The years following the 2008 financial crisis have been marked by general economic malaise, yet the period has been relatively prosperous for the agricultural sector. As a result, many investors have recognized the potential for farmland as an investment alternative. This study compares farmland’s risk and return to those of competing investment alternatives. Farmland is shown to be an attractive investment alternative with relatively high mean returns, low variability, low correlation with financial markets, and strength relative to other investments following the 2008 financial crisis.
{"title":"Farmland versus Alternative Investments Before and After the 2008 Financial Crisis","authors":"Todd H. Kuethe, Nicholas Walsh, J. Ifft","doi":"10.22004/AG.ECON.161492","DOIUrl":"https://doi.org/10.22004/AG.ECON.161492","url":null,"abstract":"The years following the 2008 financial crisis have been marked by general economic malaise, yet the period has been relatively prosperous for the agricultural sector. As a result, many investors have recognized the potential for farmland as an investment alternative. This study compares farmland’s risk and return to those of competing investment alternatives. Farmland is shown to be an attractive investment alternative with relatively high mean returns, low variability, low correlation with financial markets, and strength relative to other investments following the 2008 financial crisis.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"101 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116434081","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Many agricultural producers purchased capital items the past few years and some used borrowed funds to finance the purchase. The principal payments on those term loans are paid from net farm income. This paper discusses the sensitivity of farm loan repayment capacity to changes in the gross revenue and operating expenses that determine net farm income. Sensitivity analysis is conducted using the Purdue Farm Financial Analysis Spreadsheet. The sensitivity analysis and application of the updated program are illustrated using a case study
{"title":"Repayment Capacity Sensitivity Analysis Using Purdue Farm Financial Analysis Spreadsheet","authors":"Freddie L. Barnard, E. Yeager, Alan Miller","doi":"10.22004/AG.ECON.161502","DOIUrl":"https://doi.org/10.22004/AG.ECON.161502","url":null,"abstract":"Many agricultural producers purchased capital items the past few years and some used borrowed funds to finance the purchase. The principal payments on those term loans are paid from net farm income. This paper discusses the sensitivity of farm loan repayment capacity to changes in the gross revenue and operating expenses that determine net farm income. Sensitivity analysis is conducted using the Purdue Farm Financial Analysis Spreadsheet. The sensitivity analysis and application of the updated program are illustrated using a case study","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132530706","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
California farm managers and rural appraisers were surveyed in Fall 2009 to rank the importance of several skills pertaining to their profession. Additional questions included age, income, years of experience, professional designations and affiliations, and whether the Valuation Code of Conduct (VCC) had affected their appraisal activities. On average, California rural appraisers were 52 years old, over half had incomes of $100,000 or greater, and the VCC has had little impact on their practice. Similar to previous studies, communication skills are thought more important than personal or technical skills.
{"title":"What Our Students Should Know: Perspectives from California - Revisited","authors":"W. Howard, Lindy Wilson","doi":"10.22004/AG.ECON.118950","DOIUrl":"https://doi.org/10.22004/AG.ECON.118950","url":null,"abstract":"California farm managers and rural appraisers were surveyed in Fall 2009 to rank the importance of several skills pertaining to their profession. Additional questions included age, income, years of experience, professional designations and affiliations, and whether the Valuation Code of Conduct (VCC) had affected their appraisal activities. On average, California rural appraisers were 52 years old, over half had incomes of $100,000 or greater, and the VCC has had little impact on their practice. Similar to previous studies, communication skills are thought more important than personal or technical skills.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122860355","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Solvency ratios are normally used as an indicator of the long-term viability of the farm business. Farms with high leverage have a greater likelihood of going bankrupt. Bankruptcy occurs because a farm loses its equity. However, for a farm to lose equity, it must generate negative profits or family living withdrawals must exceed profits and any equity increases. In either case, low profitability is likely a major factor in a farm losing equity. This might imply that highly leveraged farms, which pay more in interest expense, are earning less profit than those farms without debt. Thus it might be possible to predict future profitability based on solvency ratios. This paper tests that hypothesis but finds a naive model of looking at past profit to predict future profits works better than using solvency ratios.
{"title":"Using Solvency Ratios to Predict Future Profitability","authors":"G. Ibendahl","doi":"10.22004/AG.ECON.236666","DOIUrl":"https://doi.org/10.22004/AG.ECON.236666","url":null,"abstract":"Solvency ratios are normally used as an indicator of the long-term viability of the farm business. Farms with high leverage have a greater likelihood of going bankrupt. Bankruptcy occurs because a farm loses its equity. However, for a farm to lose equity, it must generate negative profits or family living withdrawals must exceed profits and any equity increases. In either case, low profitability is likely a major factor in a farm losing equity. This might imply that highly leveraged farms, which pay more in interest expense, are earning less profit than those farms without debt. Thus it might be possible to predict future profitability based on solvency ratios. This paper tests that hypothesis but finds a naive model of looking at past profit to predict future profits works better than using solvency ratios.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123446994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
T. Griffin, T. Mark, Shannon L. Ferrell, Todd Janzen, G. Ibendahl, Jeffrey D Bennett, J. Maurer, Aleksan Shanoyan
The promise of “big data” has been praised by the popular media. Concepts and impediments surrounding big data are discussed relative to both the current status and anticipated direction of the industry. Rural property professionals, such as farm managers and rural appraisers, have an opportunity to position themselves and their clients to make effective use of big data. Topics relevant to big data in agriculture include farmland values, lease arrangements, data ownership, data as an asset and its valuation, and the ramifications of wireless connectivity. The challenges that rural property professionals may encounter when integrating big data into their portfolio of services are described.
{"title":"Big Data Considerations for Rural Property Professionals","authors":"T. Griffin, T. Mark, Shannon L. Ferrell, Todd Janzen, G. Ibendahl, Jeffrey D Bennett, J. Maurer, Aleksan Shanoyan","doi":"10.22004/AG.ECON.236662","DOIUrl":"https://doi.org/10.22004/AG.ECON.236662","url":null,"abstract":"The promise of “big data” has been praised by the popular media. Concepts and impediments surrounding big data are discussed relative to both the current status and anticipated direction of the industry. Rural property professionals, such as farm managers and rural appraisers, have an opportunity to position themselves and their clients to make effective use of big data. Topics relevant to big data in agriculture include farmland values, lease arrangements, data ownership, data as an asset and its valuation, and the ramifications of wireless connectivity. The challenges that rural property professionals may encounter when integrating big data into their portfolio of services are described.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115146938","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
B. Schurle, Christine A. Wilson, Allen M. Featherstone, H. Remaury, Jacob Harmon
This article discusses asset bubbles, the Kansas and Illinois land markets, estimates land values, and develops a land price/earnings ratio. Current land sales data are also examined. Finally, we examine relationships between land values and interest rates, inflation rates, and cash rents. Results show that real land values increase substantially when inflation increases. Recent land values are explored for both Kansas and Illinois with somewhat differing results. Development of land price bubbles could be enhanced if inflation becomes more widespread and land values are viewed as having good protection from inflation. Market fundamentals would suggest that an increase in land prices due to inflation occurs because of an increase in cash rental rates and not through a dramatic change in the price earnings ratio.
{"title":"Asset Bubbles, Inflation, and Agricultural Land Values","authors":"B. Schurle, Christine A. Wilson, Allen M. Featherstone, H. Remaury, Jacob Harmon","doi":"10.22004/AG.ECON.190731","DOIUrl":"https://doi.org/10.22004/AG.ECON.190731","url":null,"abstract":"This article discusses asset bubbles, the Kansas and Illinois land markets, estimates land values, and develops a land price/earnings ratio. Current land sales data are also examined. Finally, we examine relationships between land values and interest rates, inflation rates, and cash rents. Results show that real land values increase substantially when inflation increases. Recent land values are explored for both Kansas and Illinois with somewhat differing results. Development of land price bubbles could be enhanced if inflation becomes more widespread and land values are viewed as having good protection from inflation. Market fundamentals would suggest that an increase in land prices due to inflation occurs because of an increase in cash rental rates and not through a dramatic change in the price earnings ratio.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"52 10","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131579161","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Farmland values have recently increased dramatically in the Midwest, attracting investors from outside of agriculture and causing many inside agriculture to question whether a speculative bubble has formed. This article addresses that question by presenting an economic assessment of the facts related to farmland values across regions of the United States to give a more complete outlook for Midwestern farmland prices. After presenting an analysis of farmland values, this article concludes with a discussion of some often-ignored factors that should be at the center of the current debate.
{"title":"Rising Farmland Values: An Indicator of Regional Economic Performance or a Speculative Bubble?","authors":"Steven c. Blank, K. Erickson, C. Hallahan","doi":"10.22004/AG.ECON.190724","DOIUrl":"https://doi.org/10.22004/AG.ECON.190724","url":null,"abstract":"Farmland values have recently increased dramatically in the Midwest, attracting investors from outside of agriculture and causing many inside agriculture to question whether a speculative bubble has formed. This article addresses that question by presenting an economic assessment of the facts related to farmland values across regions of the United States to give a more complete outlook for Midwestern farmland prices. After presenting an analysis of farmland values, this article concludes with a discussion of some often-ignored factors that should be at the center of the current debate.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123302565","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
One alternative to a cow-calf-yearling operation is a stocker operation. Relative profitability of cow-calf-yearling versus stockers is well documented. Little is known, however, about the economics of the transition process itself. We analyze benefits, costs, and risks of switching from cow-calf-yearling to stockers over a one-year versus seven-year transition period. Results show a gradual transition is superior to an abrupt transition. A gradual transition to stockers generates more net present value than cowcalf-yearlings, given a sufficiently high discount rate or short planning horizon. Farm managers and consultants should include transition-period benefits and costs when analyzing alternative enterprises.
{"title":"Economics of Transitioning from a Cow-Calf-Yearling Operation to a Stocker Operation","authors":"Sean Ruff, D. Peck, C. Bastian, W. Cook","doi":"10.22004/AG.ECON.236654","DOIUrl":"https://doi.org/10.22004/AG.ECON.236654","url":null,"abstract":"One alternative to a cow-calf-yearling operation is a stocker operation. Relative profitability of cow-calf-yearling versus stockers is well documented. Little is known, however, about the economics of the transition process itself. We analyze benefits, costs, and risks of switching from cow-calf-yearling to stockers over a one-year versus seven-year transition period. Results show a gradual transition is superior to an abrupt transition. A gradual transition to stockers generates more net present value than cowcalf-yearlings, given a sufficiently high discount rate or short planning horizon. Farm managers and consultants should include transition-period benefits and costs when analyzing alternative enterprises.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121652833","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Concern over rising and volatile energy prices, the desire for personal energy independence, and the promotion of cleaner energy sources has led many farmers to consider oilseed crops as a source of biodiesel. Analysis of the economics of on-farm biodiesel from dryland camelina (Camelina sativa) shows that camelina meal is the primary product. The cost savings of using meal as livestock feed accounts for most of the value. Both individual and group ownership perspectives are addressed. Combining resources to achieve maximum output results in a more efficient process and allows each producer to have less capital outlay.
{"title":"An Analysis of On-Farm Feed and Fuel from Dryland Camelina","authors":"T. Foulke, Milton E. Geiger, B. Hess","doi":"10.22004/AG.ECON.190723","DOIUrl":"https://doi.org/10.22004/AG.ECON.190723","url":null,"abstract":"Concern over rising and volatile energy prices, the desire for personal energy independence, and the promotion of cleaner energy sources has led many farmers to consider oilseed crops as a source of biodiesel. Analysis of the economics of on-farm biodiesel from dryland camelina (Camelina sativa) shows that camelina meal is the primary product. The cost savings of using meal as livestock feed accounts for most of the value. Both individual and group ownership perspectives are addressed. Combining resources to achieve maximum output results in a more efficient process and allows each producer to have less capital outlay.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"86 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126276559","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
J. Shockley, William A. Osborne, C. Dillon, Jerry S. Pierce
The ability of operators and managers to benchmark farm performance with those in their region is a great starting point for cost management. This study expands on the traditional one-tier stratification of farm-level data and uses a two-tier approach using farm income and expense allocation as categories of performance. Farm managers, consultants, and landowners can utilize this framework to provide more insights and management opportunities for their self or their clientele. More specifically, they can identify expenditure characteristics and the capital allocation of the top managers for benchmarking against their own operations.
{"title":"A Two-Tiered Benchmarking Analysis for Cost Management","authors":"J. Shockley, William A. Osborne, C. Dillon, Jerry S. Pierce","doi":"10.22004/AG.ECON.236657","DOIUrl":"https://doi.org/10.22004/AG.ECON.236657","url":null,"abstract":"The ability of operators and managers to benchmark farm performance with those in their region is a great starting point for cost management. This study expands on the traditional one-tier stratification of farm-level data and uses a two-tier approach using farm income and expense allocation as categories of performance. Farm managers, consultants, and landowners can utilize this framework to provide more insights and management opportunities for their self or their clientele. More specifically, they can identify expenditure characteristics and the capital allocation of the top managers for benchmarking against their own operations.","PeriodicalId":178727,"journal":{"name":"Journal of American Society of Farm Managers and Rural Appraisers","volume":"83 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134149193","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：