Brent A. Gloy and Eddy L. LaDue
The adoption of several basic financial management practices is examined for a group of New York dairy farms. The study provides estimates of the extent to which various business…
Abstract
The adoption of several basic financial management practices is examined for a group of New York dairy farms. The study provides estimates of the extent to which various business analysis and control, investment analysis and decision making, and capital acquisition practices have been adopted. Many practices, such as net present value analysis, are not widely adopted by farmers. The relationship between the adoption of financial management practices and farm profitability is also examined. Results suggest that the adoption of financial management practices, such as using investment analysis techniques, significantly impacts farm financial performance.
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Brent A. Gloy, Eddy L. LaDue and Michael A. Gunderson
Agricultural credit risk migration is examined using loan records gathered from four agricultural lenders. Results indicate that lender risk ratings are much more stable than…
Abstract
Agricultural credit risk migration is examined using loan records gathered from four agricultural lenders. Results indicate that lender risk ratings are much more stable than ratings based on credit scores estimated from financial statements, highlighting the importance played by nonfinancial factors such as management capacity, character, and collateral in assessing credit risk. Additionally, the borrower’s risk tier, personal characteristics, and the stage of the business life cycle provide useful information in predicting credit quality downgrades, while the primary agricultural enterprise does not impact the likelihood of a downgrade.
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Michael A. Gunderson, Brent A. Gloy and Eddy L. LaDue
Using empirical default probabilities and profitability distributions, a simulation model is developed to identify the long‐term value of relationships among differing credit…
Abstract
Using empirical default probabilities and profitability distributions, a simulation model is developed to identify the long‐term value of relationships among differing credit rating and loan amount groups. According to the results generated from a set of lending relationships, agricultural lenders are pricing low and moderate credit rating customers such that similar long‐term values are found among the groups. Also, large loan amount relationships generate more dollars of lifetime value. The large relationships, however, earn fewer dollars of lifetime value per dollar of loan amount among risk peers. Implications are also drawn for the retention rates of existing customers.
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Markowitz’s mean‐variance approach is used to identify the returns to vertical investment in the pork industry. In addition to previous efforts, this paper considers not only…
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Markowitz’s mean‐variance approach is used to identify the returns to vertical investment in the pork industry. In addition to previous efforts, this paper considers not only returns to stock ownership, but uses operating return on investment in pork slaughter and hog production to evaluate the impacts of vertical investment within the industry segment. Results suggest there are indeed diversification incentives for vertical investment in the pork industry. However, results do differ for vertical direct investment versus investment through stock ownership.
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This paper aims to provide a “biography” of sorts on Agricultural Finance Review. The paper tracks the evolution of Agricultural Finance Review from its introduction in 1938 to…
Abstract
Purpose
This paper aims to provide a “biography” of sorts on Agricultural Finance Review. The paper tracks the evolution of Agricultural Finance Review from its introduction in 1938 to its current status.
Design/methodology/approach
The paper is based on a complete review of every paper and every issue. Not all papers were read by the author, but key papers of interest that in one way or another made significant contributions to the study of agricultural finance were reviewed.
Findings
The paper shows the evolution of agricultural finance from the early days of reporting financial data in the 1930s and 1940s, to its emergence as a major and significant sub discipline of the general field of agricultural economics.
Research limitations/implications
As indicated, not all papers were fully reviewed or read. It is possible that papers identified as “firsts” may have been preceded by other papers. Nonetheless the paper identifies the basic evolutionary path of the journal and defines key points in time when a paradigm shift emerged to change the direction of this discipline.
Practical implications
As Agricultural Finance Review transitions from the Department of Applied Economics and Management at Cornell University to Emerald Group Publishing Limited, this “biography” provides readers with a general overview of the journal's and the discipline's historical development.
Originality/value
This paper is simply a review of the existing literature found in Agricultural Finance Review.