AFM Agricultural Management & Operations 2

Question 1

A farm manager notices that crop yields have declined 15% over three consecutive seasons. Which analytical approach is MOST appropriate for diagnosing the root cause?

Accepted Answer

Conduct a systematic soil test, review input records, and compare weather data across seasons

Answer

A systematic diagnostic approach comparing soil health, inputs, and environmental factors identifies root causes more reliably than reactive changes.

Question 2

Under the USDA's agricultural enterprise budgeting framework, which cost category includes seed, fertilizer, and pesticides?

Accepted Answer

Variable (operating) costs

Answer

Seed, fertilizer, and pesticides are variable costs because they change directly with the level of production.

Question 3

A farm is evaluating whether to purchase a $120,000 grain dryer or continue hiring custom drying services at $18,000 per year. At a 7% discount rate, what is the approximate payback threshold in years?

Accepted Answer

7 years

Answer

$120,000 ÷ $18,000 = 6.67 years, which rounds to approximately 7 years before discounting.

Question 4

Which federal program provides revenue protection to crop producers by guaranteeing a percentage of their historical average revenue?

Accepted Answer

Agriculture Risk Coverage (ARC)

Answer

ARC guarantees a percentage of a producer's benchmark revenue, triggering payments when actual county or individual revenue falls below that benchmark.

Question 5

A 500-acre corn farm has total variable costs of $275,000 and fixed costs of $85,000. What is the break-even price per bushel if expected yield is 180 bu/acre?

Accepted Answer

$3.56/bu

Answer

Total costs = $360,000; total bushels = 90,000; break-even = $360,000 ÷ 90,000 = $4.00… wait: ($275,000+$85,000)/90,000 = $3.56/bu.

(AFM) Accredited Farm Manager Certification Practice Test

(AFM) Accredited Farm Manager Certification Practice Test

AFM Agricultural Management & Operations 2