Approximately 6,300 farms (cooperators) are enrolled in the Illinois Farm Business Farm Management Association (FBFM). This includes about one of every four farms in Illinois having over 500 acres or total farm sales over $100,000. Farmers' records are carefully screened and edited by professional field staff who certify about 3,000 farm records as usable for comparative analysis.

In 1985, FBFM initiated a review process of cooperators' balance sheets. Some of the criteria used for this review process are listed below:

Sole proprietors only.
Current liabilities must be free of significant omissions due to the oversight of accounts payable, accrued interest, accrued income taxes and current portions of intermediate and long term debt.
Accounts receivable and prepaid expenses must be specifically examined by the field staff to check for any errors and/or omissions.
Non-farm assets and liability data must be complete.
Beginning balance plus money borrowed must equal ending balance plus principal paid for each loan.
Valuation of any equity in leased equipment must be added to the fair market value of equipment.

For the balance sheet information to enter the final data set, the following two criteria also had to be met:

Value of farm production greater than $40,000.
Classified as a full time farmer. In this study, a farmer is classified as a full time farmer if three or more months of operator labor are used in the farm business.

There were 2,599 certified balance sheets in 2005 and 2,637 in 2004. Table 1 shows the distribution of these farms by location in Illinois for 2005. About 60 percent of the sample farms are located in central Illinois.

Table 2 shows the distribution of farms by farm type. About 92 percent of the farms in the sample are grain farms. Grain farms, as defined in this study, are farms where the value of feed fed to livestock is less than 40 percent of the crop returns. The remaining farms in the sample are primarily hog farms (farms on which the value of feed fed was more than 40 percent of the crop returns and the hog enterprise received more than half of the value of feed fed) and dairy farms.