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Fixed costs are expenses that do not change in response to farm activity levels, such as insurance, loan interest, and property taxes.

TFP is the ratio of agricultural outputs (goods and services) to inputs (labour, land, capital, etc.). An increase in TFP implies that more products can be produced without increasing the amount of inputs.

The net amount of cash being transferred into and out of a farm business over a defined period. Cash flow management involves forecasting and monitoring these flows, ensuring liquidity.

Solvency refers to the ability of a farm business to meet its long-term debts and financial obligations. It can be determined by looking at the ratio of farm assets to farm liabilities.

Vertical integration is the combination in one company of two or more stages of production normally operated by separate companies. In agriculture, this could involve owning feed mills, farm operations, and meat processing plants.

An enterprise budget is an estimate of the costs and returns to produce a specific farm product (enterprise). It's used by farm managers to predict profitability and assess possible changes to the operation.

Risk management in farm business involves identifying, analyzing, and taking steps to reduce or control the exposure to risks associated with farm operations including weather, market, financial, regulatory, and environmental risks.

Value-added refers to the enhancement a company gives its product or service before offering the product to customers. Value-added applies to instances where a firm takes a product that may be considered a homogeneous commodity and adds value to it.

A business that earns most or all of its revenues from agriculture. An agribusiness tends to be a large-scale business operation and may dabble in farming, processing, and manufacturing and/or the packaging and distribution of products.

Commodity marketing involves selling farm products that are usually undifferentiated in terms of quality and content. This activity often involves understanding and engaging in the futures and options markets to manage price risk.

ROI measures the efficiency of an investment. For a farm, it is calculated by dividing the net farm income by the total value of assets. It indicates how effectively the farm is using its assets to generate earnings.

A supply chain is a system between a company and its suppliers to produce and distribute a specific product, and the supply chain represents the steps it takes to get the product or service to the customer. In agriculture, it includes input suppliers, farmers, processors, and distribution networks.

A farm cooperative is an organization owned and operated for the benefit of those using its services. Farmers form co-operatives to pool resources and collaborate for more economic power.

Gross margin is the difference between total revenue and variable costs. It represents the amount available to cover fixed costs and provide income to the farm business.

Liquidity refers to the ability of a farm business to meet short-term financial obligations without incurring unreasonable losses. It involves managing cash flow to ensure that the farm has access to cash when it's needed.

Net farm income is the total farm revenue minus total farm expenses. It is an indicator of profitability and the farm's financial performance over a specific accounting period.

Economies of scale refer to the cost advantages that a farm business obtains due to expansion. It occurs when production becomes more efficient, leading to lower per-unit costs as output increases.

Breakeven analysis is used to determine the level of production or sales at which the costs of production are equal to the revenues. It helps farmers decide at what point an enterprise would become profitable.

A subsidy is a form of financial aid or support extended to a farm sector generally with the aim of promoting economic and social policy. Subsidies can help to stabilize prices, ensure food security, and support farmers' incomes.

Direct marketing is a channel of distribution where the producer sells their products directly to the consumer without any intermediaries. This can include farm stands, farmers' markets, or community-supported agriculture (CSA) programs.

Marginal cost is the change in total cost that arises when the quantity produced changes by one unit. It is crucial for determining the optimal level of production where profit is maximized.

Opportunity cost represents the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. In farm management, it's the income foregone by allocating resources to their current use instead of the best alternative use.

Working capital is a financial metric that represents operational liquidity available to a farm business. It's calculated as current assets minus current liabilities. Adequate working capital implies a farm can finance day-to-day operations.

In farming, yield is the measure of the yield of a crop per unit area and is an indicator of crop productivity. It is often measured in bushels per acre or tons per hectare.