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Adjustable -Term Financing Of Farm Loans

Author

Listed:
  • Pederson, Glenn D.
  • Duffy, Michael D.
  • Boehlje, Michael
  • Craven, Robert

Abstract

Firm-level simulation is used to analyze farm financial performance with adjustable-rate, adjustable-term, and fixed-rate financing. Adjustable-term financing is accomplished by changing the term of the loan, instead of payment size, when interest rates change. Simulation results indicate that the adjustable-term loan is an innovation which reduces the cash flow destabilizing effects of volatile interest rates.

Suggested Citation

  • Pederson, Glenn D. & Duffy, Michael D. & Boehlje, Michael & Craven, Robert, 1991. "Adjustable -Term Financing Of Farm Loans," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(2), pages 1-12, December.
    • Handle: RePEc:ags:wjagec:32601
    DOI: 10.22004/ag.econ.32601
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    References listed on IDEAS

    as
    1. Moe, Lonn & Thompson, Jerry L., 1984. "Cash Flow Implications Of Fixed Versus Variable Interest Rate Debt Structures," Staff Papers 13470, University of Minnesota, Department of Applied Economics.
    2. David J. Leatham & Timothy G. Baker, 1988. "Farmers' Choice of Fixed and Adjustable Interest Rate Loans," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(4), pages 803-812.
    3. LaDue, Eddy L. & Zook, Gordon A., 1984. "Variable Interest Rates And The Financial Performance Of Dairy Farm Businesses," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 13(2), pages 1-9, October.
    4. Boehlje, Michael & Pederson, Glenn D., 1988. "Farm Finance: The New Issues," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 3(3), pages 1-4.
    5. Tauer, Loren W., 1984. "Graduated Payment Loan Schedules Under Simple Interest," Research Bulletins 184053, Cornell University, Department of Applied Economics and Management.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Agricultural Finance;

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