NC_old1177: Agricultural and Rural Finance Markets in Transition (NC1014, NC221, NCT-194)
(Multistate Research Project)
NC_old1177: Agricultural and Rural Finance Markets in Transition (NC1014, NC221, NCT-194)
Duration: 10/01/2014 to 09/30/2019
Statement of Issues and Justification
Commodity prices and farmland values have surged recently. As a result, farmers and land owners have enjoyed an increase in their farm income, rate of return on assets, and wealth. Concern regarding the sustainability of these recent profits and the striking similarity of today's economic forces to the 1980s, have caused many individuals to wonder if U.S. agriculture is set up for another 1980s-type agricultural bust. Just as in the 1980s, government policies have contributed to the run up in commodity prices and land values (e.g. today's ethanol mandates). In addition, commodity prices and land values are at historic highs. For example, the USDA estimates show the average value of land today (approximately $2,400 per acre) is higher than 1980s average land value as measured in 2008 dollars (approximately $2,000 per acre). Another similarity is that the value of the dollar is at high levels relative to historical values, which has helped expand agricultural export markets. Furthermore, low interest rates along with recent profits have encouraged farmers to use debt and cash to invest in machinery, equipment, and land. The sluggish recovery from the recent financial crisis warrants research on how U.S. agriculture will be affected by these and future events and the long-term impact they present.
The modern agricultural production system is critically dependent upon the financial management of agricultural operations. Producers need cost-effective access to capital and sound government policy in order to continue to meet the food, fiber, and bio-energy demands of the United States. Agriculture has evolved into a very diverse and complex system which has exposed agriculture to many new risks, most recently was the subprime lending crisis. Not since the Great Depression were financial markets in such turmoil due to the increase in mortgage foreclosures, loan write-offs, and deterioration of new financial instruments (e.g. credit default swaps). The full causes of the financial crisis are beginning to be understood by academics. Fortunately, the agricultural industry was not greatly harmed by the recent financial crisis, partly due to sustained high commodity prices even during the financial crisis. However, there are many lessons to be learned regarding the role of systemic risk in the crisis, which is important not only to capital suppliers and Wall Street but agricultural users of capital and rural America as well.
The use of credit by farmers, rural businesses, and agribusinesses has a critical impact on their long-term sustainability and competitiveness. One aspect of credit use is determining when and how much credit the business should use. At the heart of this issue is determining the extent to which the firm should utilize its credit reserves or unused borrowing capacity. Borrowing capacity has a value to the firm because it can be called upon in times of financial distress and keeps options for future projects available. Determining the value of unused credit capacity, however, is a challenge complicated by the fact that the unused borrowing capacity tends to grow and shrink as the overall market conditions in agriculture fluctuate. When times are bad, unused credit reserves tend to shrink as lenders become more conservative. These unused credit reserves are typically larger for established farmers but many of these farmers are nearing retirement and may not want to take on additional debt. Young and beginning farmers, which are often small or have less than $250,000 gross farm sales, are now in position to move back to the farm or start a new or another career in production agriculture. While some of the wealth will be transferred from the older to the younger generation of farmers, many young farmers will need access to credit to start or grow their operations. Work is needed to determine how to value and manage credit reserves in agriculture as well the implications of a new generation of borrowers entering agriculture.
Firms in the food, fiber, and bio-energy industry are experiencing continued financial risk in their operations as input and output prices have been highly volatile in recent years, a risk that is likely to continue for the foreseeable future. Rising food prices worldwide resulting from bad crop years, possibly related to climate change, have reinforced the need to develop informed policies to promote economic development and expansion of agricultural markets in the developing world. Broadening and deepening financial markets in rural areas is one effective way to promote strong emerging markets as recent microfinance and rural finance initiatives have demonstrated. Agricultural economists have lagged in their contribution to the knowledge of the programs that bring about strong financial development in rural areas of developing countries, but recently this area has been more active among agricultural economics research. More work is needed, however, to further develop our understanding about the nature of risk in emerging markets.
Arguably, some of the increase in agricultural commodity and input prices is attributable to renewable energy. Ethanol production subsidies led to growth of the renewable energy industry, which resulted in over $3 billion of external capital flowing into agriculture and rural America. One source of funding is federal and state subsidization of the industry (e.g. tax credits), which recently expired (although the renewable fuel standard, a consumption mandate, is still in place). Moreover, most renewable energy firms have financial sweeps embedded in their debt financing which makes financing new investment difficult. Lack of financing jeopardizes the long term competitiveness of renewable fuels if new technology is not adopted. It is unclear how much growth in this sector will be sustained in the absence of federal and state tax credits.
The members of NC-1177 play a critical role in educating future and current agricultural financial managers through teaching and extension. These efforts provide the industry with the knowledge necessary to manage financial aspects of farms and agribusinesses. However, work is needed to jointly develop an understanding of the key components of a state-of-the art financial management curriculum for undergraduate, graduate, and extension audiences. This project will seek to identify the key concepts and lessons that should be incorporated into each of these curricula. By improving the training of undergraduates, graduate, and practitioners the project will improve the financial management ability of members of the food system and increase the long-term sustainability of businesses operating in the food, fiber, and bio-energy system.
The track record of NC-1177 was excellent regarding the number of collaborations and outcomes that depended upon multi-state efforts. This current project will leverage those existing relationships. Each objective the new project specifically states how multi-state activity will occur and why it is needed. The scientists involved in the project have a wide variety of expertise in agricultural finance, social capital, and policy analysis. However, most institutions have only one scientist working in this area. Thus, a regional emphasis fosters synergy as resident experts can establish a critical mass necessary to attract national interest and leaders of regulatory agencies, financial institutions, and policy groups; more efficiently collect data of mutual interest; enhance peer review of each work produced; and collaborate on issues that exceed local interest. Extension members of the committee benefit from research that is not available locally. The past multi-state effort benefitted greatly from the rich participation of industry, public agency, and non-profit members.
This group has a strong history of leveraging the multistate funds to acquire numerous national and state level grants. For example, in 2013 members of NC-1177 from Kansas State, North Dakota State, University of Illinois, University of Minnesota, and University of Kentucky have collaborated on a national farm benchmarking grant with just under a million in funds received. NC-1177 members have also leveraged multistate funds by working with industry. Researchers at Kansas State have received funds from CoBank to understand the outlook for farm supply cooperatives. Researchers at North Dakota State University have received funds from four Farm Credit Associations to develop and aid with lender training. Members will continue to collaborate and pursue grant opportunities from USDA, state agencies, and private industry to maximize benefit of multistate funds.
The primary activity of this regional research group is our annual meeting held each year in conjunction with the National Agricultural Credit Committee (NACC) and hosted by the Federal Reserve Bank of Kansas City. The meetings therefore represent one of the few opportunities to bring together members of academia, industry, and government to discuss important issues in agricultural finance. Each of the objectives will be explicitly addressed in the call for papers for the academic portion of the meetings. In addition, the industry and government panels of the combined sessions with the NACC will address each of the objectives. The objectives will be evaluated based on the research projects presented and the discussion between the various parties attending. Further, a number of the research projects are expected to be published in peer-reviewed academic journals and the extension service of the various states represented by the meeting. This will provide a quantitative measure of the impact of the research generated and the reach of the findings in academic, policy, and business communities.
Upon completion of the project, insights will be gained to ultimately improve the functioning of agricultural and rural financial markets. Producers, rural residents, and businesses should benefit through increased performance and reduced business risk. The lending sector will become more stable and better prepared to face future policy, portfolio and structure-related challenges. The value of this work to stakeholders is evidenced by the large number of non-station members who actively participate in annual meetings and desire to keep abreast of research results via listserve communication.
There are no apparent barriers hindering the technical feasibility of the proposed research project.
Related, Current and Previous Work
The project is a renewal of NC-1177, which itself was a replacement for NC-1014, NC-221 and NCT-194. The project’s membership is drawn largely from the continuing membership of NC-1177. It is notable, however, that much turnover has occurred among agricultural finance researchers and several members have been a part of the project only recently. This has resulted in a reinvigorated interest in broad collaboration to identify and evaluate many rural and social issues. It is also notable that the project involved participants from a variety of government agencies and has also been actively engaged with industry participants. There are currently no other active regional projects that deal with the financing of agriculture and rural America.
NC-1177 has had four objectives for the last five years:
1. Determine the effects of changes in international competitive balance and federal and state policies affecting agriculture on the financial and economic performance of farms, agribusinesses and rural financial markets;
2. Determine the effects of market, policy, and structural change in the agricultural and financial market sectors on the financial soundness, safety, and management of financial institutions that supply capital to agriculture;
3. Evaluate the management strategies, capital needs, and financial performance required for the long-term sustainability of firms in the food and agribusiness sector;
4. Social Capital and Rural Entrepreneurship.
The project produced a great deal of knowledge regarding the various objectives related to financing agriculture and rural America. Project members addressed the objectives through a variety of collaborations. Much of the research addressed individual objectives. Collectively the group has generated more than 100 peer-reviewed publications during the five years of the NC-1177 project. It has also sought and secured additional funding of research.
Objective 1: Examine the impact of recent fluctuations in capital and commodity markets on the performance, management, and regulation of agricultural financial institutions.
The financial strength and performance of agricultural lenders is important in ensuring a healthy rural credit market. The efficient performance of commercial banks, the associations of the farm credit system, and federal government loan programs has always been of interest to the NC-1177 membership. In the recent years researchers have evaluated the implementation of the New Basel Accord in agriculture, the profitability of lending relationships, the default probability of agricultural borrowers, and the performance of international lending institutions. The results show that the necessary capital for agricultural lenders under the New Basel Accord varies substantially depending on the riskiness of the portfolio, which is not surprising. Grouping borrowers together based on their riskiness, however, can improve the lenders understanding of how much capital is necessary. Such successful practices typically permeate a financial system with modifications to fit institutional size and resource base. Vendors offering fee-based capital services, further consolidations among financial institutions, data sharing arrangements, and experience gained by the industry and its regulators will hasten the permeation process and enable community banksas well as the internationally active onesto utilize internal ratings-based approaches and economic capital concepts in their risk management.
In order to improve the ability of agricultural lenders to implement many of the New Basel Accord guidelines, a better understanding of the agricultural lending relationships is needed. In particular lenders need greater detail on the default risk of borrowers, loss when default occurs, and in general the profitability of agricultural lending relationships. Many lenders have defaults infrequently, making the assignment of default probabilities and incidences difficult. Greater access to computing technology has helped to overcome this hurdle, but has not eliminated it.
Given recent market fluctuations, it is important to consider the impact of capital and commodity market volatility on the performance, management and regulation of agricultural financial institutions. Initial work in this area has considered the implications of evolving regulatory capital requirements on the Farm Credit System. These implications were assessed through a simulation model that considered the impact of various regulatory changes including potential changes stemming from Basel III. Researchers at the University of Georgia analyzed the efficiency of banks pre and post financial crisis. They found that agricultural banks were more technically efficient than non-agricultural banks. The research also found that agricultural banks’ input decisions were influenced by dependence on transaction deposits and high standards for equity-capital ratios. Researchers at Cornell University studied the impact of government sponsored enterprise (GSE) status on the pricing of bonds issued by Federal Farm Credit Banks Funding Corporation. They found that the yield would be 13.62 basis points higher than a non-GSE bond. The implications of losing GSE status would impact the competitive balance between commercial and system lenders.
Researchers at the University of Kentucky studied the impact of natural disasters on financial institutions. They found that natural disasters significantly increased problem loans and also forced many loans into restructuring. The recent increase in weather related issues such as drought in Midwest, hurricanes in southern states, and flooding in Northern plains indicate that financial institutions need to be prepared for these scenarios.
The recent farmland boom has many lenders concerned about another farm financial crisis. Researchers from USDA, Federal Reserve, Kansas State, Purdue, and University of Illinois have studied the impact of changes of land values on the financial health of commercial banks and Farm Credit Associations. Moreover, this work has explored the drivers of change in farmland values, including commodity prices influence on farmland values. Researchers have been using these studies to help financial institutions develop and conduct stress test scenarios.
In addition, risk management for financial institutions is critical during times of market volatility. Researchers at Auburn University studied the impact of financial derivatives on agricultural bank profitability. The researchers found that financial derivatives improved bank profitability and banks that use financial derivatives were less exposed to credit and interest rate risk during the sample period. Other work has focused on examining how new products such as weather derivatives and crop insurance might be used jointly with marketing strategies to better manage risk in agriculture.
Researchers at Oklahoma State and Louisiana State University have also developed a banking simulation program. The simulation has been used by banking professionals and students to provide training and education concerning sound bank management practices.
Objective 2: Evaluate the management strategies, capital needs, and policy impacting the financial performance and long-term sustainability of firms in the food and agribusiness sector.
The members of NC-1177 have a long history of investigating the borrowing and financial behavior of agricultural producers and agribusinesses. Researchers have considered the access and use of agricultural credit important for a healthy rural economy. Thus, understanding the producer’s use of credit is important when evaluating the success of government sponsored lending programs and the competitiveness of the rural credit market.
Multiple universities have begun to provide research concerning this objective. Researchers at Kansas State, Kentucky, University of Illinois, University of Minnesota, and North Dakota State University have begun to develop farm level databases. This farm level data are being used to develop state and national benchmarks to be used by researchers, lenders, and farmers. This data are also being used by researchers at Kansas State to show how liquidity impacts a farm level efficiency. Researchers have used this data to develop financial stress tests for farmers and also examine the sources of revenue variation. Researchers at Colorado State University found that small market crops and corn had the largest impact on revenue variation while crop insurance had the greatest impact on revenue diversification. Researchers have started considering the implications of fluctuating cash rents on farm profitability. Examination of cash rents of a nationally representative survey has started among a couple of land grant universities.
Researchers have examined the impact of policy changes and risk management adoption on farm performance. Researchers at Colorado State and North Dakota State University examined the impact of the Section 179 tax deduction on machinery investment. They found that the tax deduction had the largest positive effect on machinery investment when compared to operating profit margin, leverage ratio, producer type, and experience. Researchers at University of Kentucky and Clemson University studied the effects of direct payments on liquidity and repayment capacity of beginning farmers. They found a significant relationship between level of direct payments and term debt coverage ratio for experienced farmers but did not find the same relationship existed with beginning farmers. Researchers at USDA studied the impact of risk management tool adoption on profits. They found that the adoption of input price risk management tools improves farm-level profits by 13-17percent.
Given the recent agricultural boom, researchers have studied the performance of agricultural related firms. Researchers at the University of Kentucky studied the financial performance of publically traded companies. They found that agribusiness related firms outperformed the median sample of all publically traded firms. Researchers at the University of Illinois also examined farmland as an investment instrument. They found that agricultural real estate investments performed well compared to most other financial assets. They also found that the difficulty of investing in farmland is that no direct mechanism exists to facilitate farmland investment.
Objective 3 – Identify financial institutions and services that benefit agricultural producers and rural communities and expand agricultural markets, especially those producers that are young, beginning, and small, from socially disadvantaged groups, and/or involved in producing specialty crops.
More than 50% of current farmers are likely to retire in the next 5-10 years. This problem is exacerbated when combined with the decline in over farm numbers. The rapid decline in new and young farmers indicates that barriers to entry are rising. This motivates the need to research public policy measures to assist new and beginning farmers. The importance of research pertaining to young, beginning farmers has been addressed by NC-1177 members. Researchers at Louisiana State University studied the relationship between GM crop adoption and profitability for young and beginning farmers. Their research found that the impact of GM crop adoption on profitability was positively affected by the scale and leverage of the operation. On the other hand, off farm employment by beginning farmers has a negative impact on farm’s profitability if they choose to adopt GM crops. Researchers at the University of Kentucky found that older farmers and larger farms were less likely to experience financial stress when compared to beginning farmers, hobby farms, and livestock farms. Researchers at University of Kentucky and Clemson University studied the effects of direct payments on liquidity and repayment capacity of beginning farmers. They found a significant relationship between level of direct payments and term debt coverage ratio for experienced farmers but did not find the same relationship existed with beginning farmers.
Additional research has been done to identify the factors impacting the performance of new and beginning farmers. NC-1177 members from Louisiana State University, Kansas State University, and USDA found that increasing the number of decision makers, engaging in value-added farming, and having a written business plan could lead to higher performance of new and beginning farmers.
The agricultural industry is not only concerned with finding new farmers but also replacing agricultural lenders. Researchers at the University of Florida, Louisiana State University, Kansas State University, and the Federal Reserve conducted a survey to identify the relevant financial concepts that universities should be teaching related to agricultural finance concepts. The survey found that there was improvement needed in finance skills with an increased focus on business and financial risk.
Objective 4: Investigate capital structure, financial performance, and investment strategies of firms producing renewable energy in context of long term climate change. Implications of these findings for agriculture and rural communities will be delineated.
NC-1177 members have provided key research concerning Renewable Fuel Standard (RFS) mandates and Renewable Identification Numbers on the energy and agricultural markets. This has provided timely policy analysis of the RFS. Members have provided research concerning the optimal U.S. biodiesel fuel subsidy. They found that the estimated values were close the expired subsidy. They concluded that positive environmental and security benefits from the biodiesel tax exemption subsidy could be obtained by combining the subsidy with a federal excise tax on petroleum diesel. Members also investigated the feasibility of producing sugar beet biofuel. They found that the feasibility is dependent upon the price of ethanol and future crude oil prices. The impact of carbon policies on livestock producers has also been considered, along with related research to better understand the economic feasibility of alternative energy production systems. Research and extension outputs in these areas have helped to inform related policy decisions, educate producers, and successfully led to business startups.
Examine the impact of recent fluctuations in capital and commodity markets on the performance, management, and regulation of agricultural financial institutions
Evaluate the management strategies, capital needs, and policy impacting the financial performance and long-term sustainability of firms in the food and agribusiness sector
Identify financial institutions and services that benefit agricultural producers and rural communities and expand agricultural markets, especially those producers that are beginning, young, from socially disadvantaged groups, and/or involved in producing specialty crops
Investigate capital structure, financial performance, and investment strategies of firms producing renewable energy in context of long term climate change. Implications of these findings for agriculture and rural communities will be delineated
MethodsThe primary concern of the agricultural finance community during the last proposal was the sector’s ability to withstand the Great Recession. There were a number of concerns about how disturbances in the banking and credit industries, as well as the broader economy as a whole, may spill over to the agricultural sector. Research coming out of the previous regional research project demonstrated that the agricultural sector enjoyed a period of relative prosperity following the Great Recession, marked by high commodity prices, rising farm incomes, and record agricultural asset values. This occurred as the economy as a whole experienced a recession and slow recovery. The phenomenon raised a number of important questions going forward related to the linkages between agricultural and the broader economy, as well as the importance of policy in agricultural finance. Presently, the primary concern is whether the agricultural sector will continue to experience high growth, income levels, and healthy credit markets relative the broader economy. Previous research of this regional research group suggests that the financial health of the agricultural sector should be closely monitored as the risk of a decline in agricultural incomes and asset values appears likely. While the agricultural sector appears decoupled from the broader economy, declining commodity prices and increasing costs of borrowing may be a harbinger of a significant decline in the farm financial conditions. The theoretical basis used to frame the research outputs of this regional research group are drawn from theory of finance and credit markets. According to the simplest model of asset valuation, the present value model, the value of an asset is determined by the discounted stream of expected future returns. As a result, the major areas of concern for agricultural finance are (i) expected farm income, (ii) interest rates (the discount factor), and (iii) asset values. These three components comprise the tenants of agricultural finance research and are the primary topics of inquiry for this regional research group. These theories are applied to the research objectives of this group and are explained below. Objective 1 Examine the impact of recent fluctuations in capital and commodity markets on the performance, management, and regulation of agricultural financial institutions. The recent financial crisis motivated a number of reforms in US credit markets. In addition, changes in US farm and energy policies have led to increase in volatility in commodity markets, and farmland values are at record levels. Many believe that these changes have led to a significant increase in systematic risk in the agricultural sector. Because systematic risk is inherent to the broader financial system, it cannot be diversified away and poses a series threat to the long run success of firms. While the agricultural sector, in particular agricultural financial institutions, remained somewhat insulated from the catastrophic effects of increased systematic risk (e.g., US bank foreclosures following the recent recession), it would be naïve to say that the sector is completely immune to the short- and long-run effects of this increase in systematic risk or the increase in volatility of capital and commodity markets. Research of the widespread effects of the capital and commodity market fluctuations on the performance, management, and regulation of agricultural financial institutions is the focus of this objective. Most of the issues outlined above are national in nature but fully understanding and analyzing the implications of this objective requires an analysis at a regional level. Agricultural financial institutions are just as diverse as their agricultural borrowers and as agricultural borrowers demographics and production changes, so does the different types of risk an agricultural financial institutions faces. For example, Midwest states are dominated by grain farmers that have seen agricultural land values reach well above $10,000/acre. While this makes balance sheets strong for these farmers, it creates additional financial risk for agricultural financial institutions or agricultural banks. If land values were to fall, similar to what we have seen in the U.S. housing market and the 1980s farm bust, many agricultural banks may find themselves with under collateralized loans and an inability to loan additional funds. Agricultural bankers in the South have seen an increase in land values as well but this increase is dwarfed by the run-up in land values experienced in the Midwest. Thus, the inherent risks are different for agricultural banks across the U.S. due to differences in land values, as well as difference in agricultural production. In addition to differences created by the type of agricultural production that dominates their region, the size, scale, and commitment to agricultural lending varies considerably across the country. For example, the Northeast is characterized by relatively large banks while the Midwest has a larger number of smaller community banks focused on agricultural lending. NC-1177 and its members have a long history of working through these types of problems faced by agricultural financial institutions. For example, the University of Illinois, Purdue University, and Cornell University were leaders in researching the implications of the 1980s farm crisis and its subsequent effects on U.S. agriculture at a national and regional level. This was accomplished by pooling of state-level data and different experts at universities across the U.S. bringing their regional expertise to analyzing this pooled data. Many of these previous experts as well as new experts in the proposed renewal of NC-1177 will continue to pool data (such as income and call reports for banks) and conduct collective analyses to address the increase in systemic risk for agricultural financial institutions. Another unique aspect of addressing this systemic risk in U.S. agriculture will be the continued work with the Federal Reserve Bank of Kansas City, hereafter the Bank. The Bank has been and will be actively involved in supporting NC-1177s research efforts. The Bank has produced many outputs in their Mainstreet Economist, the Economic Review, and other academic outlets addressing many past and future issues facing U.S. agriculture. The Bank provides additional access to agricultural bankers and their Survey of Agricultural Credit Conditions. Access to this data will provide information on the loan availability, loan demand, and the overall health of agricultural banks and agricultural producers. Coupling this data with other state level data and bringing experts from the Bank and other universities together on research of these pooled data will create a national and multi-state level analysis that will benefit all agricultural banks. And, will provide policy makers and state-level bankers associations sound evidence of how to best address the impacts of the financial crisis on agriculture. Agricultural banks are but one type of agricultural financial institution. Other key agricultural financial institutions are government sponsored enterprises (GSEs), like the Farm Credit System and Farmer Mac. A series of studies will be conducted to address the implications of fluctuations in capital and commodity markets on these GSE agricultural firms. Efforts will focus on examining how changes in government policy toward GSEs would impact the supply and price of capital in agricultural markets. The collapse and reorganization of other prominent GSEs, Fannie Mae and Freddie Mac, has called into question the role of GSEs in modern capital markets. Work is needed to understand how changes in the GSE status of these lenders would impact capital availability in agricultural markets. Research will be conducted to determine how GSE status influences the cost of funds for Farmer Mac and the Farm Credit System and how alternative structuring of these institutions might be best accomplished so as not to disrupt the agricultural credit markets. The financial characteristics of agricultural producers vary across the U.S. Each type of producer has a different set of business and financial risks, which impact those that lend them money. For example, dairy operations located in New York have different credit needs than a corn-soybean producer in Illinois. While these differences in credit needs as well as credit reserves exist, synthesizing what is being asked of all producers in terms of loan documentation will lead to better and more sound financial management educational programs. In addition, information on failures and successes of agricultural financial institutions will be collected that will benefit not only specific states and regions but the nation as a whole. Researchers from Illinois, Kansas, North Dakota, Minnesota, and Kentucky will collaborate on this objective. Objective 2: Evaluate the management strategies, capital needs, and policy impacting the financial performance and long-term sustainability of firms in the food and agribusiness sector. Efforts in this objective will be directed toward issues related to capital supply and demand in agriculture, financial management of agricultural businesses, and the impacts of public policy on capital availability and its use in the agricultural system. One key to successfully addressing this objective is to utilize a variety of state and national level data sets designed to understand the financial situation of farms. Many of the researchers involved in the project lead or assist with farm level data collection efforts in their respective states. These data sets will be analyzed in a coordinated manner to shed light on how capital needs vary across states and regions and how national level policies will impact the financial performance on firms in the sector. Additionally, the project has a long history of collaborating with researchers from the USDAs Economic Research Service. Several of the researchers have developed collaborative working relationships with ERS to analyze ERSs Agricultural Resource Management Survey (ARMS). This data set contains arguably the most definitive data on the financial structure and characteristics of the farm sector. In completing this objective researchers will continue to collaborate with and involve ERS scientists in the project. This will greatly expand the scope of the work that is done and will also greatly benefit the analysis by bringing together many of the top agricultural researchers to work on analyzing the data. The data will be analyzed with well-known and accepted econometric and optimization procedures. In addition, to making the best use of data already collected in the individual states and at the national level by ERS, the project participants will also augment existing data collection efforts to explicitly analyze issues related to understanding how management strategies, capital needs, and policy impact financial performance. This additional data collection effort will benefit greatly from multi-state coordination which will insure that data is consistently collected and that the results can shed light on issues that transcend state boundaries. The problems identified in this objective are all national in nature. In developing a sound federal policy, it is critical that regional perspectives inform the analysis. For instance, the banking and agricultural credit sectors differ considerably amongst the regions of the US. The work on financial education must also consider the full extent of financial management knowledge and programming currently underway throughout the country. While almost every state has operators whom produce a diverse set of agriculture outputs, the type of farming operations tend to be concentrated regionally. For example, corn and soybean production tends to be concentrated in the Midwest and dairy production in the Western states, the Northeast, and Midwest. As a result, educators in these regions have developed outstanding financial management education programs for these types of operations. By combining and summarizing the knowledge developed in these regions across the country, producers of these commodities in non-traditional production regions can benefit from the work developed in more traditional production regions. In short, by summarizing and building upon this knowledge a coherent and useful financial management research and education program can be developed to achieve the greatest benefit to agricultural producers in all regions of the country. In addition, current Farm Bill negotiations suggest drastic changes in the US farm safety net going forward, and these changes will likely impact the financial risks of producers, lenders, and agribusiness. While negotiations are currently underway, it appears that the future of farm policy will likely be dominated by insurance and risk-management programs. The members of this project have a long history of studying many important facets of Federal crop insurance and related programs. Researchers from Illinois, Kansas, North Dakota, Cornell, Colorado, Texas, and Louisiana will collaborate on this objective. Objective 3: Identify financial institutions and services that benefit agricultural producers and rural communities and expand agricultural markets, especially those producers that are young, beginning, and small, from socially disadvantaged groups, and/or involved in producing specialty crops. The weak recovery from the recent economic recession has severely curtailed the credit available to agricultural communities and especially young, beginning, and small (YBS) producers or socially disadvantaged producers. Thus, (YBS), socially disadvantaged, and/or specialty crop producers will benefit from additional efforts to ensure adequate credit. These farm groups can play a vital role in maintaining and growing rural communities in the U.S. Ensuring that YBS farmers as well as socially disadvantaged farmers receive credit is one of the missions of the Farm Service Agency within the U.S. Department of Agriculture. In addition, the Farm Credit System is charged with providing credit to YBS farmers. The NC-1177 group has strong ties to these two government agencies and sharing data between these groups has improved lending and financial service practices to YBS farmers, socially disadvantaged, and/or specialty crop producers in the past. An example of this is the research completed by Oklahoma State University, Purdue University, and the Farm Credit Administration (regulator of the Farm Credit System) on the importance of credit to YBS farmers that operate nonfarm businesses. NC-1177 participants will work with these government agencies by pooling data and other resources to ensure these special interest farm groups receive credit and financial services necessary to navigate the potentially turbulent times ahead. Many NC-1177 participants have experience with the ARMS data set. Since the agricultural sector is global, international regulatory and financial issues affect YBS, socially disadvantaged, and specialty crop producers as much as domestic ones and must be considered to understand the viability of these at risk producers. In effect, expanding agricultural markets must consider the implications of the recent global economic recession and slow recovery. Agricultural export markets are important to the financial health of U.S. agricultural producers and these export markets will undoubtedly be impacted by new rules of international finance. Producers will need to quickly understand the potential ramifications of changing the rules of international finance on their farm business. Delivering this information to farmers should help them compete in a global economy. However, obtaining, analyzing, and delivering this information is a large and substantial task. Most universities have few faculty that specialize in agricultural finance and/or international trade. In addition, agricultural production varies across geographic regions and this variation in crop and livestock production may be impacted differently by these new international finance rules. Therefore, an effort to pool resources is needed to address the timely issue of international finance. Pooling of resources will be accomplished through a multi-state effort. Cornell University and Auburn University have faculty members that are experts in the area of international agricultural finance. In addition, the Agricultural Finance Review has shown a recent commitment to publishing work in the area of international agricultural finance. Researchers from Illinois, Kansas, Auburn, Cornell, Colorado, Iowa State, and Kentucky will collaborate on this objective. Objective 4: Investigate capital structure, financial performance, and investment strategies of firms producing renewable energy in context of long term climate change. Implications of these findings for agriculture and rural communities will be delineated. Growth in the renewable fuels industry has slowed from its previous fervent pace. Unforeseen reductions in gasoline demand that resulted from the recent economic recession and increased fuel efficiency of the U.S. auto fleet were contributing factors to a reduction in the proposed 2014 Renewable Fuel Standard mandated levels of conventional and advanced biofuel production. Depending on other unfolding market factors like world demand and South American production, a relaxation of the floor on corn based ethanol consumption could impact agriculture and rural communities, particularly since this reduction comes on the heels of the expiration of tax incentives commonly known as the Blenders Credit. The sector has recently experienced how strain in the renewable fuel sector can cause strain in rural communities and for agricultural producers. Financial stress in the corn ethanol production sector was experienced during the run up in corn prices in 2008. This led to the bankruptcy of VeraSun, the largest publically traded ethanol producer, and others in or around October 2008. This strain was acutely felt in the surrounding rural communities because many farmers held valuable forward contracts with the ethanol producers that suddenly became worthless. As the renewable fuel sector enters a more mature phase, there is much need for research on how the slowing growth in this industry will affect rural communities and farmers. As the Renewable Fuel Standard enters a more mature phase, focus will shift toward emphasizing growth in the advanced biofuel sectors or biodiesel and cellulosic ethanol production. Both of these have proven to be much riskier ventures, and policies that incentivize these riskier sectors may unintentionally introduce new sources of risk into the agricultural sector as a whole. Previous research efforts of this project and other regional projects have focused more on how renewable fuel policy will affect production decisions of individual farmers, and potentially cause changes in the price relationships among our primary agricultural commodities. Less research attention has focused on how renewable fuel policy will affect risk at both the farm and renewable fuel industry levels. As growth in the renewable fuel sector gravitates toward the advanced biofuel portion of the Renewable Fuel Standard, the number of potential feedstocks and regions of the country in which the feedstocks are grown grows dramatically. A multi-state effort is needed in order to coordinate efforts on the research of these heterogenous feedstocks and how their aggregate production will influence the agricultural sector. This is especially true if the production of advanced biofuels requires a more distributed production model than the highly concentrated model of corn-based ethanol production. The research in this objective will be broadly constructed so as to consider renewable energy production from a variety of potential feedstocks and energy outputs. Research on this objective will rely upon existing public data and coordinated data collection efforts by members of the group to analyze the problem. The research on this objective will utilize a variety of approaches, including econometric, optimization, and simulation analysis. Researchers will develop economic models of renewable energy production that can be adapted to a variety of potential feedstocks and regions. Researchers from Illinois, Kansas, North Dakota, and Iowa State will collaborate on this objective.
Measurement of Progress and Results
- The development of an agricultural finance community of practice on eXtension
- Dedicated section at AAEA annual conferences
- Refereed journal articles
- Multi-state research bulletins
- Extension publications (e.g., fact sheets, bulletin updates, etc.)
- Popular press articles Output 6 Papers presented at professional conferences Output 7 Extension presentations delivering research findings and educational material Output 8 The organization of special conference sessions at professional meetings
Outcomes or Projected Impacts
- A strengthened network of scholars and industry participants economists capable of examining specific financial market policies affecting rural areas. Participants will discern local impacts of transition and change in financial markets. Impacts will likely differ across regions.
- A standardized set of investigative methodologies and assessment tools for analyzing the social, economic, and fiscal impact of the global financial crisis on rural financial markets.
- Publications and educational materials for public and private policymakers, financial industry and agribusiness leaders, and farmers and rural citizens that will help them understand this global financial crisis and what it means for themselves and their associated business and rural communities.
Milestones(2015): Organizational meeting to identify and prioritize the topics to be addressed under each objective. Development of detailed literature reviews for each objective. Development of current data inventory and data needs for the project. Report summaries from each objective and interim data development reports and analyses
(2016): Descriptive summaries and analysis of preliminary data collected.
(2017): Development of results and bulletins from data analysis. Development of symposium at professional meetings and completion of edited volume of results of initial analyses. Development of refereed publications and dissemination to lay audiences. Identification of additional priorities for each objective for further analysis.
(2018): Final development and implementation of community of practice for eXtension.org. Initial analyses of priority projects identified in 2015
(2019): Development of final reports and summarization of key findings. Updates to eXtension.org Research dissemination through refereed journal articles and to lay audiences.
Projected ParticipationView Appendix E: Participation
The nature of the collective research undertaken in this project places a premium on communicating and disseminating research results to academic professionals, policymakers, farmers, financial institution managers, agribusiness managers, and leaders in local communities. In addition to the usual channels through extension and professional publications, NC-1177 is connected to government and industry leaders, which will provide an immediate transfer of knowledge beyond normal academic outlets. This is evident by the 2013 annual NC-11774 meeting being coordinated with the National Agricultural Credit Committee at the Federal Reserve Bank of Kansas City. Coordinating future meetings by both NC-1177 and the National Agricultural Credit Committee was discussed by participants at this previous meeting and, if schedules work, something planned for future meetings.
In addition, information bulletins in non-technical language as well as two-page summaries of research results will be prepared and disseminated. Sessions will be organized for professional meetings of the American Agricultural Economics Association and several regional science associations. Project annual reports, symposia programs, and related materials will be provided to the public via the NC-1177 website along with summaries of research results. Another component of the outreach plan is the development of an agricultural finance community of practice for eXtension.org.
The recommended Standard Governance for multistate research activities include the election of a Chair, a Chair-elect, and a Secretary. All officers are to be elected for at least two-year terms to provide continuity. Administrative guidance will be provided by an assigned Administrative Advisor and a CSREES Representative.
The membership is divided into sub-committees by project objective. Each group has responsibility for coordinating its work. The vice-president has overall responsibility for synthesizing the project's work product and results at the end of the project, including completion of the termination report.
1. Kuethe, Todd H., Todd Hubbs, and Mitchell J. Morehart. Farmland Returns and Economic Conditions: A FAVAR Approach Empirical Economics (forthcoming).
2. Kuethe, Todd H.,* Nicholas Walsh, and Jennifer Ifft. Farmland vs. Alternative Investments Before and After the 2008 Financial Crisis Journal of American Society of Farm Managers Rural Appraisers (forthcoming).
3. Dillard, John, Todd H. Kuethe, Craig Dobbins, Michael Boehlje, and Raymond Florax. (2013)The Impacts of the Tax-Deferred Exchange Provision on Farm Real Estate Values Land Economics 89 (3): 479-489.
4. Kuethe, Todd H. and Jennifer Ifft. (2013) The Information Content of Farmland Value Surveys" Agricultural Finance Review 73 (1): 45-57
5. Neyhard, J., L. Tauer, and B. Gloy. Analysis of Price Risk Management Strategies in Dairy Farming Using Whole Farm Simulations. Journal of Agricultural and Applied Economics, 45:2(2013):313-327.
6. Ketterings, Q.M., G. Godwin, P. Barney, J.R. Lawrence, B. Aldrich, T. Kilcer, K.J. Czymmek, and B. Gloy (2013). Shallow Mixing of Surface Soil and Liquid Dairy Manure Conserves Nitrogen while Retaining Surface Residue. Agronomy for Sustainable Development (in press).
7. DAntoni, Jeremy M. and A. K. Mishra Welfare Implications of Reduced Government Subsidies to Farm Families: Accounting for Fringe Benefits. Forthcoming Agricultural Economics, 2013.
8. DAntoni, Jeremy M., A. K. Mishra, and D. Blayney. Assessing Participation in the Milk Income Loss Contract Program and its Impact on Milk Production. Journal of Policy Modeling, Vol. 35 (2): 243-254, 2013.
9. Katchova, A.L., and S.J. Enlow. Financial Performance of Publicly-Traded Agribusinesses. Agricultural Finance Review 73(2013).
10. Williamson, J.M., and A.L. Katchova. Tax-Exempt Bond Financing for Beginning and Low-Equity Farmers. Journal of Agricultural and Applied Economics 44(2013).
11. Zakrzewicz, Christopher J., B. Wade Brorsen, and Brian C. Briggeman, How Accurate are Forecasts of Farmland Values?, Journal of Agricultural and Applied Economics, 2013, Forthcoming
12. Ketterings, Q.M., G. Godwin, P. Barney, J.R. Lawrence, B. Aldrich, T. Kilcer, K.J. Czymmek, and B. Gloy (2013). Shallow Mixing of Surface Soil and Liquid Dairy Manure Conserves Nitrogen while Retaining Surface Residue. Agronomy for Sustainable Development (in press).
13. Zhang, T., M. Mallory, and P. Barry. 2013. Determinants of the Patronage Refund Decision of Farm Credit System Associations. Agricultural Finance Review, 73(1):102-118.
14. Shen X., and V. Hartarska, (2013) Derivatives as Risk Management and Performance of Agricultural Banks Agricultural Finance Review, 73(2):290-309.
15. Hartarska V., R. Mersland, D. Nadolnyak, and C. Parmeter, (2013) Governance and Scope Economies in Microfinance Institutions International Journal of Corporate Governance, 4(1):74-86
16. Hartarska, V., Shen, X., and R. Mersland, (2013) Scale Economies and Elasticities of Substitution in Microfinance Institutions, Journal of Banking and Finance, 37(1): 118-131.
17. Ketterings, Q.M., G. Godwin, P. Barney, J.R. Lawrence, B. Aldrich, T. Kilcer, K.J. Czymmek, and B. Gloy (2013). Shallow Mixing of Surface Soil and Liquid Dairy Manure Conserves Nitrogen while Retaining Surface Residue. Agronomy for Sustainable Development (in press).
18. Hadrich, J.C. 2013. Quantifying the sources of revenue variation in the Northern Great Plains. Agricultural Finance Review. Vol 73 (3): In Press
19. Katchova, A.L. Agricultural Contracting and Competition. book chapter in the Ethics and Economics of Agrifood Competition, Harvey S. James, ed. Springer, 2013.
20. Russell, Levi, Michael Langemeier, and Brian C. Briggeman, The Impact of Liquidity and Solvency on Cost Efficiency Estimation, Agricultural Finance Review, Forthcoming
21. Sherrick, B.J., M.L. Mallory, and T. Hopper. 2013. Whats the Ticker Symbol for Farmland? Agricultural Finance Review, 73(1):6-31.
22. Hadrich, J.C., Larsen, R., Olson, F. Impact of the Section 179 tax deduction on machinery investment. Agricultural Finance Review (Forthcoming).
23. Joseph Cooper, Carl Zulauf, Michael Langemeier, Gary Schnitkey. 2012. Implications of within county yield heterogeneity for modeling crop insurance premiums. Agricultural Finance Review 72(1): 134-155.
24. Briggeman, Brian C., Steven Koenig, and Charles B. Moss. 2012. U.S. Farm Debt: The Role of ARMS. Agricultural Finance Review 72(2), 254-261.
25. Briggeman, Brian C., Joshua D. Detre, Notie Lansford, and Damona Doye, Experiential Learning on the Internet: The Case of the Internet Agricultural Bank Simulation Game," North American Colleges and Teachers of Agriculture Journal. Vol. 46, No. 2, 2102 (63-67).
26. Chacon-Cascante, A. and A.M. Featherstone. On the Relationship between Openness to Trade and Efficiency Levels in Low Income Countries: Evidence from the Latin American and the Caribbean Countries. International Research Journal of Finance and Economics, Forthcoming.
27. Clark, Benjamin M., Joshua D. Detre, Jeremy DAntoni, and Hector O. Zapata, The Role of an AG Index in a Modern Portfolio, Agricultural Finance Review, Vol. 72, No. 3, 2012 (362-380).
28. Fengxia Dong, Jing Lu, Allen M. Featherstone. 2012. Effects of credit constraints on household productivity in rural China. Agricultural Finance Review 72(3): 402-416.
29. Ellinger, Paul N., Bruce L. Ahrendsen, and Charles B. Moss. 2012. Balance Sheet andIncome Statement Issues in ARMS. Agricultural Finance Review 72(2), 247-253.
30. Escalante, C.L. Financial Outlook: Georgia Farms in Georgia Farm Outlook and Planning Guide for 2012-2013. Department of Agricultural and Applied Economics. University of Georgia. December 2012.
31. Escalante, C.L., E.G. Fonsah, C. Lacy, T. Shepherd, D. Shurley, N. Smith, F. Stegelin, and K. Wolfe. Agriculture, 2013 Georgia Economic Outlook, Selig Center for Economic Growth, University of Georgia, December 2012.
32. Fannin, James M. and Joshua D. Detre, Red Light Ahead! Preparing Local GovernmentsFinancially for the Next Disaster," Choices, Vol. 27, No. 1 (2012).
33. Fannin, James M., John D. Barreca, and Joshua D. Detre, Estimating GDP at the Parish (County) Level: An Evaluation of Alternative Approaches," Louisiana State University Agricultural Center Experiment Station Bulletin, No. 890, 2012.
34. Fannin, J. Matthew, John D. Barreca, and Joshua D. Detre, The Role of Public Wealth on Recovery and Resiliency to Natural Disasters in Rural Communities, American Journal of Agricultural Economics, Vol. 94, No. 2, 2012 (549-555).
35. Featherstone, Allen M., Charles B. Moss, and Christine A. Wilson. 2012. Guest Editorial: Review of the Financial Data Provided by the Agricultural Resource Management Survey. Agricultural Finance Review 72(2), 185-190.
36. Fonsah, E.G., M.C. Ferrer, C.L. Escalante, and S. Culpepper. Financial Analysis of Methyl Bromide and Mulch Alternatives for Bell Pepper in Georgia. Cooperative Extension Bulletin, College of Agricultural and Environmental Sciences, University of Georgia, Bulletin No. 1411, November 2012.
37. Jouault, A. and A.M. Featherstone. Determining the Probability of Default of Agricultural Loans in a French Bank. Journal of Applied Finance and Banking, 1(June 2011):1-30.
38. Kuethe, Todd H. and Mitchell J. Morehart. (2012) The Agricultural Resource Management Survey: An Information System for Production Agriculture" Agricultural Finance Review 72 (2): 191-200.
39. Kuethe, Todd H. and Roman Keeney 2012. Environmental Externalities and Residential Property Values: Externalized Costs along the House Price Distribution" Land Economics 88 (2): 241-250.
40. Kuethe, Todd H. 2012. Spatial Fragmentation and the Value of Residential Housing" Land Economics 88(1): 16-27.
41. Kuethe, Todd H. and Mitchell J. Morehart. 2012. The Profit Impacts of Risk ManagementTool Adoption" Agricultural Finance Review 72 (1):104-116.
42. Kuethe, Todd H.* and Allison Borchers. 2012. Farmland Assessment Through MultipleRegression Analysis" Journal of Extension 50 (3).
43. Li, X., C.L. Escalante, J.E. Epperson, and L.F. Gunter. Early Warning Models for Bank Failures: Lessons from the Late 2000s Great Recession. 2nd Annual International Conference Proceedings Accounting and Finance (AF2012), Global Science and Technology Forum. 21-22 May 2012, Singapore.
44. Mark, Tyler B., Joshua D. Detre, Jeremy DAntoni, and Ashok K. Mishra, " Factors Influencing Farm Operator Expectations on Future Levels of Government Support," Journal of the American Society of Farm Managers and Rural Appraisers, Vol. 75, No. 1, 2012 (148-164).
45. Mishra, Ashok K., Michael J. Harris, Kenneth W. Erickson Charles B. Hallahan, and Joshua D. Detre, Drivers of Agricultural Profitability in the US: An Application of the DuPont Expansion Method, Agricultural Finance Review, Vol. 72, No. 3, 2012 (325-342).
46. Moss, Charles B., Danny A. Klinefelter, and Michael A. Gunderson. 2012. Accounting for Complex Entities: Implications for ARMS. Agricultural Finance Review 72(2), 201-209.
47. Mugera, A.W., M. Langemeier, and A.M. Featherstone. Labor Productivity Convergence in the Kansas Farm Sector: A Three-Stage Procedure Using Data Envelopment Analysis and Semiparametric Regression Analysis. Journal of Productivity Analysis, Forthcoming.
48. Paulson, N.D. and G.D. Schnitkey. 2012. Policy Concerns of Midwestern Grain Producers for the 2012 Farm Bill. American Journal of Agricultural Economics 94(2): 515-521.
49. Paulson, N.D. 2012. Revisiting Flexible Cash Leashes. Journal of the American Society of Farm Managers and Rural Appraisers 75(1).
50. Qiu, C., G. Colson, C. Escalante, and M. Wetzstein. Considering macroeconomic indicators in the food before fuel nexus. Energy Economics, 34,6(2012):2021-2028.
51. Calum G. Turvey, Yiwo Wang. 2012. The effects of government sponsored enterprise (GSE) status on the pricing of bonds issued by the Federal Farm Credit Banks Funding Corporation (FFCB). Agricultural Finance Review 72(3): 488-506.
52. Wilson, Christine A., Charles B. Moss, and Scott Brown. 2012. Reporting and Usability of ARMS Income and Balance Sheet Data. Agricultural Finance Review 72(2), 286-293.
53. Woodard, J.D., K. Ward, G.D. Schnitkey, P. Burgener, and A.D. Pavlista, Government Insurance Program Design, Incentive Effects, and Technology Adoption: The Case of Skip- Row Crop Insurance, American Journal of Agricultural Economics (forthcoming).
54. Woodard, J.D., G.D. Schnitkey, B.J. Sherrick, N. Lozano-Gracia, and L. Anselin, A Spatial Econometric Analysis of Loss Experience in the U.S. Crop Insurance Program, Journal of Risk and Insurance (forthcoming).
55. Wu, H., G. Colson, C.L. Escalante, and M. Wetzstein. An Optimal U.S. Biodiesel Fuel Subsidy. Energy Policy, 48(2012): 601-610.
56. Wu, Y., C.L. Escalante, L.F. Gunter, and J.E. Epperson. A decomposition approach to analyzing racial and gender biases in Farm Service Agencys lending decisions. Applied Economics, 44,22 (August 2012): 2841-2850.
57. Christopher Zakrzewicz, B. Wade Brorsen, Brian C. Briggeman. 2012. Comparison of alternative sources of farmland values. Agricultural Finance Review 72(1): 68-86.
58. Zapata, Hector O., Joshua D. Detre, and Tatsuya Hanabuchi, Historical Performance of Commodity and Stock Markets, Journal of Agricultural and Applied Economics, Vol. 44, No. 3, 2012 (339-357).
59. Mishra, Ashok K. and H.H. Chang. Tax-Deferred Retirement Savings of Farm Households: An Empirical Investigation. Journal of Agricultural and Resource Economics Vol. 36(1), 2011: 160-176.
60. Mishra, Ashok K., and K. Paudel. Estimating Permanent Income and Wealth of U.S. Farm Households. Applied Economics, Vol. 43(12), 2011: 1521-1533.
61. Jette-Nantel, S., D. Freshwater, A.L. Katchova, and M. Beaulieu. Farm Income Variability and Off-Farm Diversification in Canadian Agriculture. Agricultural Finance Review 71(2011), forthcoming.
62. Collier, B., A.L. Katchova, and J. Skees. Loan Portfolio Performance and El Nino, an Intervention Analysis. Agricultural Finance Review 71(2011):98-119.
63. Leatham, D. "Structural Change in Stock Price Volatility in Asian Financial Markets. Journal of Economic Research, 15(2010):1-27.
64. Woodard, J.D., N.D. Paulson, D. Vedenov, and G. Power. 2011. Estimation Efficiency in the Modeling of Dependence Structures: An Application of Alternative Copulas to Insurance Rating. Agricultural Economics, forthcoming.
65. Paulson, N.D., C.E. Hart, and D.J. Hayes. 2010. A Spatial Bayesian Approach to Weather Derivatives. Agricultural Finance Review 70(1): 79-96.
66. Gloy, B.A., M.D. Boehlje, C.L. Dobbins, C. Hurt, and T.G. Baker. Are Economic Fundamentals Driving Farmland Values? Choices, 26:2(2011).
67. Henderson, J.R. and B.A. Gloy, Farmland Values. Editors, Special Theme Edition of Choice Magazine. Choices, 26:2(2011).
68. Briggeman, B.C. The Role of Debt in Farmland Ownership. Choices, 26:2(2011). Schnitkey, G.D. and B.J. Sherrick. Income and Capitalization Rate Risk in Agricultural Real Estate Markets. Choices, 26:2(2011).
69. Kuethe, T.H., J. Ifft, and M. Morehart. The Influence of Urban Areas on Farmland Values. Choices, 26:2(2011).
70. Yu, Y., C.L. Escalante, J. Houston, L. Gunter, and X. Deng. Analyzing scale and scope specialization efficiencies of U.S. agricultural and non-agricultural banks using the Fourier Flexible Functional FormApplied Financial Economics, 21,15(August 2011): 1103-1116.
71. Uematsu, H., and Ashok K. Mishra. Use of Direct Marketing Strategies by Farmers and Its Impact on Farm Business Income. Agricultural and Resource Economics Review, Vol. 40(1), 2011: 1-19.
72. Detre, J., H. Uematsu, Ashok K. Mishra. The Influence of GM Crop Adoption on the Profitability on Farms Operated by Young and Beginning Farmers. Agricultural Finance Review, Vol. 71(1), 2011:41-61.
73. Chang, H.H., Ashok K. Mishra. Does the Milk Income Loss Contract Program Improve the Technical Efficiency of US Dairy Farms? Journal of Dairy Science, Vol. 94, 2011: 2945-2951.
74. Detre, J. T. B. Mark, Ashok K. Mishra, and A. Adhikari. Linkage between Direct Marketing and Farm Income: Double Hurdle Approach. Agribusiness: an International Journal, Vol. 27(1), 2011:19-23.
75. Mishra, Ashok K, R. P. Williams, and J. D. Detre. Internet Access and Internet Purchasing Patterns of Farm Households Agricultural and Resource Economics Review, Vol. 38(2), 2009: 1-10.
76. Thompson, W., Ashok K. Mishra, and J. Dewbre. Farm Household Income and Transfer Efficiency: An Evaluation of U.S. Farm Program Payments. American Journal of Agricultural Economics, Vol. 91(5), 2009: 1296-1301.
77. Mishra, Ashok K., Livanis, G.T., Moss, C.B. Did the Federal Agriculture Improvement and Reform Act of 1996 Affect Farmland Values? Entropy, Vol. 13, 2011:668-682.
78. D'Antoni, J., Ashok K. Mishra., A. Barkley. Feast or Flee: Government Payments and Labor Migration from Agriculture. Forthcoming, Journal of Policy Modeling, 2011.
79. Durguner, S., and A.L. Katchova. Credit Risk Models by Type of Business. The Business Review 17(2011), forthcoming.
80. Detre, Joshua D., Michael A. Gunderson, Christine A. Wilson, and Brian C. Briggeman, Ag Lending: The Next Generation, Agricultural Finance Review. Vol. 71, No. 3, 2011.
81. Gunderson, M.A., J.D. Detre, B.C. Briggeman, C.W. Wilson. Ag Lending: The Next Generation,Agricultural Finance Review, 71(3)(2011): In press.
82. Escalante, C.L., S.L. Perkins, and F.I. Santos. When the Seasonal Foreign Farm Workers Are Gone.Journal of the American Society of Farm Managers and Rural Appraisers,74,1(2011): 83-96.
83. Ferrer, M.C., E.G. Fonsah, and C.L. Escalante. Risk Efficient Fumigant-Mulching System Alternatives for Bell Pepper Production.Journal of the American Society of Farm Managers and Rural Appraisers,74,1(2011): 162-174.
84. Dressler, Jonathan B. and Loren W. Tauer, Revealing an Equitable Income Allocation among Dairy Farm Partnerships, Presentation at the Agricultural and Applied Economics Meetings, Pittsburgh, Pennsylvania, July 24-26, 2011.
85. Paulson, N.D., G.D. Schnitkey, and B.J. Sherrick. 2010. Rental Arrangements and Risk Mitigation of Crop Insurance and Marketing: Impacts in the Corn-Belt. Agricultural Finance Review 70(3): 399-413.
86. Paulson, N.D., A.L. Katchova, and S.H. Lence. 2010. An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans. Journal of Agricultural and Food Industrial Organization 8(1): Article 4.
87. Mishra, Ashok K, H.S. El-Osta, S. Shaik. Succession Decisions in U.S. Family Farm Businesses. Journal of Agricultural and Resource Economics 35(1), 2010:133-152.
88. Detre, J., Ashok K. Mishra, A. Adhikari. Factor Affecting the Adoption of Genetically Modified Crops by Young and Beginning U.S. Farmers and Rancher Journal of the American Society of Farm Managers and Rural Appraisers Vol. 71 (1), 2010: 130-144.
89. Mishra, Ashok K, C. H. Wilson, and R. P. Williams. Factors Affecting the Financial Performance of New and Beginning Farmers. Agricultural Finance Review, 69(2), 2009: 160-79.
90. Detre, J., H. Uematsu, Ashok K. Mishra. The Influence of GM Crop Adoption on the Profitability on Farms Operated by Young and Beginning Farmers. Agricultural Finance Review, Vol. 71(1), 2011:41-61.
91. Gillespie, J. and Ashok K. Mishra. Off-farm Employment and Reasons for Entering Farming as Determinants of Production Enterprise Selection in US Agriculture. The Australian Journal of Agricultural and Resource Economics, 55, 2011: 411-428.
92. Kropp, J. D. and A. L. Katchova. The Effects of Direct Payments on Liquidity and Repayment Capacity of Beginning Farmers, Agricultural Finance Review, 71, 3(2011) forthcoming.
93. Ahrendsen, B.L., and A.L. Katchova. Financial Ratio Analysis using ARMS Data. Agricultural Finance Review, forthcoming.
94. Kropp, J., and A.L. Katchova. The Effect of Direct Payments on Liquidity and Repayment Capacity for Beginning Farmers.Agricultural Finance Review 71(2011), forthcoming.
95. Meyer, L., J. Durguner, S., and A.L. Katchova. Repayment Capacity of Farmers: A Balanced Panel Data Approach. Journal of Applied Economics and Policy 30(2011):14-30.
96. Hunter, A.L. Katchova, S. Lovett, D. Thilmany, M. Sullins, and A. Card. Approaching Beginning Farmers as a New Stakeholder for Extension. Choices 26(2011), 5: 1-7.
97. Fannin, J. Matthew, Joshua D. Detre, Jeanne St. Romain, and Laura Falgoust, Municipal versus County Government Financial Health following a Natural Disaster: Does Size Matter? Evidence from Louisiana following the 2005 Hurricane Season, Southern Regional Science Association Annual Meeting (New Orleans, LA, March 23-27, 2011).
98. Fannin, J. Matthew, John D. Barreca, and Joshua D. Detre, The Role of Public Wealth on Recovery and Resiliency to Natural Disasters in Rural Communities Agricultural and Applied Economics Association and Northeastern Agricultural Economics and Resource Association Joint Annual Meeting (Pittsburg, PA; July 24-26, 2011).
99. Detre, Joshua D., Hiroki Uematsu, and Ashok K. Mishra, "Adoption of Technology and Its Impact on Profitability of Young and Beginning Farmers: A Quantile Regression Approach," Agricultural Finance Review. Vol. 71, No. 1, 2011 (41-61).
100. Paulson, N.D. and G.D. Schnitkey. 2012. Policy Concerns of Midwestern Grain Producers for the 2012 Farm Bill. American Journal of Agricultural Economics, forthcoming
101. Noland, K., J. Norvell, N.D. Paulson, and G.D. Schnitkey. 2011. The Role of Farmland in an Investment Portfolio: Analysis of Illinois Farmland. Journal of the American Society of Farm Managers and Rural Appraisers 74(1): 149-161.
102. Paulson, N.D. and G.D. Schnitkey. 2010. Expected Payments and Considerations for the New ACRE Program. Journal of the American Society of Farm Managers and Rural Appraisers 73(1): 218-229.
103. Raghunathan, U., C.L. Escalante, J.H. Dorfman, J. Houston, and G. Ames. The Effect of Agriculture on Repayment Efficiency: A look at MFI borrowing groups.Agricultural Economics,42,4(July 2011): 465-474.
104. Jacobsen, K.L., C.L. Escalante, and C.F. Jordan. Economic Analysis of Experimental Organic Agricultural Systems on a Highly Eroded Soil of the Georgia Piedmont, USA.Journal of Renewable Agriculture and Food Systems, 25,4(2010): 296-308.
105. Chang, H.H., Ashok K. Mishra, and M. Livingston. Agricultural Policy and Its Impact on Fuel Usage: Empirical Evidence from Farm Household Analysis. Applied Energy, Vol. 88, 2011:348-353.
106. Darby, Paul, Tyler B. Mark, Joshua D. Detre, and Michael Salassi, Advanced Biofuel Production in Louisiana Sugar Mills: an Application of Real Options Analysis Agricultural and Applied Economics Association and Northeastern Agricultural Economics and Resource Association Joint Annual Meeting (Pittsburg, PA; July 24-26, 2011).
107. Detre, Joshua D., and Michael A. Gunderson, "The Triple Bottom Line: What is the Short Run Impact on the Returns to Agribusiness Stocks," International Food and Agribusiness Management Review. Vol. 14, No. 4, 2011 (41-61).
108. Gloy, B.A. The Potential Supply of Carbon Dioxide Offsets from the Anaerobic Digestion of Dairy Waste in the United States. Applied Economic Perspectives and Policy, 33:1(2011):59-78.
109. Baylis, K., N.D. Paulson, and G. Piras. 2011. Spatial Approaches to Panel Data in Agricultural Economics: A Climate Change Application. Journal of Agricultural and Applied Economics 43(3): 325-338. (senior authorship is shared)
110. Gloy, B.A. and J.B. Dressler. Financial Barriers to the Adoption of Anaerobic Digestion on U.S. Livestock Operations. Agricultural Finance Review, 70:2(2010):157-168.
111. Roberts, K.G., B.A. Gloy, S. Joseph, N.R. Scott, and J. Lehmann. Life Cycle Assessment of Biochar Systems: Estimating the Energetic, Economic and Climate Change Potential. Environmental Science and Technology, 44:2(2010):827-833.
112. Maung TA, Gustafson CR, The economic feasibility of sugar beet biofuel production in central North Dakota, Biomass and Bioenergy (2011), http://dx.doi.org/10.1016/j.biombioe.2011.05.022
113. Maung T. et. al. Market Information on Sourcing Cellulosic Feedstock for Biofuel Production in the Northern Plains Region of the United States Journal of Agricultural Science and Technology. 2011, forthcoming