The effect of price variability on the optimum enterprise organization of a representative farm in the Hill Area of West Tennessee

This study was designed with two specific objectives: (1) providing the farmers in the Hill Area of West Tennessee with a guide for planning their farms under certain specified conditions; and (2) determining the effect of changing prices, especially cotton prices and hired labor cost, on the optimum enterprise organization of a "representative" farm. This latter objective was intended to serve two purposes: (1) to suggest to farmers types of shifts in enterprise organization that would be necessary for profit maximization with regard to changes in prices of basic products produced and with respect to changes in labor input prices; and (2) to provide results to be used in a larger Southern Regional study, the S-42 project, designed to estimate a price-supply function for southern cotton producers. Also, the procedures of analysis used in this thesis, and much of the input-output data could be used without much change for subsequent studies of other farm groups of that region.

The Southern Regional Project S-42, "An Economic Appraisal of Farming Adjustment Opportunities in the Southern Region To Meet Changing Conditions" has been undertaken by thirteen southern states. The overall purpose of the project is: . .. To provide guides to farmers when choosing among alternative production opportunities, . . . and to provide guides to farmers, those persons engaged directly in making and administering public programm, and to the public at large in order that choices of action at the public level may be made in a manner consistent with the public objectives.

Studies at the regional level would serve as base for the ultimate aggregation phase of the study at the national level.

This thesis is a part of the regional study initiated by the Department of Agricultural Economics and Rural Sociology of the University of Tennessee as a contribution to the above project. The results found in this thesis and in subsequent analysis of other farm situations in Tennessee could serve to give an estimate of the agricultural aggregate supply conditions of that region. In this thesis many of the assumptions are made in a manner such that the results could be used without change in such aggregation procedures and to comply with the recommendations of the S-42 Technical Committee.