Record the actual 
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dollars paid of the total cash wages paid (Item 23) to people in each of the categories 

listed. The sum of 24a + 24b + 24c + 24d + 24e MUST equal the total reported in 

Item 23 in the questionnaire.

Item 24a – The Operator

Record the amount paid to the operator, including hired managers. A hired 

manager is a salaried or hourly employee that gets a fixed wage or salary paid 

out from either the owner or the farm’s financial accounts to manage and make 

day-to-day decisions for the farm. Bonuses are part of the hired manager’s 

salary.

Exclude money taken out of the operation on a draw by the owner/operator. 

Item 24b – Wages Paid to Spouse 

Record the amount paid to the principal operator's spouse.

Item 24c – Other Household Members

Record the amount paid to the other members of the operator's household. 

Exclude salaries paid to partners (unless they live in the household) and to their 

household members. These should be included in Item 24d. Household 

members include everyone who lives in the operator's house and shares the 

financial resources of the operator. Usually these are family members. Include

people who do not live in the house if they are dependents of the operator 

(college students, etc.).

Item 24d – Other Operators

Record the amount paid to other operators for this operation. These are persons 

responsible for the day-to-day management decisions for this operation, 

including hired managers as defined in 24a. Exclude operators that are 

household members of the principal operator. These should be included in 24c.

Item 24e – All Other Paid Farm/Ranch Labor

Record the amount paid to all hired workers of the operation except those 

included in Items 24a, 24b, 24c, and 24d. Include wages and salaries to family 

members who are not members of the operator’s household.

Item 25 – Payroll Taxes

Record the total dollars spent by this operation for payroll taxes like Social Security, 

Unemployment, etc. If the employees paid a share of some of these items and their 

share was withheld from their wages, the expense for their share should be included 

in Cash Wages.
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Item 25a – Percentage of Payroll Taxes that was for household members 

Record the percentage of the total (Item 25) payroll taxes that was for household 

members.

Item 26 – Benefits for Hired Labor

Record the total dollars spent by this operation for cash benefits including life

insurance, health insurance, pensions, Worker’s Compensation, retirement, etc. for 

employees of this operation. If the employees paid a share of some of these items 

and their share was withheld from their wages, the expense for their share should be 

included in Cash Wages.

When the operator or the operator’s spouse was a paid employee of the operation, 

and the operation paid for health insurance for the farm family as a benefit of this 

employment, this is a valid business expense and should be included in this item.

Item 26a – Percentage of Benefits that was for household members

Record the percentage of the total (Item 26) benefits that was for household 

members.

Item 27 – Contract Labor Expense

Record the total amount spent by the operation in the reference year for contract 

agricultural labor. 

Contract workers are paid by a crew leader, contractor, buyer, processor, 

cooperative or other person who has an oral or written agreement with a 

farmer/rancher. Record the total expenses for contract labor used in the reference 

year.

Include:

 contract expenses for workers hired to harvest fruits, vegetables, potatoes, 

berries and all other crops

 other agricultural work which was performed on a contract basis by a 

contractor, a crew leader or a cooperative

 expenses for work done by any custom operator who does not provide his 

own machinery and who was hired on a contract

Exclude expenses for contract construction or maintenance of buildings and land 

improvements. Contract labor expenses for maintenance and repair should be 

reported in Items 15 and 16. Contract labor expenses for all new construction should 

be reported in Items 34-36; land improvements, new buildings/structures, or new 

construction/remodeling of operator’s dwelling.
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5.9.2.6 Custom Work: Item 28

Custom work is work performed by machines and labor when it is hired as a unit. 

Expenses for transporting or hauling animals or other products such as milk to the 

processor go here if the driver and the vehicle are hired together. Loading is 

probably also part of the fee. If only the labor is hired (no machines or vehicles), 

then the expense goes either under contract labor or in total cash wages if the labor 

was seasonal hired labor.

Item 28a – Custom Hauling

Record the total cost for all hauling done for this operation by a custom operator. 

Examples of custom hauling are paying a driver with his truck to haul grain to the 

elevator, livestock hauled to an auction, and milk hauled to a pooling station. At 

this point in the interview you will know enough about the operation to probe for 

specific hauling expenses the operation may have incurred. For example, if you 

are interviewing a dairy farmer, probe to be sure milk hauling is included. Most 

dairies have an expense for custom hauling, but may overlook that expense or 

not consider it “custom” work.

Keep in mind when the payment and commodity transfer occurs when 

accounting for custom hauling expenses. Refer to the header “Expenditures 

Related to Final Commodity Transportation” at the end of the Introduction of this 

section, Page 5-62 to determine which custom hauling expenses related to final 

commodity transfer are recorded in this Item.

Include:

 hauling to market

 hauling between farm/ranch parcels

 milk hauling charges. (If these were deducted from the operator's milk 

check, add them back to get the “total value” figure we want in Section C, 

Item 2e, column 5,Cash Sales and/or Section E, Item 2, Marketing 

Contracts).

 hauling of feed, seed and fertilizer to the operation

 manure hauling

 all other hauling charges for the operation

Item 28b – Other Custom Work 

Most farm accounting record books (and the IRS 1040F) have a line for total 

expense for custom hire (machine work). Custom work is defined as work 

performed by machines and labor hired as a unit. Other custom work on crops 

would include custom planting, harvesting, leveling, and soil testing. Planting by 

plane or helicopter should also be included in this Item.

Exclude:

 contract labor

 custom fertilizer, lime &/or soil conditioner applications (include in Item 2)

 custom applications of crop chemicals and pesticides (record in Items 3 

and 3a) and pest scouting (record in General Business Expenses, Item 
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32)

 leasing of cars, trucks, tractors or other equipment (record in Item 20)

 custom livestock expense (record in Item 8)

Item 29a – Cash Value of Commodities and NON-CASH PAYMENTS Provided to 

Household Members for Farm Work

Record the value of any commodities and non-cash payments provided to members 

of the household instead of payment of actual dollars. The value of the commodities 

is whatever the commodities could have been sold for. Include quantities of grain or 

other crops, head of livestock, or livestock products such as milk provided as a noncash payment to household members.

Exclude living expenses for family members unless the expenses were considered a 

business expense of the operation.

Item 29b –Cash Value of All Food, Goods, & Services Provided as Payment to 

Workers who are NOT Household Members

This question only applies to workers who are not members of the operator’s 

household. The value of heating fuels, transportation, telephone, electricity, clothing 

and furniture supplied to hired workers who are not members of the operator’s 

household should be calculated in terms of what they cost the operator. The value of 

food produced on the farm and furnished to paid workers should be whatever the 

items would have been worth at local prices (at the time they were given to the 

workers).

Operators may not regularly keep records of this type of employee compensation. 

For this reason, the question specifies items which are commonly overlooked by 

farmers in reporting these non-cash payments. Use items such as the value of 

commodities (head of livestock, bushels of grain, etc.) paid to any workers in lieu of 

wages for farm work, including such payments-in-kind. Using these items as probes 

will help the respondent better consider which type and amount of these payments 

were made.

Item 30 – Market Value of Products Used or Consumed on the Operation

Record the estimated MARKET value of all the meat and livestock products, fruit, 

vegetables, berries, firewood, etc. produced and used or consumed on this operation 

during the year. Include products used or consumed by partners and their families 

(e.g., corn used for household furnaces). Exclude home gardens if expenses were 

excluded earlier. Also exclude any commodities provided as payment to household 

members for farm work reported in Item 29a.

Item 30a – Percentage of Market Value of Products that was Livestock

Of the total amount from Item 30, give a percentage of that amount that was from 

livestock or livestock products.
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Item 31 – Fees Paid for Professional or Farm Management Services

Record the amount of money spent in the reference year by the operators and 

partners for professional farm management services related to the management of 

this operation. Report fees paid for accounting, record keeping, tax preparation, 

planning, or farm product advice.

Exclude fees paid for:

 custom fertilizer, lime and/or soil conditioner applications (include in Item 2)

 custom applications of crop chemicals and pesticides (record in Item 3)

 entomologists, service companies, etc, for pest scouting (record in General 

Business Expenses, Item 32)

5.9.2.7 General Business Expenses: Item 32

Show the respondent the list of General Business Expenses in the Respondent 

Booklet.

These expenses are generally recorded in the “other expense” category of most farm 

record books (and the 1040F). They are so varied that when you ask the operator 

for his general business expenses he may say ‘none’ or itemize the ones that come 

to mind or include previously reported data. To gain some consistency in what is 

reported here, read the list of the “Includes” below and have the respondent refer to 

the Respondent Booklet. The purpose of this list is not to have the respondent 

itemize each expense to the nearest penny but to prompt him to consider various 

categories which define what you mean when you ask for ‘other business expenses’. 

List the expense items and amounts in the lines. If an individual item is a fairly 

“large” expenditure, make notes explaining the expense.

Include:

 Travel expenses (such as lodging, meals and parking) associated with 

purchasing or selling commodities for farm, association or cooperative 

business, attending fairs where the respondent's farm products were 

exhibited and other farm/ranch business

 Postage, telegrams, and faxes for the farm business

 Expenses for title searches, abstracts, recording deeds and mortgages, court 

costs and other legal expenses for the land operated

 Fees paid to attorneys in connection with the farm/ranch

 Charges for permits and licenses obtained in the reference year for 

production and marketing of commodities produced on the land operated. 

Exclude quota and allotment purchases and rentals. 

 Fees paid on a voluntary basis to marketing associations or government 

agencies (Federal, State or local) on the basis of sales or production, for the 

promotion of sales or for other specific purposes

 Registration of purebred animals

 Brand registration fees

 Charges for sales promotion or advertising

 Farm management expenses including books, papers and magazines on 

subjects related to crop or livestock production, market reports, farm 

newsletters and Ag bulletins. Report only expenditures for the reference 
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year, even if these cover more than one year.

 Real estate agent commissions and other direct selling or buying expenses

 Garbage collection or dumpster service for barns and farm buildings

 Rental expense for farm office space not on the operation

 Fees paid to entomologists, service companies, etc. for pest scouting

 Fees paid for programs like Boll Weevil Eradication Program (BWEP) and 

Pink Bollworm Program (PBWP) if there is one assessment fee (i.e., peracre) and no additional fees are charged for chemicals. Any additional 

charges for chemicals should be recorded as chemical expenses.

 Trapping club memberships and dues. (Trapping clubs are formed to trap 

predator animals such as coyotes.)

 Stall or space rental fees for farmer's markets

 Parcel post expenses or charges for marketing agricultural products

 Purchases of farm office equipment not placed on a depreciation schedule

 Internet fees, including the cost of having and maintaining a webpage

 Loan origination fees

 Payments to Cooperatives Working Together (CWT)

Exclude:

 Wages paid to farm employees (on the payroll) for bookkeeping (exclusively 

or in addition to other farm work). (WAGES AND SALARIES FOR ALL 

FARM EMPLOYEES SHOULD BE REPORTED EARLIER IN THIS 

SECTION.)

 Gasoline and other vehicle operating expenses

 Taxes paid which were levied for general purposes

 Marketing expenses and check-off fees deducted from sales of commodities 

paid by the operator

 Expenditures for magazine or journal subscriptions for the reference year that 

were paid in other years

 Purchases of farm office equipment if placed on a depreciation schedule

 Potting soil and topsoil for nursery/greenhouse operations (record in all 

“Other Expenses” not previously recorded, Item 45)

5.9.2.8 Marketing Expenses: 

Item 33 – Marketing Charges

The following instructions should be used when completing information on marketing 

charges for the sales of crops and livestock. Include marketing charges paid for cash 

and/or contract sales.

Almost all operations that sell commodities as cash sales or under marketing contracts

have some marketing charges. These are usually deducted from the gross payment, so 

the check the farmer receives already has these charges subtracted. Farmers do not 

generally keep very good records of charges that were already deducted before they 

received their payment checks. Marketing expenses include check-off fees, drying, 

commission, ginning, inspection, storage, transportation, and yardage, etc., and are 

identified on payment vouchers, along with the gross and net receipts. PROBE TO BE 

SURE THAT THESE “HIDDEN COSTS” ARE ACCURATELY REPORTED.
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If the respondent reports that no marketing charges were paid, probe by asking if 

anything was subtracted out of the total price before the buyer wrote the check. If the 

answer is yes, this usually means marketing charges were paid. Be careful not to 

include expenses for production inputs or loan re-payments that were netted out of the 

farmer’s check, these are not marketing charges. If an operation sold commodities but 

truly did not have any marketing charges, make a note of this, or the Regional Survey 

Statistician may want to call you or your supervisor back to verify the information.

If you absolutely cannot get per commodity charges, record the total quantity (and unit) 

sold so the survey statistician has something to use for calculating these charges. 

If you have to use a handout sheet of marketing charge rates (provided by some 

Regional Field Offices), make a note in the margin so the survey statistician knows the 

farmer could not supply this information. DO NOT use these sheets unless the farmer 

cannot supply the information.

All marketing expenses paid by the operation, landlord(s) and contractor(s) for the sale 

of all commodities produced/sold on this operation in the reference year must be 

included. All check-off fees, commercial crop drying, sales commission fees, ginning 

charges, inspection fees, storage fees and expenses (for commodities not stored onfarm), transportation, yardage fees, etc. should be included even if the crop is not yet 

sold. (However, storage-related expenses such as those for LP gas to run on-farm

dryers should be excluded.) If a commodity was not sold from storage, but was returned 

to the operation, out-of-pocket expenses for storage should be included as a marketing 

expense.

Share rentals should be considered a payment for the privilege of marketing the crop 

and should be recorded as a marketing expense. In field crops such as sugarbeets, coop shares are often rented or leased from operators who do not use their share. It is not 

necessary to rent land in order to rent a co-op share. If only land is rented, it should be 

recorded in Section A. But, if co-op share rents are reported be sure the rent payment 

reported in Section A is only for land and not for the land and share rental combined.

Perishable products such as fruits, vegetables and fish often have to be refrigerated or 

iced during storage or transportation. These expenses should be considered marketing 

expenses. 

When promotion or check-off fees are automatically deducted from gross sales of 

commodities such as soybeans, cotton, beef, hogs, or milk, the fee is INVOLUNTARILY 

charged and should be considered a marketing expense. Operations also make 

voluntary payments for marketing and production programs. VOLUNTARY payments 

should be recorded under general farm business expenses (Item 32).

Include fees which are deducted from payment even if the producer has the option of 

applying for a refund (such as a refund from Cotton Incorporated). Refunds of marketing 

expenses should be included as other farm related income in Section H.

Include unit retains for sugarbeets which are deducted by the coop or processor from 

payment even though the producer receives payment from them in future years. 

Refunds of marketing expenses should be included as Cooperative Patronage Dividends 

and Refunds in Section H. 
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Milk & Dairy Products:

Include as a marketing charge the withholding or reduction in price for the Dairy 

Refund Payment Program. Capital Retains should also be included since they are 

cooperative profits withheld and refunded in later years. Refunds of these charges 

should go in Section H.

Exclude milk hauling as a marketing charge. If the hauling charge is netted out in 

the operator’s books, add it back to the total sales value for milk and other dairy 

products. Be sure to note the hauling expense if it is known at this point and make 

sure milk hauling charges are included in custom hauling (Section I, Item 28a). Also 

exclude Cooperatives Working Together (CWT) payments. This is a voluntary 

program and not a marketing expense.

Cotton:

The cost of ginning is usually paid by surrendering the cottonseed to the gin. Often 

neither the ginning expense nor the cottonseed income appears on the farmer’s 

books; however, the value of the cottonseed traded to the gin is technically an 

income item, and the cost of ginning is a marketing expense to the operation. This 

information should appear on the operation’s statement from the ginning company. 

You will have to probe for this information. Occasionally, the cost of ginning is more 

than the value of the seed produced by the cotton. The operation then has out-ofpocket expenses for ginning. If the cost of ginning was less than the value of the 

cottonseed, the operation should have received money for cottonseed. This info 

should be in the operation's record books.

Landlord(s) & Contractor(s) Marketing Expenses

Marketing Expenses paid by landlords and/or contractors MUST also be accounted 

for in the appropriate column.

In most production contracts, the marketing charges are paid by the contractor. 

These expenses may be on the contractee’s settlement sheet. If not, record the 

respondent’s best estimate of the total marketing expenses paid by the contractor for 

commodities produced on the operation under contract.

5.9.3 Capital Expenses: Items 34-44

Capital expenses are expenditures that are typically placed on a depreciation schedule. 

These expenditures may include the purchase of new or used tractors or equipment or 

major repairs, such as installation of a new or overhauled engine, which the operator 

placed on a depreciation schedule. 

Expensing a Major Repair: 

In the case of extensive repairs on capital equipment, the enumerator should follow 

the same action as the operator did. Even though they are not typical capital 

purchases, an operator may place a major repair on a depreciation schedule. If an 
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operator places such an expenditure on a depreciation schedule, then it should be 

recorded as a capital expense. If the operator does not place the expenditure on a 

depreciation schedule, it should be considered a repair and the value should be 

recorded in Section I, Item 14.

USDA’s capital consumption estimate is a measure of the value of capital items used up 

each year in the production of commodities and services. To accurately estimate this 

value, ERS needs to know the full value of capital purchases every year.

Item 34 – Land Improvements

Land improvements are those additions or improvements to the land which change it 

in a PERMANENT way.

Include:

 Expenses for improvements such as terraces, water and sediment control 

basins, grassed waterways, ponds, windbreaks, permanent cover, 

contouring, grading, filter strips, etc.

 Expenses for drainage improvements such as ditches, bedding, shaping, 

subsurface drain tile, etc.

 Expenses for irrigation improvements such as digging wells or ditches

 Expenses for land leveling (removal of irregularities on the land surface by 

the use of special equipment for the purpose of improving drainage, 

achieving more uniform planting depths, more effective use of water and 

greater efficiency in tillage operations)

 Expenses for corrals, feedlots, feeding floors, trench silos, waste facilities, 

wells and equipment not for irrigation

 (In Western states) capital improvements to grazing land

Exclude:

 Land purchases

 New Irrigation equipment or pumps

Item 35 – New Construction and Remodeling of Farm Buildings, Structures, &

Dwellings (excluding the operator’s dwelling)

Record expenditures that were paid in the reference year for the construction of or 

remodeling of buildings, structures, or other dwellings. Record these expenditures 

regardless of whether the construction or remodeling was completed or not. If 

expenses were paid in the reference year for work completed in prior years, include 

them in this Item.

Include:

 all costs for new construction or remodeling of houses for hired farm/ranch 

labor or tenants

 all costs to construct or remodel farm/ranch buildings, storage facilities, 

sheds, silos, bins and similar structures
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Item 36 – New Construction and Remodeling of Operator’s House

Include all costs for new construction or remodeling of the operator's house, if it was 

owned by the operation. “Owned by the operation” means the house is recorded as 

an asset in farm record books or deeded as part of the farm.

Item 37 – Cars (Item Codes 816 & 817)

Record the total cost (after trade-ins, rebates and/or discounts have been 

subtracted) of all the new and used cars bought for use on the operation during the 

reference year in Item Code 816. The total cost should include the cost of 

accessories purchased with the vehicle(s), special servicing, delivery charges, dealer 

preparation, Federal Excise Tax and sales tax. 

If registration and license fees, financing charges and insurance were included in the 

purchase price, include them unless these fees were separate and itemized on the 

bill. Itemized financing charges should be recorded in Item 18. Itemized registration 

and license fees should be recorded in Item 21.

Farm Share Percent—Item Code 817

Often, cars are purchased for both farm and personal (home) use. This question 

is asked to properly allocate the correct amount of the purchase to the farm. 

Farm share can be estimated by determining the percent of total use of the 

vehicle that was for farm/ranch related business. This percentage is the part of 

total cost of the vehicle that is the basis for claiming the depreciation expense on 

the operation’s tax return. If all of the vehicles purchased in Item 37 are strictly 

for farm use, record 100 in Item Code 817.

Item 38 – Trucks(Item Codes 818 & 819)

Record the total cost (after trade-ins, rebates and/or discounts have been 

subtracted) of all the new and used trucks, pick-ups, sport utility vehicles, vans, 

campers, buses bought for use on the operation during the reference year in Item 

Code 818. The total cost should include the cost of accessories purchased with the 

vehicle(s), special servicing, delivery charges, dealer preparation, Federal Excise 

Tax and sales tax.

If registration and license fees, financing charges and insurance were included in the 

purchase price, include them unless these fees were separate and itemized on the 

bill. Itemized financing charges should be recorded in Item 18. Itemized registration 

and license fees should be recorded in Item 21.

Exclude ATVs. ATV expense should be reported in other capital expenditures, Item 

44.

Farm Share Percent—Item Code 819

Often, trucks are purchased for both farm and personal (home) use. This 

question is asked to properly allocate the correct amount of the purchase to the 

farm. Farm share can be estimated by determining the percent of the total use of 
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the vehicle that was for farm/ranch related business. This percentage is the part 

of the total cost of the vehicle that is the basis for claiming the depreciation 

expense on the operation’s tax returns. If all of the vehicles purchased in Item 38

are strictly for farm use, record 100 in Item Code 819.

Item 39 – Tractors 

Record the total purchase price (after any trade-in allowance, rebates, discounts, 

etc.) of all new and used tractors that were bought during the reference year for use 

on the operation. If the respondent’s operation bought tractors in partnership with 

another operation, include only the amount that was this operation’s share of the 

tractor’s total cost. The total cost should include the cost of accessories bought with 

the tractor, special servicing, delivery charges, dealer preparation, Federal Excise 

Tax and sales tax. Registration and license fees should be included in the purchase 

price if they were not separated on the bill. If these fees were separate and itemized 

on the bill, exclude them here and report them in Item 21. Financing charges should 

be recorded in Item 18.

Item 40 – Self-Propelled Farm Equipment

Record the total purchase price (after any trade-in allowance, rebates, discounts, 

etc.) of all new and used self-propelled equipment, implements and machinery that 

were bought during the reference year for use on the operation. If the respondent’s 

operation bought machinery in partnership with another operation, include only the 

amount that was this operation's share of the machine’s total cost. The total cost 

should include the cost of accessories, special servicing, delivery charges, dealer 

preparation, Federal Excise Tax and sales tax. Registration and license fees should

be included in the purchase price if they were not separated on the bill. If these fees 

were separate and itemized on the bill, exclude them here and report them in Item 

21. Financing charges should be recorded in Item 18.

Item 41 – NON-SELF-PROPELLED Equipment, Implements &/or Machinery 

Purchased

Record the total purchase price for all non-self-propelled equipment, implements and 

machinery (after any trade-in allowance, rebates and discounts, etc.) that were 

bought in the reference year for use on the operation. Include purchases of 

livestock, dairy and poultry equipment, (including calf shelters/hutches), new

irrigation equipment and pumps, delivery charges and sales taxes in the net 

expense. If the respondent’s operation bought machinery in partnership with another 

operation, include only the amount that was this operation's share of the machine’s 

total cost.

Exclude expenses for equipment purchased for personal or pleasure use such as 

rodeo equipment.

Item 42 – Office Equipment, Furniture, & Computers

Include all capital purchases (items typically placed on a depreciation schedule) of 

farm office equipment, furniture, and computers. Any such equipment purchased but 
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not typically placed on a depreciation schedule should be included in Item 32, 

“General Business Expenses”.

Item 43 – Purchase of Farmland & Other Farm Real Estate

For the small number of farms that bought farm real estate during the year, the cost 

of that acquisition can have a significant impact on the cash available to farm 

households for consumption or other investment purposes.

Report the number of acres bought during the reference year in Item Code 802

Include only real estate that was added to this farming operation during the year. 

Do not include buildings that were purchased separately and moved onto the farm. 

These should be reported in Item 35.

Report the total cost of the land and buildings acquired. 

Example: the operation added an adjoining section of land to this operation during 

the year, at a cost of $640,000. The land was worth about $600,000 and the service 

buildings on it were valued at $40,000. The operator paid $140,000 down and the 

balance of the purchase was financed by a bank loan of $500,000. Enter $640,000 

here. The value of the real estate would also be included in Section J (Farm Assets): 

the buildings ($40,000) would be included in Item 1c, and the land ($600,000) would 

be included in Item 1e. The loan would be entered in Section K (Farm Debt) with a 

column coded to indicate that a bank loan was obtained in the reference year to 

purchase land.

Item 44 – All Other Capital Expenditures

Record the total cost of all other capital items (items placed on a depreciation 

schedule) purchased by the operation in the reference year. Include major repairs.

Item 45 – All Other Expenditures not accounted for in Section I

Record the total cost of all other FARM SHARE expenses that have not been 

recorded in Section I. Note in the comment box provided the description of the 

remaining expenses and the amount of each expense that summed to the total 

values recorded in Item 45.

Include 

 potting soil or topsoil for nursery/greenhouse operations

 money paid back to the government for government farm program 

overpayments in previous years. For example, a farmer signs up for a 

program surrounding a certain field crop. The farmer gets paid $X in 2014 for 

either a direct payment or counter-cyclical payment. Market price then goes 

up and farmer is asked to pay back some or all of the money that they had 

received in 2015. If the operation’s payment back to the government was in 

the same year as the operation received the money, this should be reflected 

in the income questions in Section H as net income (money received –

money paid back). 
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 donations, for operations which are corporations. If the operation is a sole 

proprietorship, donations are recorded as a family living expense in Section

N.

 expenses used to acquire additional commodity to fulfill marketing contracts if 

the operator had a bad year

 Investments in cooperatives if the investment was made by the operation and 

not the operator or operator’s household (operator and operator’s household 

investment should be recorded in Section N)

 For agricultural operations which have the same books as a winery, include 

such items as wine bottles and yeast in this Item. If the winery is an entirely 

separate operation from the farm, include the costs in the net income from 

operating any other business (Section N).
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5.10 Sections J & K – Farm Assets & Debts

5.10.1 General

What are these Sections for? How is the information used?

Farmers assemble capital assets from several sources. Key sources may include initial 

and subsequent investments made by farm owner(s), retained earnings from previous 

production and/or service activities, borrowed funds, or leased inputs such as land, 

machinery or equipment. Section J gathers information about the assets owned by the 

operation. Section K covers term debt or notes used to purchase or acquire access to 

assets used by the farm.

Data from these sections underlie the farm’s balance sheet. The balance sheet lists the 

farm’s assets, debt, and owner’s equity of the farm at a specific point in time. USDA’s 

accounting procedures set December 31 as the reference date for the farm’s balance 

sheet while the income statement covers the calendar year from January 1 through 

December 31. The balance sheet is essential for estimating profitability and efficiency of 

the farm. Aggregate profitability measures combine income statement and balance 

sheet data in the calculation of rates of return to assets and to equity. Efficiency 

measures relate output per dollar of assets used in production.

The balance sheet shows the amount of “owned” assets the farm used in producing its 

crop and livestock commodities--the real estate, equipment, breeding livestock, 

cooperative investments, and current assets owned by the operation. The owner’s 

equity is equal to total assets of the operation minus any debt that is owed.

The balance sheet excludes assets and debt of agribusiness firms that supply inputs or 

market or process farm products and the value of machinery leased to farmers by agribusiness firms. Leased machinery is considered an asset of the service input sector 

(payments for the flow of services from leased machinery are an expense in the farm 

income account). However, farm machinery owned by a farm operator and leased or 

contracted to another operator is part of the balance sheet.

Correspondence between the length of term of loans and the type of assets held is also 

very important for evaluating the financial position of the farm. If a farm has a large 

amount of current debt (payable or due in a year or less), but few current assets (such 

as cash, accounts receivable, or crop or livestock inventories), the farmer could have to 

liquidate a part of his/her holdings to meet obligations as they come due. This could 

affect the farm’s organization, production decisions, or future profitability. If current debt 

substantially exceeds current assets, farmers may even have to take “fire sale” prices for 

assets put on the market to meet obligations. Therefore the match between types of 

debt and assets, as well as total debts and assets, are important for evaluating the 

financial status of farms.

Assets are economic resources that are used up in the production process. Assets 

expected to be used up or converted to cash within one year of the date of the balance 

sheet are called “current assets.” Examples include cash, financial assets, crop and 

livestock inventories, purchased inputs, cash invested in growing crops, as well as 
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accounts receivable. All other assets (machinery and equipment, buildings, farmland, 

breeding livestock, etc.) are classified as long-term assets.

The farm’s assets are financed or paid for using either debt or the business owner(s)’ 

own funds (equity). Some farms use no debt while others use a mixture of debt and 

equity to buy farm assets. Farm operations that report no use of debt tend to be smaller 

farms as measured by total sales.

Debt data are used to develop indications of debt service charges, which are compared 

with cash available from the farm business (derived from data in Sections B-H), off-farm 

income (reported in Section N), and other sources to assess which types of farms may 

be encountering loan repayment problems due to insufficient income, large debt loads, 

and/or high interest rates. With variable (floating, adjustable) interest rate loans, 

changes in interest rates change farm sector interest costs. Information about how often 

interest rates change helps us to assess the potential risk to operators of higher loan 

payments if increasing interest rates result in their loans being re-priced.

Owner’s equity is equal to total assets less total debt. Owner’s equity is often referred to 

as “net worth” or “net assets.” USDA uses balance sheet and income statement data to 

develop key indicators of financial health and performance for farm businesses.

These indicators include:

 Solvency – debts in relation to assets,

 Liquidity – money available to pay bills as they come due,

 Profitability – the return to management and risk of the farmer in relation to farm 

assets and equity used in production, and 

 Financial Efficiency – how effectively the farm uses inputs to produce crops and 

livestock.

Balance sheets and indicators of farm financial health and performance are reported to 

the Secretary of Agriculture, other policy officials within USDA, and to Congress. Survey 

findings are reported for use by the media, farm organizations, and others with an 

interest in agriculture. Data summaries are also made available to the public through the 

ARMS data tool located on the Economic Research Service web page.

Value of Farm Assets

On average, land and buildings account for nearly three-fourths of farmers’ assets. 

Dwellings on the farm are also assets of the farm operation. These include the 

operator’s house (when it is owned by the farm and included in the books of the 

farm) and hired labor and tenant houses.

In addition to land and buildings, balance sheets include a value for machinery and 

equipment owned by the farm, including cars and trucks. Finally, livestock and crop 

inventories are a large part of the balance sheet for some farms, particularly grain 

and livestock farms.
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Farmers also operate assets leased or rented from others. ARMS is interested in 

determining the value of assets managed by the operation. As the only available 

source, ARMS uses the respondent’s estimate of the value of land, machinery and 

other assets when estimating the total value of assets managed by the operation.

Debt by Lender

These data are used to help establish who is providing funds to meet farmer’s 

borrowing needs. We ask about the loan balance, interest rate, type of loan 

(production, non-real estate, real estate loans for the operator’s dwelling, or other 

real estate loans), and the year in which the loan was obtained. These items are 

used to estimate the farm sector’s debt payments that must be met each year.

Many farmers use farm assets as security for loans for a variety of purposes. For 

each of the five largest loans reported by the operator, we ask what percent of the 

loan was for operating expenses, capital expenditures, or other expenses of the farm 

operation. Responses to the primary purpose of the loans provide information about 

how farm assets are used for farm and family finances.
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5.10.2 Section J – Farm Assets

5.10.2.1 General Instructions

This section is different from the sections before it in the questionnaire because most of 

these questions focus on assets OWNED by the operation. For this section, we define 

assets of the operation as: 

 For individual or partnership operations: the assets belong to the operation 

or to the operator and partners. When the operator and/or partners rent their 

personal assets to the operation, exclude them as assets in this section.

 For corporations: the assets belong to the corporation. 

In this section we ask for the operator’s estimate of the MARKET VALUE of several 

types of assets on December 31 of the reference year. Obtain the operator’s best 

estimate of the current market value of specific assets owned by the operation. If 

operation assets are owned by partners, include the value of assets belonging to all 

partners (exclude the landlord's share).

If the operator has multiple operations, only account for the assets that belong to the 

operation identified on the label. Assets belonging to the other operations will be 

accounted for in Section N. Some operators may use heavy machinery (tractors, 

planters, combines, etc.) for all their operations. For each piece of heavy machinery, 

determine which operation it belongs to by determining which operation uses the item 

most. If the piece of heavy machinery belongs to the operation on the label, account for 

it in Section J. If it does not belong to the operation on the label, account for it in Section 

N.

The “fair market value” (market value) is the price for which the land and/or buildings or 

other assets could be sold under the market conditions existing at the time of the 

reference date and assuming that willing and financially able buyers and sellers exist 

and that there are no unusual circumstances such as forced liquidation, shortages, and 

emergencies.

5.10.2.2 Value of Land & Buildings Owned: Item 1

Item 1 – Market Value of Land & Buildings OWNED

Record the market value for land and buildings. It should be based on highest and 

best use that the land could be sold for, including non-agricultural uses.

This information may not be available in records, but most operators should be 

aware of the current value of their land and buildings or comparable land and 

buildings. If loan funds have been obtained for use in the operation, the operator 

has likely prepared net worth statements for use with his/her lender. The business 

financial statement would be a source for asset value information.
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It is not necessary for the operation to own land in order to own buildings. 

Operations can own buildings that are permanent structures located on rented or 

leased land, or they may own mobile homes, shops or offices located on rented or 

leased land. When this occurs, be sure to include a note in the margin for the survey 

statistician to review.

Item 1a – Market Value of Operator’s Dwelling, if OWNED 

Record the market value of the operator's dwelling as of December 31 if it is 

owned by the operation. “Owned by the operation” means the house is recorded 

as an asset in farm record books or deeded as part of the farm. This definition is 

the same used to report expenses, which makes the income statement and the 

balance sheet consistent.

If the operator cannot give you an estimate of current market value, probe to get 

values of similar houses, or get the replacement value listed for insurance 

purposes.

Item 1b – Market Value of All Other Dwellings Owned

Record the market value on December 31 of tenant and hired labor dwellings as 

well as all other dwellings owned by this operation. This includes 

houses/dwellings of partners, relatives, etc. The dwellings must be owned by the 

operation, not by the partner or relative separately from the land in the operation. 

Item 1c – All Other Farm Buildings & Structures Owned

Record the market value on December 31 of all other farm buildings owned by 

the operation including barns, cribs, silos, equipment shops, grain bins, storage 

sheds and similar type buildings. Exclude processing facilities such as cotton 

gins, packing sheds, commercial elevator facilities, etc. even if they are owned by

and located on the operation, and the books are kept separately. Probe if 

necessary to obtain values, but do not accept “book value” (the original cost of 

the building minus depreciation).

Item 1d – Orchard Trees, Vines, Nursery Trees, & Trees Grown for Woody Crops

Record the market value on December 31 of trees in orchards, vines in 

vineyards, other perennials in the field, Christmas trees, and short-term rotation 

woody crops. Exclude uncultivated acreage in timber – this should be recorded 

with the value of the land in Item 1f.

Item 1e – Oil, Gas, and Mineral Rights

Record the market value on December 31 of natural resources of oil, gas, and 

mineral rights owned by the operation. Exclude production inputs of these 

resources that will be utilized on the operation. This should be recorded with the 

value of the inputs in Item 3.
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Item 1f – Land Owned

Record the operator's best estimate of the total market value of land OWNED by 

the operation on December 31. This should correspond to the acres owned 

reported in Section A, Item 1. Include the value of land rented to others, plus any 

water rights, permanently installed irrigation equipment, frost protection systems, 

grazing permits, uncultivated timber, etc., that go with the land. Verify with the 

operator that the average value per acre is reasonable for the area by dividing 

the amount reported by the number of acres owned. Make a note if very high or 

very low.

Exclude the value of dwellings, buildings and structures, and trees in orchards, 

vines in vineyards, other perennials in the field, Christmas trees, trees cultivated 

for woody crops, and the value of water rights if they were sold.

5.10.2.3 Value of Trucks, Tractors, Machinery, & Stocks: Item 2

Item 2a – Trucks & Cars Owned

Record the end-of-year (December 31) estimate of the market value of the farm 

share of trucks and cars owned by the operation.

Item 2b – Tractors, Machinery, Tools & Equipment Owned

Record the end-of-year (December 31) estimate of the market value of the farm 

share of tractors, machinery, tools, equipment and implements owned by the 

operation. Prices of machinery, equipment and implements change over time. 

Reflect these changes in determining the current market value by using prices that 

would be received for a similar item if traded or sold in the used equipment market.

Item 2c – Stock in Cooperatives & Farm Credit System

Record the value on December 31, of the stock the operation owns in the Farm 

Credit System and all other farm cooperatives. Be sure to include the value of

shares received during the year in lieu of dividends.

As a condition of obtaining a loan, the Farm Credit System may have requirements 

for a borrower to purchase stock in the Farm Credit System. The value of the stock 

is reported here.

5.10.2.4 Value of Beginning/End of Year Inventories: Item 3

We must account for changes in inventories between January 1 and December 31 of the 

reference year if we are to accurately measure net farm income. A portion of cash sales 

in any year may come from commodities produced in prior years, and carried into the 

reference year as inventory. Some of this year’s production may remain in inventory at 

the end of the year. Accurately measuring net farm income to reflect this year’s 

production must account for changes in inventory levels between January 1 and 
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December 31. For that reason, we ask beginning and ending inventory values for crops, 

livestock, and production inputs.

Obtaining estimates of the value of assets such as stored crops, livestock, and inputs on 

January 1 and December 31 is critical to development of accurate estimates of 

profitability for farms. The change in input inventories is important to calculate the 

balance sheet, which is the wealth of the farm and an indicator of profitability.

There are three main criteria you should guide the respondent toward considering in 

providing answers to beginning or ending year inventory values: 

1) the types of commodities or production inputs

2) the quantity of each type on hand at the beginning and end of the year

3) their market prices on the two dates in question (BOY and EOY)

The most accurate figures would be obtained if we collected all these pieces. This may 

not be possible; thus it is acceptable for you to get the operator’s best estimate of the 

market value of commodities or production inputs on hand at the beginning and the end 

of the year. Still, ask the respondent to think about differences in the quantity of crops, 

livestock or inputs on hand in January and December (for example if more crops were 

stored, or crops were sold, or inputs were purchased or used up in production) and 

prices that could have been received for the commodities in January versus December 

and the prices that would have been paid for inputs on hand.

If the operator says the market values were the same, YOU MUST PROBE for the 

commodity/input types, the quantity, livestock weights, and the market price on the date 

in question. This will ensure as accurate figures as possible. If the respondent says 

values were the same even after probing for additional information, make good notes of 

the reason why they were the same so the survey statistician understands the situation 

and will be in position to write a good explanatory comment. 

The value of commodities held in inventory relate to the figures reported earlier in the 

questionnaire for crop production (but crops can be stored for several years and 

inventories may include previous year’s production), the amount (of crops) used on farm 

or the quantity (of livestock) sold, and the sales data reported in Sections B-E. If the 

commodity was produced in the reference year (or if livestock was bought in the 

reference year – see reporting of livestock purchases in Section I) but not sold or used 

on farm, it should be in ending inventory and its value would be recorded here.

In most cases, the value of commodities or production inputs on hand at the 

beginning of the year should not equal their value at the end of the year. Many 

farms operate in the same production and sales pattern each year. It is likely they will 

have crops on hand in January from the previous year that then are sold in the current 

year and crops on hand from the current year’s production on December 31. After 

finding out the value at the end of the year, you should ask about the value at the 

beginning of the year. Do not say, “Was it (about) the same?” or “It was about the same, 

was it not?” Instead, probe for changes in quantities on hand, for prices for which 

commodities could have been sold, or for prices that would have been paid for inputs 

bought for farm use.
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Item 3a – Value of CROPS Owned

Record the operator’s best estimate of both the beginning of year and end of year 

market value of all crops stored on or off the operation. Be sure to consider the 

quantity on hand and market prices on the date in question. 

Include all types of crops including those for which there are Government programs 

as well as non-program crops.

Include the value of:

 all crops owned by the operation whether stored on or off the operation

 hay and silage crops

 crops produced in the current and earlier years stored in whole (original) form

 mature standing crops not harvested by December 31 due to weather or 

market conditions. This is an “alternate storage issue” and an estimated 

value for these crops should be recorded if they were originally intended for 

harvest as of December 31.

 crops (in whole form) to be used for feed, seed, sales, etc.

 all whole grains on hand

 all crops purchased in whole form

 crops owned by the operation which were produced under a contract but not 

removed as of December 31

 crops in storage which had been redeemed from CCC loan as of December 

31

 nursery and greenhouse products in saleable condition

Exclude the value of:

 crops still under CCC loans. Exclude the crop only if it was placed under 

loan and was still under loan on either of the reference dates of January 1 or 

December 31 of the reference year

 feed items such as cracked corn, rolled oats, etc. (record under production 

inputs Item 3d)

 growing crops

 Exclude crops that were sold and are already recorded as receivable income 

in Section G because the revenue was deferred. 

Items 3 (b & c) – Value of Livestock Owned

Record a total value for beginning-of-year (BOY) and the end-of-year (EOY inventory 

for livestock.

For livestock, you also need to consider their weights or size on January 1 to get the 

market value of the beginning-of-year inventory and on December 31 to get the 

market value of the end-of-year inventory. It is highly unlikely that all of these things

are the same at the end of the year as they were at the beginning of the year. The 

number of head and the number owned on December 31 were reported in Section C. 

Use the responses to items in these sections to obtain end-of-year values. 

Beginning-of-year values should be in comparison to the end-of-year values.

For example, number of head may be different, or prices may be different, or weights 
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of the animals may be different on the two reference dates. Changes in any one of 

these items between January 1 and December 31 would result in inventory values 

being different in December than they were in January.

Include the value of:

 all animals held for resale

 beef and dairy cows, bulls, steers, heifers, calves and any other cattle

 hogs and pigs

 sheep and lambs

 horses, ponies and mules

 goats

 chickens, ducks, geese, guineas, pigeons, etc.

 fur bearing animals

 catfish, crawfish and other fish

 bees

 other specialty livestock

Exclude the value of:

 livestock on hand not owned by the operation

 animals owned for pleasure use only (except equine)

 livestock owned by this operation, but being produced by another operation 

(grown by others) under contract. The value of these animals is collected in 

Section D and are “in the fence”. 

Item 3b – Breeding Livestock

Record the operator’s best estimate of both the beginning-of-year and end-ofyear market value for all breeding livestock (including dairy animals) and poultry 

owned by, and located on or off, the operation. Exclude breeding livestock 

being produced on another operation under contract. The value of these animals 

is collected in Section D and are “in the fence”.

Be sure to consider the quantity on hand, their size or weights, and the market 

prices on the date in question. Breeding livestock animals are considered noncurrent assets on an operation’s balance sheet. They reflect a long term 

investment. 

The number of head on hand as well as owned on December 31 was reported in 

Section C. For the end-of-year value, ask the respondent about January 1

values, multiply by the EOY inventory, and keep in mind changes in numbers, 

weights, and prices.

Item 3c – Value of Non-Breeding Livestock Owned

Record the operator’s best estimate of both the beginning-of-year and end-ofyear market value for all non-breeding livestock (including dairy animals) and 

poultry owned by, and located on or off, the operation.

For livestock, compare BOY and EOY, as you consider animal weights, size, or 

age on January 1 and December 31 and get the market value for each date. It is 
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highly unlikely that these values will be the identical. Be sure to consider the 

quantity on hand, their size or weights, and the market prices on the date in 

question. Non-breeding livestock (calves, heifers, and steers) held in inventory 

for sale within the next year are considered current assets on an operation’s 

balance sheet.

You can use the number of head and the number owned on December 31 were 

reported in Section C and multiply by the weight and/or price. But you will have to 

rely on the respondent to supply information for BOY values. 

Item 3d – Value of Production Inputs Owned

Record the operator’s best estimate of both the beginning-of-year and end-of-year 

market value of inputs owned by this operation. Include such things as processed 

feed, fertilizer, chemicals, fuels, purchased seed and other supplies, etc. Exclude

the value of any items that should be reported in Item 3a (hay, crops to be used for 

seed, etc.) Do not include fertilizers and chemicals already applied (record in Item 

3e).

Prices of many inputs such as fuel and fertilizer could have changed during the year. 

An estimate of the quantity on hand on January 1 and price paid at that time and the 

quantity and price at year end will likely result in the value of inventory being different 

for these two time periods. The change in the value in input inventory on hand will 

be very important in helping put production costs into perspective and in helping 

explain estimates of net farm income for farm businesses. Sometimes these assets 

can vary greatly due to pre-purchases for next year.

Item 3e – Production Inputs Already Used for Crops or Livestock (Sunk Costs) 

or Value of Inputs Used for Production Contracts yet to be Delivered

Why do we ask this question?

Growing crops represent a substantial investment and have a significant impact 

on a farmer’s balance sheet. As purchases of fertilizer, seed, herbicide, gas, 

labor, etc. are made and the resources used, either cash is diminished or 

liabilities are increased. These kinds of changes by themselves can affect how 

current assets of the farm are viewed relative to debts owed by the operation. It 

is important that an asset value still be shown. One method is to assume these 

cash inputs transformed into growing crops, do in fact have a value; that is, 

someone would pay to acquire such resources during the year. For a December 

31 balance sheet and a winter wheat crop, this means a value should be placed 

on the growing crop. Since the actual market value is hard to determine, actual 

cash invested in the crop is used as the balance sheet value. 

Record the amount spent up through December 31 for physical production inputs 

(seeds, fertilizers, pesticides, etc.) for all cover crops and crops planted but not 

harvested as of that date. Also include the amount spent for fertilizers and 

pesticides already applied to benefit a crop that had not been planted yet as of 

December 31. This is important because the cost of the fertilizers and/or 

pesticides applied prior to December 31 would be considered an expense of the 

farm and would reduce net income from a cash perspective. Recording the value 
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of the inputs applied as an asset would be reflected in the balance sheet and in 

the change in asset values that is included in the estimate of overall net income 

and profitability of the farm.

Sunk Costs and Production Contracts

If the operator has a production contract and is still completing the growing cycle 

for that commodity on either January 1 or December 31 there will be sunk costs 

that would be reported in this question. If the operator has a production contract 

in Section F and non-owned livestock on the operation on December 31 in 

Section C, there will be sunk costs that would be reported in this question. The 

sunk costs for this operation (who is a contractee) is the money that the 

operation has already spent (and not been reimbursed) for the contract livestock 

or vegetables that are growing on the operation on the reference date that have 

not been reimbursed.

The respondent should report the sunk costs for the non-owned livestock or 

vegetables on the operation on December 31 (livestock from Section C) in the 

December 31 column. If the respondent had non-owned livestock or vegetables 

on the operation on January 1 the sunk costs associated with those commodities 

should be reported in the January 1 column.

These sunk cost values need to be accounted for to get a more accurate picture 

of how the farm is doing economically. If they are not accounted for, there will be 

expenses in the reference year with no corresponding income or potential 

income (recorded as an asset).

Include the value of inputs already applied to:

 winter or spring grain crops which had been planted by December 31

 feed, labor, fees, etc. used on farms with crop or livestock production 

contracts for non-owned commodities

 nursery crops

 greenhouse crops

 mushrooms, fruit or vegetable crops

 cover crops

 material applied to the land to benefit a crop to be planted after December 

31

Exclude the value of inputs to:

 crops already harvested and on hand (these crop values should be 

recorded in Item 3a)

 crops such as Christmas trees, fruit trees, etc. where the value of the crop 

is included in the value of the land in Item 1 above

 mature standing crops not harvested by December 31 due to weather or 

market conditions. This is an “alternate storage issue” and an estimated 

value for these crops should be recorded in Item 3a if they were originally 

intended for harvest as of December 31
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Sunk Costs for Processed Vegetables Operations:

can be reported by recording either:

 the percentage of the fee due for the processed vegetables not yet 

harvested and removed based on time on the operation from 

placement to the reference date.

 the value of utilities, labor, fuel, and other expenses utilized. Keep in 

mind that the contractor typically provides the seed, fertilizer, and 

chemicals. In this case, seed, fertilizer, and chemicals would not be 

accounted for here as the contractee does not pay for it.

Sunk Costs for Feedlots:

can be reported by recording either:

 The value of net weight gain (portion of feed, fees, etc. not yet 

recovered from the contractor) for fed cattle not yet removed from the 

feedlot.

 the value of feed, vet care, labor, fuel, and other expenses utilized for 

fed cattle not yet moved from the feedlot, or

Sunk Costs for Broilers & Hogs:

can be reported by recording either:

 the percentage of the fee due for the broilers or hogs not yet removed 

based on time on the operation from placement to the reference date. 

 the value of utilities, labor, fuel, and other expenses utilized. Keep in 

mind that the contractor typically delivers the feed, vet, and 

sometimes bedding to the farm. In this case, feed, vet, and bedding 

would not be accounted for here as the contractee does not pay for it.

5.10.2.5 Other Farm Assets: Item 4

Record the operator's best estimate of the market value of all other assets of the 

farm/ranch. These can be known as “Liquid Assets”.

Almost every operator should have some other farm assets!!

Include the value of:

 cash, bonds, certificates of deposit, savings and checking accounts belonging to 

the operation

 hedging account balances

 government payments due

 balance of land contract sales

 money owed to the operation (other than that reported in Section G, Accounts 

Receivable/Deferred Payments)
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 quotas and allotments owned by the operation, if these values are not reflected in 

the land values reported in Item 1

 livestock products stored on the operation, but not yet sold (for example, milk 

before hauling)

 money owed to this operation (except money owed from commodity sales and 

eggs still on the operation)

Exclude the value of:

 assets for which values were obtained earlier in the questionnaire

 personal assets (record in Section N)

 personal debt owed to the operator
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5.10.3 Section K – Farm Debt

Farmers use debt to help obtain assets used by the operation to produce crops or 

livestock or to provide a range of business services such as custom work, recreational 

activities, or livestock grazing. Estimates of debt are used to measure how solvent the 

business is (debt/assets) at a point in time. Estimates of debt are also used to develop 

estimates of interest and principal that have to be paid that can be compared with 

income earned by the farm (reported in earlier Sections of the questionnaire). Debt 

service needs relative to income earned is used to prepare measures of financial 

position reported by USDA for U.S. farms.

All farm household and business debt should be recorded in either Section K or in 

Section N and recorded only once. Loans used for both farm and household purposes 

should be reported in Section K and not in Section N. Section K is organized to reflect 

farmers’ use of debt in their businesses. The organization of this section is intended to 

provide the large share of respondents who do not report use of term debt or notes from 

creditors a more streamlined interview.

If the operator has multiple operations, only account for the debt that belongs to the 

operation identified on the label (there should be assets for these items in Section J and

expenditures for inputs and/or capital purchases in Section I). Debt belonging to the 

other operations will be accounted for in Section N. For example, some operators may 

use heavy machinery (tractors, planters, combines, etc.) for all their operations. For 

each piece of heavy machinery, determine which operation it belongs to by determining 

which operation uses the item most. If the heavy machinery belongs to the operation on 

the label, account for its debt in Section K (Using the same guideline, asset values will 

have been included in Section J). If the heavy machinery does not belong to the 

operation on the label, account for its debt in Section N.

Item 1 – Debt Use 

This is a screening question to determine if debt was used at any time during the 

reference year.

Include:

1) Any debt that was obtained from earlier years and was not paid off by 

January 1 of the reference year

2) Any amounts used from established lines of credit

3) Loans taken out in the reference year and repaid in the reference year

4) Loans taken out in the reference year and not fully repaid in the reference 

year

If debt was used at any time during the reference year, check “Yes” for Item 1, and 

continue with question 2. If debt was not used at all during the year, check “No” for 

Item 1, then skip to Section L.

Item 2 – Loans Taken Out & Repaid in the reference year

This item includes only loans taken out and entirely or partially repaid during the

reference year. For example, if an operation took out a $100,000 operating loan and 
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had repaid all but $20,000 by the end of the year, record $80,000 in Item 2 as the 

loan amount taken out and repaid during the year. Record the $20,000 debt balance 

in the Item 3 table.

Loans acquired through access to “lines of credit” would be reported in Item 2. Any 

outstanding balance on December 31 would be reported in Item 3 following the same 

instruction as provided for the above example.

Responses to this question helps us gauge the share of farms that use debt during 

the year but do not have any debt outstanding at year end and provides help in 

evaluating the amount of interest paid by the operation.

5.10.3.1 Debt by Lender: Item 3

If the operation had debt at the end of the reference year, the table in this item must be 

completed. Include debt on the operator’s house only if it was owned by the operation. 

Refer to Section J, Item 1a to determine if the operator’s house was owned by the 

operation and included in assets. Record line of credit balances outstanding at the end 

of the year in the same manner as any other conventional loans.

Start completing the table by asking about the largest loan. Work down the rows in the 

table for each loan, starting with the largest loan owed and working down to the 

smallest loan owed, for up to five loans. 

Some debt may be used for both farm and household purposes. For example, the 

proceeds of a loan may be used in part to remodel a kitchen that is not part of the farm 

operation, and in part to purchase equipment used on the farm. Report such loans in 

this section, and report the percentage of the loan balance used for the farm business in 

column 7. Do not report such loans in Section N.

Be sure the respondent excludes debt entirely for non-farm purposes even if the loan 

was secured by the operation’s assets. For example, a loan for a child’s education with 

the farm as collateral would NOT be reported in this Section. The amount of this offfarm debt secured by farm assets is to be reported in Section N, Item 4. Include all other 

debt owed by the farm that is secured by farm assets.

Column 1 – Lender

Refer the respondent (and yourself) to the list of Lender Codes below the Item 3 

table on the questionnaire.

There is no need for the respondent to report specific firms or persons with whom 

he/she has loans, such as ‘First State Bank of Iowa’ or ‘my mother-in-law’. By 

encouraging the respondents to look at the questionnaire, you are assuring them 

your interests are in obtaining what types of loans are typical in their state, not where 

they personally have obtained loans to finance their operations. Typically, lenders 

will be grouped to provide reports by lending institutions, trade creditors, individuals, 

etc.
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Enter the Code for the lender type from whom the operation obtained a loan. If more 

than one loan is owed to the same lender, record the loans separately if possible.

Report as Farm Credit System debt (Code 1) any loans from the Federal Land Bank 

Association, Production Credit Associations, Agricultural Credit Associations, or any 

other organizations through which Farm Credit System loans are made.

USDA’s Farm Service Agency (FSA) has taken over the lending functions of the 

former Farmers Home Administration (FmHA). FSA provides credit to farm 

operators through direct loans and through guarantees of loans made by private 

lenders. Use Code 2 only for direct loans made by the former FmHA and/or the new 

FSA. For loans made through private lenders but guaranteed by FSA, use other 

Codes, such as 5, 6, and 7, etc. Exclude loans borrowed against the cash value of 

life insurance policies from Code 7. Record these type loans under “any other 

lenders”, Code 15.

Report as contractor debt (Code 11) any loans from corporations, cooperatives, 

partnerships, individuals, or other organizations for which this operation produces or 

markets any commodity or product under contract. Poultry and other livestock 

contractors may provide financing for the construction of facilities and for the 

purchase of feed and other inputs. Similarly, fruit and vegetable processors may 

finance seed, specialized machinery, and packing and on-farm processing facilities 

for producers who grow for them under contract.

For Code 12 and Code 13, lenders are individuals; however, there is a difference in 

the two types of loans. For Code 12, (individuals from whom land in the operation 

was bought under a mortgage or deed of trust) title to the land transfers immediately. 

For Code 13, (individuals from whom land in the operation was bought under a land 

purchase contract) title to the land transfers after a specified portion of the purchase 

price has been paid, or after a certain amount of time has passed.

Report credit card debt (Code 16) only for credit card balances outstanding at the 

end of the year. The farm press frequently reports on the dangers farmers face in 

charging feed, seed, and other inputs on credit cards to gain frequent flier miles and 

other affinity program benefits, with the intention of refinancing these purchases 

during the credit card grace period. Exclude credit card purchases that were paid 

from an equity credit line or rolled into other debt before the end of the year. The 

balance owed to the bank, or other lender, should be reported in the table instead. 

Exclude any outstanding credit card balances not related to the operation of the 

farm business.

Farmer Mac guarantees the timely payment of principal and interest on securities 

backed by qualified loans or guaranteed portions, and either retains those securities 

in its portfolio or sells them in the secondary capital markets. Securities retained in 

the Farmer Mac portfolio and serviced by the institution are not reported by 

originating lenders who no longer hold the debt. If a loan is known to be held by 

Farmer Mac enter the amount using code 17.

In the United States, credit unions are not-for-profit organizations that exist to serve 

their members rather than to maximize corporate profits. Like banks, credit unions 

accept deposits and make loans. Credit unions have expanded membership in 
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recent years and become an attractive alternative lender for both mortgages and 

vehicles. Report loan activity with credit unions using code 18.

Include as other debts (Code 19) the farm share of all unpaid bills. Unpaid bills are 

a current liability of the farm operation.

Column 2 – Balance Owed

Record the end-of-year balance remaining to be paid. Include both principal and 

unpaid interest which was delinquent. Obtaining an accurate estimate of the balance 

that farmers owe on any loans taken to acquire assets is critically important. The 

amount of debt owed by farmers helps drive the development of financial indicators 

and perspectives about the financial health of farm businesses. Reported debt, for 

example, forms the numerator of the debt-to-asset ratio developed for farms. 

Reported debt is also used to assess the capital structure of farms, indicating what 

portion of assets is owned by the farm family and what share is owned by creditors.

Include any interest which was unpaid and/or delinquent. Exclude any “future” 

interest that will be owed and accrued interest that was not delinquent.

Column 3 – Interest Rate

Enter the interest rate associated with the loan balance recorded in Column 2. Rates 

should be entered to the nearest basis point (hundredth of a percent), such as 10.25, 

9.50, 8.00 or 6.75 percent. You can have debt recorded with a zero percent interest 

rate if no interest is charged. This is most common with very short term debt, 

although it is sometimes found with debt owed to family members. Write a note of 

explanation whenever the interest rate is zero.

Column 4 – Loan Type

Select one of the 4 choices in the “Loan Types” list below the Item 3 table on the 

questionnaire that best describes the type of loan that the respondent has. Line of 

credit balances will most often be designated as “production loans” but in some 

cases may be included as non-real estate or real estate loans.

Production loans refer to seasonal loans that farmers typically borrow to finance the 

production of a commodity, and repay when the commodity is sold.

Non-real estate loans (longer than one year) refer to machinery, equipment, and 

breeding livestock loans that the farmer will repay over a number of years.

Select code 3 for real estate loans over one year in the form of mortgages on the 

operator’s dwelling, provided the dwelling is owned by the farm operation. If the 

dwelling is included in loans reported, the amount of debt associated with the 

dwelling should also be reported in Item 5. 

Use code 4 for other real estate loans over one year, which refer to loans secured by 

farmland. These loans may be for any purpose, but typically are repaid over a period 

of 10-20 years. 
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To help respondents who may not know, the first determination for loan type is 

whether a loan is a real estate loan or a non-real estate loan. This determination 

should be based on whether or not a mortgage is held. The determination between 

non-real estate and production loans should be based on length of loan. Loans 12 

months or more should be classified non-real estate (code 2) and those less than 12 

months as production/operating loans (code 1).

Column 5 – Year Loan was Obtained

If the loan has never been refinanced, enter the 4-digit year the loan was obtained. If 

the original loan was refinanced, record the year in which it was refinanced.

Column 6 – Original Term of Loan

If the loan has never been refinanced, record the original term of the loan. If the 

original loan was refinanced, record the number of years for which it was refinanced. 

If less than a year is owed on any loan, round up to 1 year.

Column 7 – Percent for FARM Expenditures

If the loan was obtained entirely for farm expenditures, this item should be 100. If 

part of the loan was used for non-farm purposes, enter the percent of the original 

loan which was used for operating expenses, capital expenditures or other expenses 

of the farm operation.

Reminder: If the respondent attempts to report 0 percent for a loan in this table, 

verify if the loan is actually for farm expenditures. If no part of the loan is for farm 

purposes, the entire loan should be removed from the table.

Column 8 – Purpose of Loan

Check below the Item 3 table on the questionnaire for the “Loan Purpose Code” list. 

Respondents have seven choices for the purpose of the loan. Record the purpose 

that reflects the respondent’s primary use of loan funds for the farm.

1) Purchase real estate (land and its attachments)

Include:

 Farm and home improvements

 Building construction

 Construction of livestock and poultry facilities

 Grove development and rehabilitation

 Mortgage for the operator’s dwelling (if owned by the operation)

2) Purchase feeder livestock

3) Purchase other livestock

4) Other current operating expenditures such as:

 Current crop production
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 Care and feeding of livestock including poultry

 Labor, seed, feed, fertilizer, grove caretaking, repair, and 

maintenance

5) Farm machinery and equipment

6) Debt consolidation

7) Other

Column 9 – Fixed or Variable/Adjustable/Floating Rate Loan

Record whether the loan was a fixed rate (Code 1) or a variable/floating rate loan in 

column 9. Response to this item will provide a basis for measuring the share of farm 

debt that may be affected by changes in lending rates.

If the loan is a variable/floating rate loan, indicate how often the rate is re-priced. 

Select code 2 if the loan is re-priced monthly; 3 if quarterly; 4 if annually; and 5 more 

than annually. Responses to this question will help determine how sensitive existing 

farm loans are to changes in interest rates.

Item 4 – Outstanding Balance of Additional Loans

Space is provided to record details for up to five loans in the Item 3 table. If the 

operation had more than five loans with balances outstanding at the end of the 

reference year, enter the total dollar amount owed on loans in addition to the five 

identified in the table.

Item 5 – Debt Owed for Operator’s Dwelling

This should be the portion of debt from all of the loans listed in Item 3 and 4 that is 

specifically for the operator’s dwelling. If the operator’s dwelling is not owned by the 

operation this item should be zero and no debt for the operator’s dwelling should 

have been included in Items 3 and 4. 
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5.13 Sections L—N: Farm Management & Household Information

Sections L to N provide information on farm business organization, farm business 

strategies, operator household characteristics and operator household incomes. 

Information on the economic well-being of farm households is needed to evaluate the 

effects of current and proposed policies that affect farms and rural areas. The questions 

in these sections provide information on the relationships between farm people and their 

farms. No other source of data is available to illustrate how the financial situation of the 

farm and farm household varies among operators and households. These sections also 

provide data to identify the farm’s management, including whether decisions are made 

by one person or a team.

A key function of management is planning: how the farm will be organized; what to 

produce and how to produce it; what types of equipment to use; whether to hire labor; 

and how to market commodities or products produced on the farm. A key to farm 

competitiveness is the adoption and use of cost effective practices by producers.

It is well known that many operators and household members work off-farm. Section N

provides information on off-farm incomes. This allows us to develop a key economic 

indicator--the level and source of household income from all sources, farm and nonfarm. The estimate is also used to help determine the debt repayment capability of 

farmers, considering both the amount of debt owed to all lenders and income from all 

sources.

The economic well-being of farm households is affected not only by income from all 

sources (farm and non-farm) but also by the debt they owe and whether income can 

adequately support the basic needs of the farm household without having to draw down 

assets or sell the farm or a part of the farm. We combine off-farm income, household 

asset, and debt data in Section N with farm business income and balance sheet data 

from Sections A through K to assess the economic well-being of farm households.

Information is collected on assets and debt of the farm household not connected to the 

farm business. Non-farm assets and debt also affect the economic well-being of the 

farm household. Non-farm debt must be paid from the farm household's income. The 

household’s overall financial status depends in part on non-farm assets and non-farm 

debt. Moreover, farmers can decide to use farm business assets as collateral for nonfarm loans, and they can use non-farm income and assets to acquire farm business 

assets and to pay expenses for the farm. Thus, a full understanding of financial health 

of farms in today’s agriculture requires information on the finances of both the farm 

business and farm household.

Some farms support more than one family. Income sharing among partnerships and 

farm corporations are obvious, but income generated from farms operated as individual 

proprietorships may also go to support multiple households. As a result, it is not 

accurate to assume that all of the farm business income goes to the farm operator 

household. Instead, we estimate the operator household’s share of net farm income, by 

asking how many other households shared in the net income of the farm operation and 

the percentage of the net income received by the operator’s household.
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Knowledge of age, gender, education, ethnicity, race, and major occupation from 

Sections L-N, helps USDA determine how farm household well-being varies across 

different demographic groups, and to identify the extent to which different groups 

participate in farming. USDA now has programs targeted to beginning farmers and 

ranchers and so knowledge of when a farmer began farming, reported in Section L, 

helps USDA know more about the target population.

Data on household expenditures (Section N) are used for important purposes including:

1) For inclusion into the Indexes of Prices Paid.

2) To estimate farmers’ debt repayment capacity (family living expenses are 

deducted from net income to determine how much is left over to replace 

equipment and to repay outstanding debt).

3) To understand the relationship between household income and family living 

expenses as well as how farm families adjust to changes in prices received for 

crops and livestock, in production, and in the costs for inputs such as fertilizer, 

fuel, and labor.
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5.13.1 Section L—Farm Management and Use of Time

Item 1 – Ownership Interest by Blood, Marriage, or Adoptive Relatives

Report whether the operator and persons related to the operator by blood, marriage 

or adoption own more than 50 percent of the assets of this farm or ranch operation. 

Consider only farm or ranch assets owned – not rented or leased – by this operation, 

and exclude the assets held by non-family landlords and contractors.

Check ‘Yes’ for Item 1 if this is the case. Check “No” if this is not the case.

Persons related to the operator by blood, marriage, or adoption may live outside the 

operator’s household.

DO NOT include non-family landlords, contractors, or lenders as those with 

ownership interest. The purpose of this question is to accurately classify farm 

operations as family farms, because sometimes family members who share the 

ownership of the farm do not all live in the same household.

Item 2 – Number of Owners of the Operation

Report the number of owners for the farm operation in Item 1. Do not count 

landlords, contractors, or lending institutions that may have a lien on the operation.

Item 2a – Percent Ownership Interest in Operator’s Household

Report the farm asset ownership interest for this operation, in percentage terms, 

that the operator and those living in the operator’s household have in the farm 

operation. The purpose of this question is to develop an estimate of the farm’s 

contribution to the net worth of the farm household. The total net worth of the 

farm household is calculated by adding its share of the net worth of the farm 

business to its non-farm net worth (from Section N).

Item 3 – Operation’s Legal Status

In this item we want to record the operation’s legal status as a business organization. 

This does not mean how decisions are made for the operation on a day-to-day basis. 

Therefore, the answer to this question may be different than the answer to the 

question on day-to-day decision-making in the screening section of this 

questionnaire. Responses to this question are used for a variety of purposes 

including classifying farms in the U.S. Department of Commerce’s National Income 

Accounts and estimating after-tax income. Report the organization used for tax 

purposes, using the designated code.

1) Family or Individual (Sole or family proprietorship):

A farm operation that has no partners and no shareholders. The proprietor is 

personally liable for all the firm’s obligations. The proprietor, who is regarded as 

self-employed, bears all the costs and keeps all the after-tax profits, filing IRS 
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Form Schedule F. As a result, the operator typically does not have a fixed salary 

recorded in Section I, Item 24a. Any operator who insists that they receive a 

salary in Section I, Item 24a and is an individual operation should be noted for 

the office.

Individual operations include a single-member Limited Liability Company (LLC) 

taxed as a sole proprietor. Consider an operation that is operated as a husbandwife team to be a sole proprietorship, unless it is legally organized as a 

partnership or some other legal form.

2) Legal Partnership:

Farm business operations owned by two or more persons who agree to abide by 

a partnership agreement. Partners must be owners but do not need to be 

identified as an operator. The partnership agreement sets out how management 

decisions are to be made and the proportion of the profits to which each partner 

is entitled. Exclude arrangements that do not involve jointly operating a farm or 

ranch, such as landlord-tenant arrangements.

Partnerships include general partnerships where all partners bear unlimited 

liability for the operation’s debts as well as most Limited Liability Companies 

(LLCs) with more than one member and Limited Liability Partnerships (LLPs). 

The partners pay personal income tax on their share of the profits. Formal, legal 

partnerships file IRS Form 1065. Note that not all LLCs are treated as 

partnerships; LLCs can also consist of only one member, where that member can 

be either an individual or a corporation.

Partnership Questions – (Item 2 a-b)

a – Registered Under State Law

For partnerships, answer the “YES”/“NO” question as to whether the 

partnership is registered under State law.

b – Number of Partners

For partnerships, record the number of partners in the operation in this 

item.

3) C – Corporation:

Indicate whether or not the corporation is a C–Corporation. Generally, a 

corporation is a business entity chartered under a State or Federal statute, or 

under a statute of a federally recognized Indian tribe, if the statute describes or 

refers to the entity as incorporated or as a corporation, body corporate, or body 

politic. It is also regarded as a corporation if the business entity is organized 

under a State statute and described by the statute as a joint-stock company or 

joint-stock association. For the purpose of Federal taxation, corporations are 

defined specifically under instructions for IRS Form 8832 (Entity Classification 

Election). C-Corporations also include single-member limited liability companies 

(LLC) taxed as a C-Corporation.
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A corporation is legally separate and distinct from its owners (called share- or 

stockholders). The corporation is formed by filing articles of incorporation with 

the authority, which returns it with a certificate of incorporation; the two 

documents together become the corporate charter. The corporation is regarded 

by the courts as an artificial person and thus may own property, incur debts or 

make loans, sue or be sued, own assets and pay taxes.

The corporation’s chief distinguishing features are: 

1) Limited liability—owners (shareholders) can lose only what they invest;

2) Easy transfer of ownership through sale of shares of stock;

3) Continuity of existence: i.e.; the operation does not cease to exist when 

one or more of its owners die.

The most important aspect of a corporation is limited liability. That is,

shareholders are not held personally liable for the corporation's debts. 

Shareholders elect a board of directors who appoint and oversee the 

management of the corporation. Although a corporation does not necessarily 

have to be for profit, the vast majority of corporations are set up with the goal of 

providing a return for its shareholders.

Corporations pay Federal income taxes. Corporations must file income taxes 

separately from its owners. C-corporations file IRS Form 1120. Owners pay 

individual income tax only on money they draw from the corporation in the form 

of salaries, bonuses, and dividends.

4) S – Corporation (Small Business Corporation):

Indicate whether or not the corporation is an S–Corporation. The “S-Corporation” 

(for Small Business Corporation) is a form of corporation that meets certain 

requirements (see IRS Form 2553). This gives an S-Corporation the benefit of 

incorporation while being taxed on the same basis as a partnership or sole 

proprietorship. This means that any profits earned by the corporation are usually 

not taxed at the corporate level, but rather at the level of the shareholders. 

However, an S-Corporation may still owe tax on certain income. S-Corporations 

also include single-member Limited Liability Companies (LLC) taxed as an SCorporation, reporting income and expenses on Form 1120S.

5) Other:

If this operation is any other kind of organization not readily classified in the 

above-mentioned categories, check the “Other” box. Some examples are:

 Estate – Undivided property still in, or subject to, probate.

 Trust – The farm is operated by a person as trustee for someone else 

who is not of age, or may be in a hospital, institution, or is otherwise 

unable to carry on his/her own business. Estate or trust may be further 

defined as a property administered for the benefit of another individual or 

organization. Estate or trust may also be defined as a fund of money or 

property administered for the benefit of another individual or organization.
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 Cooperative – Non-taxable business organization formed to eliminate 

“the middleman” and which exists for the production and/or marketing of 

goods owned collectively by the members who share in the benefits.

 Grazing Associations – A corporation or cooperative mutually operated 

for the purpose of aiding in the conservation, restoration, improvement, 

development and utilization of natural forage resources where a grazing 

area has been acquired for joint use by its members.

Item 4 – Limited Liability Company

Check ‘Yes’ for Item 4 if the operation is organized as a Limited Liability Company 

(LLC) under State law. Check “No” otherwise. How a farm is treated for tax 

purposes does not change the fact that the business is legally a Limited Liability 

Company.

A LLC is a business organization which provides limited liability for the owners at the 

State level. Some States may recognize Limited Liability Partnerships (LLPs) in 

which the individual partners are protected from liabilities of the partnership.

Most LLCs with more than one member are generally considered partnerships for 

both Federal and State tax purposes. When a LLC has only one member, the fact 

that it is a LLC is ignored or “disregarded” for the purpose of filing a Federal tax 

return. If a single member of a LLC is a corporation, it is treated as a C-Corporation 

or an S-Corporation, depending on its charter. If the only member is an individual, 

the LLC is treated as a proprietorship for tax purposes, unless an election to be

treated as a corporation is made.

Item 5 – Number of Households that Shared Net Farm Income

Determine if any households, other than the principal operator’s, share in the net 

farm income of the operation. If so, record the number of households that shared the 

net income from the farm business in item 5a.

Item 6 – Is Operation a C-Corporation?

Report whether this operation is a C-Corporation OR an LLC that chose to file as a 

C-Corporation.

If this Item is checked “Yes”, continue on to Item 6a.

If this Item is checked “No”, skip 6a and go to Item 6b.

Item 6a – Income Received from C-Corporation

Record dividends received by operator’s household from the Farm Operation 

if the operation is a C-Corporation.

Note: After answering Item 6a, skip Item 6b and proceed to Item 7.
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Item 6b – Income Received by Household from Farm Business, Except if 

the Farm is a C-Corporation

Record the percent of the farm operation’s net income the operator’s 

household is entitled to receive if the operation is not a C-Corporation.

Item 7 – Individuals Involved in the Day-to-Day Decisions

Record the number of operators, or individuals involved in the day-to-day decisions 

for this operation. Enter the number of operator(s), including the operator listed on 

the front of the questionnaire. Include family members if they are also operators. 

Exclude hired workers unless one or more are hired managers considered to be 

operators.

Item 8 – Presence of Spouse of Principal Operator

Ask if the principal operator had a spouse at any point during the year. If so, check 

“Yes” and continue, otherwise check “No” and skip to Item 10.

Note: This item is checked heavily in the Regional Field Office against the 

spouse questions throughout the questionnaire for consistency. Make 

notes about any inconsistency.

Item 9 – Is the Spouse an Operator

If the operator had a spouse (Item 8 is “Yes”), ask if the spouse made or helped 

make day to day decisions for the operation at any point during the year. If so, check 

“Yes”, make sure the spouse is counted as an operator in Item 7, and record the 

spouse’s information in the Operator 2 column for Item 10. 

Item 10 – Top 3 Operator Characteristics

The operators are those persons responsible for the day-to-day management 

decisions for this operation, including hired managers. In the event there is more 

than one person involved in the day-to-day decisions, three columns are provided to 

record the names and characteristics of up to three operators. The name of the 

principal operator should be listed first. The principal operator is the person in 

charge, such as a hired manager, business manager, or other person primarily 

responsible for the on-site, day to day operation of the farm or ranch business. If the 

principal operator has a spouse who also makes day-to-day decisions, include 

him/her as operator 2. 

Item 10a – Full Name of Operator

Identify the operator(s) in the columns provided and respond to each item for each 

operator. If there were more than three operators, identify the three most senior 

operators. Keep in mind that if the most senior operator has a spouse who makes 

day-to-day decisions, their name has to be included in the 2nd column.

Exclude hired workers unless one or more were hired managers or a family 

member was also an operator.
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Print the name(s) of the operator(s) in the response area.

Item 10b – Gender of Operator

Indicate if the operator listed at the top of the column is male or female.

Item 10c – Age of Operator on December 31

Report the age of the operator listed at the top of the column on December 31.

Item 10d – Year Operator Began to Operate ANY Operation

List the four-digit year that the operator(s) first became involved in the day-to-day 

operational decisions on ANY farm. This information is used to determine if 

farmers are “beginning farmers”.

Labor—Item 11 

These items record the hours of labor used in farming, and provide the information 

(1) to estimate the labor required to produce agricultural products, (2) to study the 

effects of agricultural policy changes, and (3) to measure the well-being of farm 

households. The data obtained from these questions are the only information about 

the total hours worked on the farm, whether paid or unpaid, collected on an annual 

basis. 

Labor Used in Agriculture:

Labor is an important input in agriculture. About half of the labor used in agriculture 

is provided by farm operators and their families. Most of the time farm families do 

not pay themselves a wage or salary. The collection of this data pictures how 

respondents use their time and allows for an estimate of the cost of using it in the 

production of agricultural products. Regardless of who is providing labor, the 

operator’s family or others, the labor hours could be either paid or unpaid. Labor 

expenses associated with hired labor are reported in Section I. 

Policy Analysis:

Information on how labor is allocated is also used to study the effects of different 

policies. Policy changes can affect how much agricultural output is produced and the 

supply of product affects the prices farmers receive for their product. One way in 

which policies affect agricultural output is through their effects on how farm families 

spend their time.

Farm Household Well-Being:

Farm families can allocate their time to a variety of activities, some of which earn 

them income and some of which do not. In addition to working on the farm, the 

majority of farm families have someone in the household who also works off the 

farm. Since most of the income of most of the farm families comes from working off 

the farm, knowing both where families spend their time and where they earn their 

income provides policy makers and others with an understanding of the returns to 
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farming compared to other activities of the household and leads to a better 

understanding the well-being of farm operator households.

Item 11a – Operator Hours of Farm/Ranch Work

Ask the respondent to report the operator’s average hours per week working on the 

farm/ranch, for the four different 3-month periods. The respondent should be able to 

approximate the average number of hours per week in each quarter because the 

quarters roughly correspond to the four seasons. 

These items should be recorded for the principal operator, whether they are hired 

managers or not. Record all of the hours of farm work, even for operators who only 

work for a few hours a week on the farm (bookkeeping, running errands, etc.). 

Include all work done for the farm business. Some respondents may say they do 

not spend any time working on their operation. This is particularly true of those 

whose entire operation is enrolled in the CRP. These respondents should count the 

time spent on oversight, paperwork, filing income tax forms, and even the time spent 

completing this interview! Section I, Item 23 instructions give examples of 

agricultural work, and principal operator respondents should include hours spent in 

any of these activities. There should almost always be hours worked in at least one 

quarter for every operation. Record the hours of work regardless if they are paid or 

unpaid hours. If there are hours reported for a wage or salary, there should be cash 

wages to the operator reported in Section I. 

Item 11b – Operator’s Spouse’s Hours of Farm/Ranch Work

Record all of the spouse’s hours of farm work, even for spouses who only work a few 

hours a week on the farm (bookkeeping, running errands, etc.). Include all work 

done for the farm business. Some respondents may say that the operator’s spouse 

does not spend any time working on their operation. This is particularly true of those 

whose entire operation is enrolled in the CRP. These respondents should count the 

time spent on oversight, paperwork, filing income tax forms, and even the time spent 

completing this interview! Section I, Item 23 instructions give examples of 

agricultural work; all hours spent by the operator’s spouse in any of these activities 

should be included. Record spouse’s hours of work regardless if they are paid or 

unpaid hours. If there are hours reported for a wage or salary, there should be cash 

wages to the spouse reported in Section I.

Item 11c – Other Household Members and Other Operators’ Hours Working for 

Farm/Ranch 

Record the hours all other household members, and all operators other than the 

principal operator and spouse, worked on the farm/ranch. Include both paid and 

unpaid hours. Other operators include those persons responsible for the day-to-day 

management decisions for this operation, and may include hired managers. Other 

household members may include other operators. If multiple people fit this 

description, record the TOTAL average number of hours worked per week. For 

example, if there are two other operators who worked an average of 42 and 24 

unpaid hours per week, as well as a family member who worked 15 paid hours per 

week, the correct entry for this item is 81 hours. Do not include the hours of the 
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principal operator and spouse, which should be reported in Items 11a and 11b

respectively.

Item 11d – Other Unpaid Labor Hours

Ask of all other workers, i.e. all workers who were not operators or household 

members.

Record the sum of hours per week provided by other unpaid workers who worked on 

the farm, who were not operators and not household members. 

Item 11e – Other Paid Labor Hours

Ask of all other workers, i.e. all workers who were not operators or household 

members.

Record the sum of hours per week provided by other paid workers on the farm, who 

were not operators and not household members.

Item 12-13 – Number of Workers and Non-Farm Labor Hours

Items 12-13 are research questions that are unique to the 2015 ARMS III survey. 

Please see the Appendix for Section L for item by item interviewer’s assessment.
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5.13.1.1 Direct Sales

Direct sales include those (1) sold directly to consumers, for example at farmers 

markets, and those (2) sold to consumers through intermediate channels, such as 

restaurants. Previous statistics based on ARMS data show the importance of marketing 

through intermediate channels. Intermediate channels are important due to their volume 

and other markets, like farmers markets, are important because of their AMS/USDA 

program focus. These channels are addressed in Items 14 – 18.

Item 14 – Direct Sales to Individual Consumers for Human Consumption, Retail 

Outlets, or to Institutions

The goal of these items is to collect information for farm operations who marketed 

their products to consumers through short supply chains. That includes farms that 

market directly to the final consumer of the product but it could also include farms 

that market to a business or institution known to market directly to the final 

consumer. More specifically, check yes if the operation produced any agricultural 

products that were sold directly to

 (14a) individual consumers for human consumption (exclude home 

consumption items used by the farm family and exclude items provided to 

farm workers and reported in Section I). Include sales from roadside stands, 

farmers markets, pick your own, door to door, and Community Supported 

Agriculture (CSAs).

 (14b) retail outlets that sold directly to individual consumers for human 

consumption (include retail outlets only if they are known to sell the products 

directly to individual consumers for human consumption), or regional 

distributors that sold directly to individual consumers for human consumption 

(including local food hubs, Community Supported Agriculture (CSAs), and 

other local foods aggregators known to sell the products directly to individual 

consumers for human consumption), or 

 (14c) institutions (such as schools and hospitals) that provide dining services 

to consumers.

The most difficult marketing option to identify can be the regional distributor. If the 

farm operation does not know if the farm products will be sold by the regional 

distributor directly to an individual for human consumption, then these sales should 

not be included here. For example, a farmer may market to a local food aggregator 

who is known to sell the farm products at a farmer’s market and those sales would 

be included here (and below in 15d). However, a farmer may also market directly to 

a regional distributor and not know whether or not the distributor is delivering the 

farm items to the final marketplace, and these should not be included here (or in 

15d). Note that some regional distributors are delivering farm products to large retail 

distributors, such as Walmart, who are selling these local farm products directly to 

consumers. If the farmer knows this is the case for the farm products being 

marketed through a regional distributor, then those should be recorded.
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What is direct marketing through a CSA? A Community Supported Agriculture (CSA) 

arrangement consists of a community of individual consumers who pledge to be a 

regular customer to a farming operation, or a cooperative of farming operations,

thereby allowing the growers and consumers to share the risks and benefits of food 

production. While CSA arrangements vary widely, they usually consist of a system 

of weekly delivery or pick-up of vegetables and fruit and sometimes include dairy 

products and meat.

Include commodities reported in Section E if sold or produced under contract for any 

of the above channels. Include such practices as sales from roadside stands, 

farmer’s market, pick your own, door to door, direct Internet sales, etc. 

Exclude non-edible products such as Christmas trees, flowers, and craft items.

Exclude processed products such as jellies, sausages, and hams; sales of these 

value-added goods should be reported in Section H, Item 3j.

If the operation did not sell any agricultural products directly to the above channels, 

skip to Item 16.

Item 15a-e – Sales Directly to Consumers or Through Other Outlets by a Marketing 

Contract or a Cash Sale

Record the sales in whole dollars that were directly to consumers and/or short supply 

chain outlets through a contract or as a cash sale. See explanation of marketing 

channels above for Item 14a-c. The five market categories are:

a) Sales directly to consumers at farmers markets.

b) Sales directly to consumers from on-farm stores, u-pick, road-side stands, or CSAs.

c) Sales to a local retail outlet, e.g., restaurant, grocery stores.

d) Sales to a regional distributor, e.g., local food aggregators (the aggregator sources, 

consolidates, and transports products to the final market).

e) Sales to a local institutional outlet, e.g., schools, hospitals.

For each of the five sales categories, please report in column 1 for “Crop Commodities” 

and in column 2 for “Livestock Products and Livestock Commodities”.

Item 16 – Sales of Value-Added Crops, Livestock, or Products

Record the gross value of sales of value added crops, livestock, or products 

produced and sold by the operation. Examples are beef jerky, fruit jams, preserves, 

floral arrangements, cider, wine, etc. Note that this is a subset of Item 3j in Section 

H.

Item 17 & 18 – Non-Food Direct Sales

Check “Yes” if any products were grown or raised for direct sale to an individual 

consumer, retail outlet or regional distributor, which were not intended for human 

consumption (e.g. hay, nursery commodities, Christmas trees, horses, etc.) If Item 

17 is “Yes”, record the gross value of sales received for those items during the year 

in Item 18.
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5.14 Section M—Farm Operator & Household Characteristics

The information in this section is about the principal operator and principal operator’s 

spouse as defined in Section L. If a spouse was reported in Section L, make sure to 

answer Items 1-4 for both the operator and spouse.

Item 1 – Spanish, Hispanic, or Latino Origin

Mark the appropriate box as to whether the principal operator or spouse is of 

Spanish, Hispanic, or Latino origin or background, such as Mexican, Cuban, or 

Puerto Rican, regardless of race.

Item 2 – Operator’s Race

Mark one or more races to indicate what the principal operator or spouse considers

himself/herself to be.

Item 3 – Highest Level of Formal Education

Check the box representing the highest level of school completed by the principal 

operator and spouse. Vocational school, secretarial school, etc. should not be 

counted as formal education unless the credits can be transferred to a college or 

university. A 4-year college graduate is considered as a B.S. or B.A. degree and 

should be coded “4”. An associate degree should be coded as a “3”.

Item 4 – Major Occupation

If the principal operator or spouse spent the majority (50% or more) of his/her work 

time in this or other farming/ranching operations during the year, mark the “Farm or 

ranch work” box. Work other than farming/ranching means at an off-farm job or 

business for compensation.

Item 5 – Retired from Farming

In the opinion of the principal operator, mark whether the operator is retired from 

farming/ranching.

Item 6 – Number of People in Household

This question provides information about the number of people who depend on the 

farm household for income and are affected by its current financial situation.

Record the total number of people living in the operator’s household on December 

31. Include the operator, spouse, children, and others living in the household. Also 

include those who are dependent upon the household for the majority of their 

support, whether they are living in the household or not. This would include students 

who are away at school, if they depend upon the farm household for support.
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Item 7-8 – Health Insurance

Items 7-8 are research questions that are unique to the 2015 ARMS III survey. 

Please see the Appendix for Section M for item by item interviewer’s assessment.
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5.15 Section N—Farm Operator Household Income, Assets & Debt

Item 1 – Off-Farm Income (Cash Income from Sources Other Than This Farm 

Operation)

To understand the economic situation of agriculture, it is important to know how 

much outside income is available to farm/ranch households. The request for income 

by total household income, operator, and spouse, for Items 1a, 1b, and 1c

recognizes that there can be multiple sources of income for the household by each 

household member, and that the contribution of each should be included. Ask for 

income received by source, including wages or salaries from off farm work, income 

from operating another farm or any other business, cash or share rent from other 

farming operations, interest, dividends, capital gains/losses from the proceeds of 

sales other than from this farming operation, retirement, social programs, and other 

sources. The breakout is to assure that income from each of these sources is 

considered by each respondent. This also allows us to analyze how the composition 

of income may be affected by differences in operator or farm characteristics and to 

align farm and off-farm income with the hours worked on and off the farm.

For the categories of off-farm income, record the value code that represents off-farm 

income for the operator, operator’s spouse and the household for the year or the 

total for the household for Items 1d-1j.

Include:

 the principal operator 

 all other members of the operator's household. If an operator lives with 

parents, or other adults, any income earned by these household members 

(Social Security, off-farm jobs, net income from other farms, etc.) must be 

included.

Exclude:

 landlord’s share

 other partners in a partnership, unless they lived in the same house as the 

operator

Note: If no income was received (zero income), “1” MUST be entered. When using 

value codes a code “1” indicates zero. If NO spouse was reported in the 

previous sections, please leave the entire spouse column blank.

Item 1a – Off-Farm Wages or Salaries

Report the off-farm wages, salaries, and tips before withholding separately for 

the operator, operator’s spouse and the household.

Items 1b-1j – Other Sources of Income

Report the other sources of income separately for the operator, operator’s 

spouse and the household for Items 1b and 1c. For Items 1d-1j, report total 

household income.
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Item 1g – Proceeds From the Sale of Farm and Non-Farm Capital Assets 

Include the proceeds from the sales of capital assets of this farming operation. 

Include the proceeds from the sales of farm assets of other farming operations 

and the sale of non-farm capital. Include the proceeds received from selling an 

easement (i.e., a permanent or long-term (30-year) easement, sale of 

development rights, mineral rights, cropping rights, etc.) or other partial interest in 

land. Generally, an easement permanently restricts use of the land and the 

landowner typically receives payment in one lump sum. For example: The 

operator sold a rental house in town for $100,000. The house had a mortgage of 

$50,000 at the time of sale. At settlement, (ignoring real estate commissions and 

other closing costs) the mortgage was paid and the operator received a check for 

$50,000. The total proceeds from this sale are $50,000. 

Item 1g (i) – Recognized Gain/Loss on the Sale of Farm & Non-Farm Capital 

Assets

There may be tax consequences when a capital asset is sold. Certain assets 

can be exchanged for “like-kind” assets in tax-free transactions. Report 

recognized taxable gain/loss associated with the sale of farm assets, assets 

from other farms, and non-farm assets here. Include gains or losses from 

selling an easement (i.e., a permanent or long-term (30-year) easement, sale 

of development rights, mineral rights, cropping rights, etc.) or other partial 

interest in land. Gains/losses on the sale of capital assets are essential in 

estimating an after-tax farm household income measure. Gains/losses are 

computed as the difference between the sale price and the seller’s tax basis 

in the property (cost plus improvements less accumulated depreciation). In 

the example above, the operator sold the rental house for $100,000; it had a 

$50,000 mortgage. If the operator had originally paid $40,000 for the house, 

spent $10,000 on an addition, and had taken $15,000 in depreciation, the 

basis in the house would be $35,000 ($40,000 + $10,000 - $15,000). As a 

result, at the time of sale the operator would have a recognized taxable gain 

of $65,000 ($100,000 sale price less $35,000 basis).

However, sellers often defer the payment of these taxes, under certain 

conditions, by purchasing a replacement property in a tax-free exchange. 

Ask the respondent if the sale of the property involved a tax-deferred like-kind 

exchange. Section 1031 and Starker exchanges are common forms of likekind exchanges.

Item 1h – Income from Private Pensions & Disability Payments

Record the value code representing the amount of private pensions and disability 

payments.

Item 1i – Income from Public Sources

Record the value code representing the income from public sources. Examples 

of public sources include Social Security, Public Retirement, Veterans Benefits, 

Unemployment, and other income from public sources.
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Item 1j – Other Off-Farm Income

Record the value code representing the off-farm income from sources other than 

the ones mentioned above.

Item 2a-j – Household Spending 

Because farm businesses and households are linked, household expenditures 

are important to understand the financial viability of both the farm business and 

household. Expenses are reported for the year for each general category.

5.15.1 Non-Farm Assets Owned by Operator & Household: Item 3

This question applies to the non-farm assets of the operator's household for which data 

was not previously reported. Assets of the operation were reported in Section J. 

Include the value of the operator’s dwelling here if it is owned separately from the 

operation and excluded from farm business assets.

Record the value code which includes the value of assets owned by the operator and 

members of the operator’s household SEPARATELY from the operation on December 

31.

Item 3a – Financial Assets in Non-Retirement Accounts

Record the value code which includes the value of household financial assets held in 

non-retirement accounts. Income generated by assets in non-retirement accounts is 

generally taxable in the current year. Such accounts include CDs, mutual funds, 

stocks, bonds, taxable brokerage accounts, and money market accounts. Include

the cash value of life insurance policies.

Item 3b – Financial Assets in Retirement Accounts

Record the value code which includes the value of household financial assets held in 

retirement accounts. Income generated by assets in retirement accounts is generally 

NOT taxable in the current year. Such accounts include Regular IRAs, Roth IRAs, 

401(k)s, 403(b)s, Keogh accounts and other tax-deferred accounts. Investments in 

these accounts generally include financial assets that can also be held in taxable 

accounts.

Item 3c – Operator’s Dwelling

Record the value code which includes the value of the operator’s dwelling if it is not 

owned by the operation and recorded in Section J. Exclude other personal use 

homes, such as vacation or second homes.

Item 3d – Real Estate

Record the value code which includes the value of any other farms, residential rental, 

commercial, industrial, or other real estate owned by members of the operator’s 

household. Include other personal use homes, such as vacation or second homes.
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Item 3e – Other Businesses

Record the VALUE CODE which includes the value of any other businesses that are 

not part of this farm. 

Item 3f – All Vehicles

Record the value code of the non-farm share of all vehicles. Include such items as 

RVs as well as non-farm share of cars and trucks.

Item 3g – Other Assets

Record the value code which includes the value of any other assets not reported 

elsewhere. Furnishings are an example of what would be reported here.

Non-Farm Debt

Item 4 – Non-Farm Debt

Debt is classified as business or household depending on the purpose of the 

loan. All farm and household debt should be recorded in either Section K or in 

Section N Item 4, and recorded only once. Item 4 applies to the operator's 

household only, not to the operator's farm business. 

Record the value code which includes the value of debts owned by the operator 

and members of the operator's household SEPARATELY from the operation on 

December 31.

Exclude loans obtained for farm and household purposes that were reported in 

Section K, or household debt, credit cards, etc. used to finance farm business 

expenses. Report all such debts in Section K.

Item 4a – Mortgages on Operator’s Dwelling

Record the value code which represents the amount of household mortgage 

debt on the operator’s dwelling, if not owned by the farm operation. Include

home equity loans, and other lines of credit secured by the operator’s 

dwelling. Exclude if the purpose of the line of credit was for this farm 

business; it should be recorded in SECTION K, not in Item 4.

Item 4b – Mortgages on Other Real Estate

Record the value code which represents the amount of household debt for 

other real estate properties, such as other personal homes, residential /

commercial properties, and other farms. Include other personal homes. 

Include any lines of credit secured by other real estate. Exclude if the 

purpose of the line of credit was for this farm business; it should be recorded 

in Section K, not in Item 4.
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Item 4c – Other Businesses Loans

Record the value code which represents the amount of debt associated with 

non-farm business loans. These businesses are independent of the farming 

operation.

Item 4d – Personal Loans

Record the value code which represents the amount of household debt in the 

form of personal loans such as credit card debt, auto loans, medical bills, and 

unpaid taxes. Exclude if the purpose of the credit card debt was for the farm 

business; it should be recorded in Section K, not in Item 12.

Item 4e – Other Off-Farm Debt

Record the value code which represents the amount of household debt other 

than what has been mentioned above.

Item 5 – Non-Farm Debt Secured by Farm Assets

The purpose of this question is to examine the effect that non-farm debt has on 

the financial ratios of the farm business, specifically on debt/asset and 

debt/equity ratios.

Record the value code which represents any debt owed by the operator’s 

household for non-farm business purposes (as the respondent noted in previous 

question), which used any farm assets (such as farmland or any other assets 

reported in Section J) as collateral or security.

5.15.2 Previous Year Income: Items 6-8

The definition of a Limited Resource Farm requires two consecutive years of sales, 

operating income, and off-farm income data. Items 6-8 ask for previous year data so 

Limited Resource Farms can be identified when combined with the current report.

Item 6 – Total Value of Farm Sales in Previous Year 

Record the value code which represents the respondent’s best estimate of the total 

value of farm sales in the previous year.

Item 7 – Net Operating Income in Previous Year 

Record the value code which represents the respondent’s best estimate of net 

operating income for the farm in the previous year. In cases where the respondent 

reports a negative value for net farm income in the previous year, indicate a minus 

sign before the value code. For example, code "-3" for losses between $500 and 

$999.
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Item 8 – Total Off-Farm Income in Previous Year 

Record the value code which represents the respondent’s best estimate of total offfarm income in the previous year for the operator and the operator’s household 

members. In cases where the respondent reports a negative value for total off-farm 

income in the previous year, indicate a minus sign before the value code. For 

example, code "-3" for losses between $500 and $999. Total off-farm income should 

include all of the income sources listed in the current year off-farm sources, except 

for the sales of capital assets and the capital gains from the sales of those capital 

assets. Include such items as Social Security, private pensions, and/or other 

retirement payments.
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5.16 Conclusion

Item 1 – Survey Publication

After completing the interview, ask the respondent if he/she would like to receive a 

copy of the survey results. The Farm Production Expenditures Report will be 

published in August. Check “1” for YES.

The respondent can also receive reports by subscription free of charge direct to their 

e-mail address. If the respondent would like to subscribe, the respondent should go 

to the NASS Home Page at www.nass.usda.gov. In the “Publications” drop down 

menu, select the appropriate link under “Receive Reports by Email”.

Item 2 – Respondent Information

Please record the respondent’s name and phone number in case you or your 

Regional Field Office needs to re-contact them to verify or clarify a question.

Completion Date – (Item Code 9910)

Record the date the questionnaire was completed. Enter the date in MMDDYY

format on the lines provided in Item Code 9910. For example, if the interview was 

completed on February 26, 2016, enter 02 26 16 in the date cell. 

Thank the respondent for taking the time out of their busy 

schedule to fill out the ARMS Phase III.
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5.17 Administrative Items

The following items are located under Item 4 and need to be filled out prior to turning the 

questionnaire in to your Supervisor or sent to the State Office.

Ending Time – (Item Code 0005)

Record the ending time (military time) of the interview.

Exclude the time you spend reviewing the questionnaire or verifying 

calculations by yourself after you have completed the interview. Be sure the 

ending time is after the beginning time entered on the face page.

Accurate reporting of interview time (beginning and ending time) is critical for 

monitoring and evaluating survey burden and cost.

Total Time in Hours – (Item Code 0008)

For Interviews that require multiple contacts (personal or phone), you should 

write the date and time the interview began in a note on the face page.

If more than one person was interviewed to complete the interview, times should 

reflect the approximate total time for the questionnaire.

Accumulate the hours and minutes of interview time and write the total on the 

back page in the 0008 box. This box is filled out in tenths of an hour, so a 90-

minute interview would be reported as 1 hour and 5 tenths.

If Item Code 0008 is used, there is no need to record a beginning or ending 

time.

Response Code – (Item Code 9901)

Upon completion of the interview, enter the Response Code in Item Code 9901 on 

the Back Page of the questionnaire. Response Codes are:

Code 1 = Complete (Good Reports, Out-of-Businesses, and Abnormal Farms)

Code 2 = Refusal

Code 3 = Inaccessible / Incomplete

Respondent Code – (Item Code 9902)

The Respondent Code identifies the person who was interviewed. Enter the code 

identifying the person who provided most of the data in Item Code 9902.

Code 1 = Operator or Manager

Code 2 = Operator's Spouse

Code 3 = Accountant or Bookkeeper

Code 4 = Partner

Code 9 = Other
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Record the respondent's name and phone number in Item 4.

Mode Code – (Item Code 9903)

The Mode Code (Item Code 9903) identifies how the person was interviewed.

Code 1 = Mail

Code 2 = Telephone

Code 3 = Face-to-Face

Enumerator Number – (Item Code 9998)

Record your 5-digit enumerator ID number in Item Code 9998.

Optional Use

Item Codes 0093, 0003, and 0009 (located on the front and back pages) are 

reserved for your State Office use. These cells should remain blank unless your 

State Office directs you otherwise.

S/E Name

Sign your name in this box.

Review the entire questionnaire before forwarding it to your Supervisor or the 

Regional Field Office. Make sure all items are complete, including ‘Yes’ and ‘No’ 

boxes checked, and dashes are entered in cells when the response is ‘None’ or 

‘No’ as appropriate. Make sure notes are present and complete for unusual 

situations.