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Consolidation in the Farm Credit System: The Case of AgCountry and United

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  • Hanson, Erik D.

Abstract

Agricultural lenders provide an important service in America’s agricultural economy. In recent years, consolidation has occurred in many aspects of agriculture, including agricultural lending. This educational case study examines consolidation in the Farm Credit System (FCS), which is a system of cooperatively owned agricultural lending associations. The merger between AgCountry Farm Credit Services and United FCS illustrates some drivers of consolidation in the Farm Credit System and provides opportunities to consider the advantages and disadvantages of a merger. The perspectives of the associations’ leaders, member-owners, and employees are explored, allowing students to offer tactical and strategic advice to these stakeholders. This case study is intended for undergraduate students taking courses in agricultural finance, agricultural lending, or cooperatives.

Suggested Citation

  • Hanson, Erik D., 2021. "Consolidation in the Farm Credit System: The Case of AgCountry and United," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 2(6), January.
    • Handle: RePEc:ags:aaeatr:308496
    DOI: 10.22004/ag.econ.308496
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    References listed on IDEAS

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    1. Troy Davig & Michal Kowalik & Charles S. Morris & Kristen Regehr, 2015. "Bank consolidation and merger activity following the crisis," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 31-49.
    2. Taylor Witte & Eric A DeVuyst & Brian Whitacre & Rodney Jones, 2015. "Modeling the impact of distance between offices and borrowers on agricultural loan volume," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 75(4), pages 484-498, November.
    3. David Freshwater, 1997. "Competition and Consolidation in the Farm Credit System," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 19(1), pages 219-227.
    4. Charles A. Towe & Mitchell J. Morehart, 2009. "Credit Constraints: Their Existence, Determinants, and Implications for U.S. Farm and Nonfarm Sole Proprietorships," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 275-289.
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