Row crop agriculture in Arkansas makes up a significant portion of total state agricultural income. In 2005, Arkansas row crop agriculture added $1.9 billion dollars to the $6.9 billion dollars of total agricultural output. Cotton production contributed $494 million dollars or approximately 26% of total row crop agriculture (USDA-NASS). Across the state, the major row crops grown are soybeans, rice, and cotton while corn, grain sorghum, and wheat round out most of row crops grown.

Similar to other southern cotton states, Arkansas cotton producers have been hit hard in recent years by dramatic price declines for U.S. cotton, rapidly rising costs of production, and strong international competition. In an effort to better analyze impacts to our cotton producers originating from changes in commodity price and production costs, the Arkansas Representative Panel Farm Project has been expanded to include representative farms that produce 1) all cotton, 2) diversified cotton, rice, and soybeans, and 3) all rice-soybeans in their operations.

These representative farm models were created from panels of farmers using a consensus building approach rather than averaged individual farm or census data. This approach results in a representative farm that is recognizable and at the same time relevant for each panelist and typical grower in that region, while preserving a high degree of anonymity for the individual farm panelists. These representative farms were developed from detailed farm data (including enterprise, operations, costs, finances, machinery, marketing, etc.) collected from each producer panel. The representative farms were processed using deterministic and stochastic simulations from the FLIPSIM model (Richardson), Agricultural and Food Policy Center (AFPC) and baseline agricultural and economic projections, Food, Agricultural and Policy Research Institute (FAPRI). Note that representative farm analyses are anchored to a baseline of projection for the farms. This approach allows producers and policy makers a benchmark for comparing and interpreting policy alternatives and a starting place for future analyses of policy alternatives.

The objective of this study is to develop a baseline projection to be used to determine the viability of Arkansas crop agriculture.