IDEAS home Printed from https://ideas.repec.org/p/ags/nbaere/140460.html
   My bibliography  Save this paper

Recent And Projected Financial Conditions In Nebraska'S Farming Sector

Author

Listed:
  • Gessaman, Paul H.
  • Morris, Gayle A.

Abstract

Annual aggregate (sector) financial statements for Nebraska's farming sector were compiled for the 1960-80 period. An existing econometric model was updated to reflect sector financial relationships for the 1960-79 period. It was used to project sector financial statements for 1981-83 under alternate sets of assumptions using financial statement entries for 1980 as initial values. Comparisons of 1975 and 1980 sector financial statements with those projected for 1982 and 1983 provided numerous measures of the deteriorating financial position of the farming sector. Debt increases 1975-80 resulted in a declining sector equity ratio despite large increases in the current dollar value of assets during the period. Equity ratios were projected to decline further in 1982 and 1983 as financial assets were depleted and real estate values declined. Sector net income from farming was projected to continue its 1975-80 decline and be negative in 1982 and 1983. Debt extensions were an increasingly important source of sector liquidity 1975-80 and that trend was projected to continue in 1982-83. Financial stresses in the farming sector were expected to result in rapid modification of management approaches and actual revenue shortfalls and debt levels for 1982 and 1983 are expected to be less than those projected, but undoubtedly will be highly unfavorable. Major insights drawn from the 21-year sequence of sector financial statements included : (1) Equity liquidation through increased borrowing became a major source of sector liquidity during the period. (2) Financial flows through the sector increased greatly during the period of 21 years, but the purchasing power of sector net income was less at the end of the period than it had been during the early 1960's. (3) The ratio of debt repayments to net farm income was stable during the 1970's and increased three-fold during the 1980's as the sector's debt load increased and debt rollovers became more prevalent. (4) Proprietors' withdrawals for family living, taxes, and nonfarm investments exceeded sector net income in more than one half of the years and the resulting net disinvestment in the farming sector totaled to an estimated $2.9 billion in the 21 years.

Suggested Citation

  • Gessaman, Paul H. & Morris, Gayle A., 1983. "Recent And Projected Financial Conditions In Nebraska'S Farming Sector," Reports 140460, University of Nebraska-Lincoln, Department of Agricultural Economics.
    • Handle: RePEc:ags:nbaere:140460
    DOI: 10.22004/ag.econ.140460
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/140460/files/un-l-rr-131.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.140460?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. John B. Penson & David A. Lins & George D. Irwin, 1971. "Flow-of-Funds Social Accounts for the Farm Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(1), pages 1-7.
    2. K. Vind, 1971. "Comment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(1), pages 115-115.
    3. Lins, David A., 1973. "A Simulation Model of Farm Sector Social Accounts: With Projections to 1980," Technical Bulletins 158607, United States Department of Agriculture, Economic Research Service.
    4. N. Kaldor, 1971. "A Comment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(1), pages 45-46.
    5. John B. Penson & David A. Lins & George D. Irwin, 1971. "Flow-of-Funds Social Accounts for the Farm Sector: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(4), pages 668-670.
    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. repec:ags:nbaesp:140460 is not listed on IDEAS
    2. Li, Hongbin & Zhang, Jie & Zhang, Junsen, 2007. "Effects of longevity and dependency rates on saving and growth: Evidence from a panel of cross countries," Journal of Development Economics, Elsevier, vol. 84(1), pages 138-154, September.
    3. Brake, John R. & Melichar, Emanuel, 1977. "Agricultural Finance and Capital Markets," A Survey of Agricultural Economics Literature, Volume 1: Traditional Fields of Agricultural Economics 1940s to 1970s,, Agricultural and Applied Economics Association.
    4. Devine, James G., 2011. "The great moderation and "falling off a cliff": Neo-Kaldorian dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 78(3), pages 366-373, May.
    5. Lanier, Eleanor B., 1974. "Economics of Agriculture: Reports and Publications Issued or Sponsored by USDA's Economic Research Service, July 1971-June 1972," Miscellaneous Publications 321804, United States Department of Agriculture, Economic Research Service.
    6. Agliari, Anna & Dieci, Roberto & Gardini, Laura, 2007. "Homoclinic tangles in a Kaldor-like business cycle model," Journal of Economic Behavior & Organization, Elsevier, vol. 62(3), pages 324-347, March.
    7. Chateau, Jean-Pierre D., 1977. "Une analyse économétrique du comportement d’intermédiation financière des sociétés de crédit populaire : le cas des caisses populaires," L'Actualité Economique, Société Canadienne de Science Economique, vol. 53(3), pages 415-447, juillet.
    8. Robison, Lindon J. & Barry, Peter J. & Hopkin, John A., 1973. "Cash Flows And Financing In Texas Agriculture," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 5(1), pages 1-6, July.
    9. Leroux, Anke D. & Creedy, John, 2007. "Optimal land conversion and growth with uncertain biodiversity costs," Ecological Economics, Elsevier, vol. 61(2-3), pages 542-549, March.
    10. Aylit T. Romm & Martha Wolny, 2012. "The Impact of Later Retirement Ages on Aggregate Household Savings and Saving Rates: An Analysis of OECD Countries," Working Papers 269, Economic Research Southern Africa.
    11. Nathan Nunn & Diego Puga, 2012. "Ruggedness: The Blessing of Bad Geography in Africa," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 20-36, February.
    12. Joel E. Cohen, 2008. "Constant global population with demographic heterogeneity," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 18(14), pages 409-436.
    13. Johan Fourie, 2012. "The wealth of the Cape Colony: Measurements from probate inventories," Working Papers 268, Economic Research Southern Africa.
    14. Penson, John B. & Chen, Dean T., 1988. "Design and Application of a Structural General Equilibrium Model to Farm Policy Analysis," Staff Reports 257926, Texas A&M University, Agricultural and Food Policy Center.
    15. Judy Day & Peter Taylor, 1998. "The Role of Debt Contracts in UK Corporate Governance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 2(2), pages 171-190, June.
    16. Penson, John B. & Taylor, C. Robert, 1990. "Modeling the Interface Between Agriculture and the General Economy," Working Papers 258042, Texas A&M University, Agricultural and Food Policy Center.
    17. Stanbridge, R.J., 1973. "Sources And Uses Of Funds In The New Zealand Farm Sector," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 17(1), pages 1-16, April.
    18. Per Frankelius & Fredrik Eliasson, 2011. "Innovative and socially motivated village development in a regional context: The Grythyttan case," ERSA conference papers ersa10p1536, European Regional Science Association.
    19. Richard Schmalensee, 2012. "“On a Level with Dentists?” Reflections on the Evolution of Industrial Organization," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 41(3), pages 157-179, November.
    20. Cook, Christopher J., 1997. "On the appropriate specification of the life cycle savings rate model: The roles of sectoral shares, financial intermediation and foreign capital," International Review of Economics & Finance, Elsevier, vol. 6(2), pages 145-165.
    21. Economics, Statistics, and Cooperatives Service, 1978. "Proceedings of Workshop on Farm Sector Financial Accounts, April 14-15, 1977," Agricultural Economic Reports 307690, United States Department of Agriculture, Economic Research Service.

    More about this item

    Keywords

    Financial Economics;

    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:nbaere:140460. 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/daunlus.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.