How do farm managers decide which crops and livestock to produce?

Farm managers determine which crops and livestock to produce by integrating information from biological, physical, and social sciences to organize their operations for maximum production and profit. This decision-making process involves several key factors:1

• Resource Evaluation: Managers analyze their specific resources, including soil capabilities, land size, capital, and available labor. They evaluate the legal description of the property, field layout, and proximity to markets and supply sources.12
• Economic Analysis: Managers draw on agricultural economics to monitor prices, market trends, and agricultural policies. They estimate potential yields and apply current market prices to calculate profit potential.12
• Risk Management: Because agricultural markets are volatile, managers may choose to specialize in one product to benefit from large-scale production or diversify their enterprises to spread risk. They may also utilize futures markets to lock in prices for commodities or livestock feed.3
• Technological Integration: Managers assess new crop varieties, cultivation techniques, and improved livestock breeds—often supported by research from government agencies or private firms—to improve yields and reduce production risks.12