Crop prices can affect farm productivity through input- output decisions. This study assesses the relationship between crop prices and productivity changes among a sample of Kansas farms. The changes in total factor productivity are evaluated using a nonparametric approach with a Malmquist productivity index and potential drivers of technical efficiency and productivity change are analyzed. Farms with higher leverage and greater diversification are likely to be more efficient and experience productivity change. Lower productivity occurred during years with higher crop prices, suggesting that innovation is more likely to occur when margins are tight.
Canales, Elizabeth; Bergtold, Jason S.; and Featherstone, Allen
"Farm Efficiency and Productivity Growth: The Effect of Commodity Prices,"
Journal of Applied Farm Economics: Vol. 4
Available at: https://docs.lib.purdue.edu/jafe/vol4/iss1/3