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The Liquidity of Illinois Grain Farms: Working Capital to Operating Expense Ratio

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  • Mashange, Gerald
  • Zwilling, Bradley
  • Raab, Dwight

Abstract

According to the 2024 joint survey conducted by the American Bankers Association (ABA) and Farmer Mac, lenders are most concerned about producers’ liquidity and farm income levels (see ABA-Farmer Mac Agricultural Lender Survey, August 2024). The USDA’s Economic Research Service is projecting farm commodity cash receipts to decline by $16.6 billion (3.1%) to $516.9 billion in 2024, mainly driven by lower crop receipts. However, lower production expenses are expected to cushion the overall decline in farm incomes (see USDA-ERS, December 3, 2024). In this article, we will examine the trends in liquidity of Illinois grain farms by measuring the working capital to accrual operating expense ratio, using Illinois Farm Business Farm Management (FBFM) data. We expect 2025 to be riddled with uncertainty, from domestic policy to international trade and relations. Therefore, having ample working capital to weather potential adverse shifts is recommended.

Suggested Citation

  • Mashange, Gerald & Zwilling, Bradley & Raab, Dwight, 2025. "The Liquidity of Illinois Grain Farms: Working Capital to Operating Expense Ratio," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 14(227).
    • Handle: RePEc:ags:illufd:358380
    DOI: 10.22004/ag.econ.358380
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    Keywords

    Agribusiness; Financial Management;

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