Value of Farm Production (VFP)

A term unique to farm earnings statements. VFP is a measure of the value an agricultural operation has added to products sold and is determined by subtracting from gross revenue the cost of purchased assets which were subsequently sold to produce all, or part of, the total revenues. The most common example of purchased assets which are subsequently sold is subtraction from revenue of the cost of feeder livestock purchased and the cost of feedgrains purchased. VFP was developed to provide a method of comparing the profitability of two or more farming operations which is better than a simple comparison using gross revenues from these operations. (II-15-16, 28; III-13, 21)

Authorization Path: 2.2.5.2.43.1