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Growth And Survival In Wheat Farming: The Impact Of Land Expansion And Borrowing Restraints

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  • Held, Larry J.
  • Helmers, Glenn A.

Abstract

Simulation is used to examine impacts of land expansion strategies and self-imposed borrowing limits upon growth and survival odds of a dryland wheat farm over a 15-year period. Compared to share-rent expansion, purchasing land shows only marginally great growth at best, with substantially higher odds of firm failure. A tradeoff of enhanced survival at the expense of reduced growth results from more conservative borrowing for land. The marginal value of liquidity (for assisting survival) is relatively high at lower levels of credit reserves.

Suggested Citation

  • Held, Larry J. & Helmers, Glenn A., 1981. "Growth And Survival In Wheat Farming: The Impact Of Land Expansion And Borrowing Restraints," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 6(2), pages 1-10, December.
  • Handle: RePEc:ags:wjagec:32577
    DOI: 10.22004/ag.econ.32577
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    References listed on IDEAS

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    1. A. N. Halter & G. W. Dean, 1965. "Use of Simulation in Evaluating Management Policies under Uncertainty: Application to a Large Scale Ranch," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(3), pages 557-573.
    2. Johnson, Stanley R. & Rausser, Gordon C., 1977. "Systems Analysis and Simulation: A Survey of Applications in Agricultural and Resource Economics," A Survey of Agricultural Economics Literature, Volume 2: Quantitative Methods in Agricultural Economics, 1940s to 1970s,, Agricultural and Applied Economics Association.
    3. Patrick, George F., 1979. "Effects Of Debt Levels And Loan Arrangements On Farm Firm Survival And Growth," Risk Management in Agriculture: Behavioral, Managerial, and Policy Issues, January 25-26, 1979, San Francisco, California 271464, Regional Research Projects > W-149: An Economic Evaluation of Managing Market Risks in Agriculture.
    4. Anderson, Jock R., 1974. "Simulation: Methodology and Application in Agricultural Economics," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 42(01), pages 1-53, March.
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    Cited by:

    1. Bharat M. Upadhyay & Douglas L. Young, 2005. "An Operational Approach for Evaluating Investment Risk: An Application to the No-Till Transition," Working Papers 2005-1, School of Economic Sciences, Washington State University.
    2. Upadhyay, Bharat Mani & Young, Douglas L., 2005. "An Operational Approach for Evaluating Investment Risk: An Application to the No-Till Transition," Working Papers 12958, Washington State University, School of Economic Sciences.
    3. Strauss, P.G. & Meyer, Ferdinand H. & Kirsten, Johann F., 2008. "Facilitating decision-making in agriculture by using a system of models," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(3), pages 1-19, September.
    4. Schnitkey, Gary D. & Taylor, C. Robert, 1987. "Conventional Capital Budgeting Versus Stochastic Dynamic Analysis Of Optimal Farmland Purchase And Sell Decisions," Illinois Agricultural Economics Staff Paper 244662, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    5. Bharat M. Upadhyay & Douglas L. Young, 2004. "An Operational Approach For Evaluating Investment Risk: An Application To The No-Till Transition," Others 0412002, University Library of Munich, Germany.

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