FINANCIAL STRUCTURE OF CANADIAN AND US FARMS, 1989 AND 1991

This study compares the financial structure of Canadian and U.S. farms in 1989 and 1991 to better understand changes in farm financial struc ture which could emerge from a freer trade environment. The financial characteristics of U.S. and Canadian farms exhibited clearly distingui shable patterns in 1989 and 1991. On a per farm basis, U.S. and Canadi an farms were most similar in terms of total asset value and operator family income. Differences were greatest in terms of debt, profitabili ty, and the importance of nonfarm income to family income. As is commo n in structural analysis, many of the relationships observable in Nati onal level data are so consistent that they transcend type and size ca tegories. Poultry, and to a lesser extent hogs, were the least similar ; grain farms were the most similar. In the long term, a gradual reduc tion in global trade barriers is likely to lead to an equilibration of rates of return, balance sheets that show similar asset levels as far ms adjust to similar sizes, and increased proportions of part-time far ming and nonfarm income.