IDEAS home Printed from https://ideas.repec.org/p/ags/aaea15/205282.html
   My bibliography  Save this paper

The Effects of Business Maturity, Experience and Size on the Farms’ Economic Vitality: A Credit Migration Analysis of Farm Service Agency Borrowers

Author

Listed:
  • Rusiana, Hofner D.
  • Escalante, Cesar L.

Abstract

This paper examines the relative financial strength and endurance of several paired classes of farmers according to business maturity (beginning versus mature farm businesses), farm operators’ age/experience (young versus older, more experienced farm operators), and farm size (small versus large farm businesses) by utilizing random-effects ordered logistic techniques. Results show that increasing farm size will lead to a higher probability of class upgrades. Being a young farm operator, meanwhile, decreases this probability. Positive changes in money supply and farm real estate values were found to increase the likelihood of credit upgrades. Results also show trend reversal of credit risk movement, where upgrades (downgrades) are more likely to be followed by downgrades (upgrades).

Suggested Citation

  • Rusiana, Hofner D. & Escalante, Cesar L., 2015. "The Effects of Business Maturity, Experience and Size on the Farms’ Economic Vitality: A Credit Migration Analysis of Farm Service Agency Borrowers," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205282, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:205282
    DOI: 10.22004/ag.econ.205282
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/205282/files/The%20Effects%20of%20Business%20Maturity_%20Experience%20and%20Size%20on%20the%20Farms_%20Economic%20Vitality.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.205282?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. Low, Sarah A. & Vogel, Stephen J., 2011. "Direct and Intermediated Marketing of Local Foods in the United States," Economic Research Report 118025, United States Department of Agriculture, Economic Research Service.
    2. Jill M. Phillips & Ani L. Katchova, 2004. "Credit score migration analysis of farm businesses: conditioning on business cycles and migration trends," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 64(1), pages 1-15, May.
    3. Brent A. Gloy & Eddy L. LaDue & Michael A. Gunderson, 2005. "Credit risk migration and downgrades experienced by agricultural lenders," Agricultural Finance Review, Emerald Group Publishing, vol. 65(1), pages 1-16, May.
    4. Patrick, George F. & Whitaker, Suzanne H. & Blake, Brian F., 1980. "Farmers' Goals And Risk Aversion: Some Preliminary Analyses," Risk Analysis in Agriculture: Research and Educational Developments, January 16-18, 1980, Tucson, Arizona 271564, Regional Research Projects > W-149: An Economic Evaluation of Managing Market Risks in Agriculture.
    5. Kauffman, Nathan S., 2013. "Credit Markets and Land Ownership for Young and Beginning Farmers," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 28(2), pages 1-5.
    6. Williamson, James, 2014. "Beginning Farmers and Ranchers and the Agricultural Act of 2014," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue 05, pages 1-1, June.
    7. Thomas F. Brady & William B. English & William R. Nelson, 1998. "Recent changes to the Federal Reserve's survey of terms of business lending," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Aug, pages 604-615.
    8. Mishra, Ashok K. & Durst, Ron L. & El-Osta, Hisham S., 2005. "How Do U.S. Farmers Plan for Retirement?," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-7, April.
    Full references (including those not matched with items on IDEAS)

    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. Rusiana, Hofner & Brewer, Brady & Escalante, Cesar & Dodson, Charles, 2016. "Transition Probability Approach in the Evaluation of Relative Financial Strength and Endurance of Farm Service Borrowers under Recessionary Conditions," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229813, Southern Agricultural Economics Association.
    2. Martinez, Steve W. & Park, Timothy, 2021. "Marketing Practices and Financial Performance of Local Food Producers: A Comparison of Beginning and Experienced Farmers," USDA Miscellaneous 313069, United States Department of Agriculture.
    3. Pederson, Glenn D. & Chu, Yu-Szu & Richardson, D. Wynn, 2011. "Community Bank Assessment of Agricultural Portfolio Risk Exposure: The Literature and the Methods in Use," Staff Papers 107483, University of Minnesota, Department of Applied Economics.
    4. Key, Nigel, . "Direct-to-Consumer Marketing and the Survival and Growth of Beginning Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 49(01).
    5. Hofner D. Rusiana & Cesar L. Escalante & Brady E. Brewer, 2024. "Financial Resilience of Young and Beginning Farmers under Recession: A Transition Probability Approach," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 14(3), pages 1-5.
    6. Shermain Hardesty & Gail Feenstra & David Visher & Tracy Lerman & Dawn Thilmany-McFadden & Allison Bauman & Tom Gillpatrick & Gretchen Nurse Rainbolt, 2014. "Values-Based Supply Chains," Economic Development Quarterly, , vol. 28(1), pages 17-27, February.
    7. Pei-An LIAO & Hung-Hao CHANG & Junlin HE & Kannika SAELIW, 2017. "Diversification of marketing strategies among small farms: empirical evidence from family farms in Taiwan," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(11), pages 493-501.
    8. Liu, Ruifeng & ,, 2021. "What We Can Learn from the Interactions of Food Traceable Attributes? a Case Study of Fuji Apple in China," 2021 Conference, August 17-31, 2021, Virtual 315916, International Association of Agricultural Economists.
    9. Printezis, Iryna & Grebitus, Carola, 2018. "Marketing Channels for Local Food," Ecological Economics, Elsevier, vol. 152(C), pages 161-171.
    10. Watson, Philip & Cooke, Stephen & Kay, David & Alward, Greg & Morales, Alfonso, 2017. "A Method for Evaluating the Economic Contribution of a Local Food System," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 42(2), May.
    11. Stewart, Hayden & Dong, Diansheng, 2018. "The Relationship Between Patronizing Direct-to-Consumer Outlets and a Household’s Demand for Fruits and Vegetables," Economic Research Report 276254, United States Department of Agriculture, Economic Research Service.
    12. Rachel M. Shellabarger & Rachel C. Voss & Monika Egerer & Shun-Nan Chiang, 2019. "Challenging the urban–rural dichotomy in agri-food systems," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 36(1), pages 91-103, March.
    13. Smith, Bobby J. II & Kaiser, Harry M. & Gómez, Miguel I., 2013. "Identifying Factors Influencing a Hospital’s Decision to Adopt a Farm-to-Hospital Program," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(3), pages 1-10.
    14. Todd M. Schmit & Becca B. R. Jablonski & Yuri Mansury, 2016. "Assessing the Economic Impacts of Local Food System Producers by Scale," Economic Development Quarterly, , vol. 30(4), pages 316-328, November.
    15. Xu, Xun & Keahiolalo, Kristopher & Loke, Matthew K. & Leung, Pingsun, 2015. "Local Premium or Local Discount: The Case of Packaged Fresh Tomatoes in Hawaii," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 47(3), June.
    16. Timothy Park & Ashok K. Mishra & Shawn J. Wozniak, 2014. "Do farm operators benefit from direct to consumer marketing strategies?," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 213-224, March.
    17. Katchova, Ani L. & Demko, Iryna & Vogel, Stephen, 2016. "Direct-to-Consumer Marketing by U.S. Farms," 149th Seminar, October 27-28, 2016, Rennes, France 245163, European Association of Agricultural Economists.
    18. Rawaa Laajimi & Laurence Delattre & Hubert Jayet, 2024. "What demand and supply forces determine the location of off-farm points of sale in short food supply chains: Evidence from Nord and Pas-de-Calais, France," French Stata Users' Group Meetings 2024 25, Stata Users Group.
    19. Jonathan B. Dressler & Jeffrey R. Stokes, 2010. "Survival analysis and mortgage termination at AgChoice ACA," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 70(1), pages 21-36, May.
    20. Cleary, Rebecca & Goetz, Stephan J. & Thilmany McFadden, Dawn D. & Ge, Houtian, 2017. "Location and Profit Drivers of Local Food Hubs," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258538, Agricultural and Applied Economics Association.

    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:aaea15:205282. 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/aaeaaea.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.