IDEAS home Printed from https://ideas.repec.org/a/ags/jasfmr/197095.html
   My bibliography  Save this article

Impact of Lower, More Volatile Net Farm Incomes, and Higher Interest Rates on Repayment Risk

Author

Listed:
  • Banard, Freddie L.
  • Yeager, Elizabeth A.

Abstract

Real returns to farm operators have been at the highest level since 1973. However, indications from the USDA and Federal Open Market Committee are that returns are not projected to remain at those levels and interest rates will rise in the next decade. This paper evaluates the potential impact on repayment risk of three interest rates, three levels of leverage, and eight deviations from a base situation. Results indicate as the level of leverage and interest rate increased, the business became more susceptible to repayment risk, but even at moderate interest rates, increasing levels of leverage should be viewed with caution. Freddie

Suggested Citation

  • Banard, Freddie L. & Yeager, Elizabeth A., 2014. "Impact of Lower, More Volatile Net Farm Incomes, and Higher Interest Rates on Repayment Risk," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2014, pages 1-20.
    • Handle: RePEc:ags:jasfmr:197095
    DOI: 10.22004/ag.econ.197095
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/197095/files/401-Barnard_reduced.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.197095?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jason Henderson & Nathan Kauffman, 2013. "The wealth effect in U.S. agriculture," Main Street Economist, Federal Reserve Bank of Kansas City, issue 1.
    2. Barnard, Freddie L. & Ellinger, Paul N. & Wilson, Christine A., 2010. "Measurement Issues in Assessing Farm Profitability through Cash Tax Returns," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2010, pages 1-11.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Loren Koenigstein & Jebaraj Asirvatham, 2025. "Assessing Economic Profit and Operating Costs: A Comparative Analysis of Central and Southern Illinois Grain Farms," Journal of Agricultural Science, Canadian Center of Science and Education, vol. 17(8), pages 1-1, July.
    2. Barnard, Freddie L. & Yeager, Elizabeth A., 2017. "Evaluating Effectiveness of Operating Strategies and Loan Term Changes on Repayment Capacity," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2017.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yeager, Elizabeth A. & Banard, Freddie L., 2014. "Effectiveness of Increasing Liquidity as a Response to Increased Repayment Risk: A Case Study," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2014, pages 1-19.
    2. Barnard, Freddie L. & Yeager, Elizabeth, . "The Perfect Storm: A Case Study Illustrating How a Series of Events Led One Farm Operator to Develop a Risk Management Plan that Includes a Lender’s Perspective," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2013, pages 1-15.
    3. Mahnken, Curtis & Nordquist, Dale, 2017. "Profitability migration in Minnesota farms," 21st Congress, Edinburgh, Scotland, July 2-7, 2017 345777, International Farm Management Association.
    4. Barnard, Freddie L. & Yeager, Elizabeth & Miller, Alan, . "New Features Added to the Purdue Farm Financial Analysis Spreadsheet," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2013, pages 1-14.
    5. Paul N. Ellinger & Bruce L. Ahrendsen & Charles B. Moss, 2012. "Balance sheet and income statement issues in ARMS," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 72(2), pages 247-253, July.

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jasfmr:197095. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/asfmrea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.