ABSTRACT
Statistics of income by type of farm document the prominence of the multiproduct farm. In 1982, farms primarily engaged in the production of cash grains derived almost 20 percent of total cash receipts from the marketings of other crops and livestock. Marketings of crops accounted for a similar percentage of cash receipts of farms primarily engaged in livestock production. The cost of growing one crop depends on the aggregate amount of chemicals purchased. Output decisions will again be linked, in this case, through the interaction of input costs. Analysis of product-specific activities independent of other farm production cannot capture the critical substitutions between inputs or outputs. In technical terms, a separate production (cost) function should not be specified for each commodity produced since such a production (cost) function is not well defined. Thus collection of data on all activities on the farm and the use of multiproduct behavior models significantly expands the capability to conduct policy analysis.
