Impact of Government Payments, Depreciation and Inflation on Investment Behavior in American Agriculture Sector Using Sample of Kansas Farms

A farm’s physical investment is affected by its fundamental q and by its financial situation, with the later comprising both the firm’s liquidity and its possibility of facing capital market imperfections. This study determines the effects of government payments, depreciation, and inflation on crop farm machinery and equipment investment behavior employing the Nonlinear Generalized Method of Moment (GMM) estimator to estimate the investment system. The magnitude of the lagged cash flows such as government payments, cash crop income, and grain income were largely responsible for determining farm investment behavior in the Kansas agriculture sector. An increase in lagged machinery and equipment depreciation and lagged farm motor vehicle and listed property depreciation increases total crop farm investment substantially for an average farm. Statistically, there is no evidence of inflation affects on crop farm machinery investment behavior.Investment, Liquidity, fundamental q, government payments, depreciation, inflation, Agribusiness, Agricultural Finance, Crop Production/Industries, Farm Management, Financial Economics, Livestock Production/Industries, Production Economics,

An Analysis of Efficiency of Midwestern Agricultural Cooperatives

Agribusiness,

Structural Changes in Farmer Cooperatives

Since 1990, the farmer cooperative landscape has experienced a significant structural shift. Steep consolidation, elevated competition, and surging commodity prices have elevated the need for co-ops to be mindful of their cost structure and efficiencies. To test for this structural shift, this study estimated technical, allocative, scale, economic, and overall efficiencies for a set of grain marketing and farm supply cooperatives using a unique financial database. Chow test statistics for overall efficiency model show one structural shift in 2002 and 2003. Cooperatives are more likely to reduce costs by focusing on technical efficiency rather than adjusting the scale of operation. Nearly all efficiency trend lines, except for allocative, follows the business cycle patterns of the 1990s and 2000s. Our regression results shows capital constraint was one reason an average cooperative was off the technical frontier

Risk, Profitability, and Efficiency in Agricultural Cooperatives under Allocated and Unallocated Equity

Today, more agricultural cooperatives have experienced a surge in their unallocated equity or equity held at the cooperative level as retained earnings. Key factors contributing to this rise are soaring non-member business and various tax deductions available to cooperatives. Many agricultural cooperatives directors and managers are questioning the sustainability of such a change in equity structure. The purpose of this research is to explore how this change in equity structure has impacted agricultural cooperative’s efficiency, profitability, and risk exposure. The study discovered a positive relation between averaged efficiency indices and the allocated equity to total asset ratio and the unallocated equity to total asset ratio. Higher profitability lifted the average allocated equity to total assets ratio as well as the unallocated to total assets ratio. The higher the business risk, the greater the equity cushion that the firm employs. Higher financial risk implies higher borrowing, hence a lower proportion of equity. Furthermore, larger cooperatives can afford to accept a lower level of equity than smaller firms of comparable business risk

Impact of Government Payments, Depreciation and Inflation on Investment Behavior in American Agriculture Sector Using Sample of Kansas Farms

A farm’s physical investment is affected by its fundamental q and by its financial situation, with the later comprising both the firm’s liquidity and its possibility of facing capital market imperfections. This study determines the effects of government payments, depreciation, and inflation on crop farm machinery and equipment investment behavior employing the Nonlinear Generalized Method of Moment (GMM) estimator to estimate the investment system. The magnitude of the lagged cash flows such as government payments, cash crop income, and grain income were largely responsible for determining farm investment behavior in the Kansas agriculture sector. An increase in lagged machinery and equipment depreciation and lagged farm motor vehicle and listed property depreciation increases total crop farm investment substantially for an average farm. Statistically, there is no evidence of inflation affects on crop farm machinery investment behavior

What Determines Productivity Growth of Agricultural Cooperatives?

This paper examines productivity of a sample of grain marketing and farm supply cooperatives from 1990 to 1998. The cooperative industry’s productivity or growth was mainly due to improvement in technology rather than improvement in pure efficiency or scale. The cooperative industry’s productivity was primarily associated with the grain, fertilizer, and agrochemical product lines. Policies that raise fertilizer prices would encourage a cooperative to be technically more productive. In general, policies that raise prices of grain, fertilizer, and agrochemicals would encourage a cooperative to be more productive overall

What Determines Productivity Growth of Agricultural Cooperatives?

This paper examines productivity of a sample of grain marketing and farm supply cooperatives from 1990 to 1998. The cooperative industry’s productivity or growth was mainly due to improvement in technology rather than improvement in pure efficiency or scale. The cooperative industry’s productivity was primarily associated with the grain, fertilizer, and agrochemical product lines. Policies that raise fertilizer prices would encourage a cooperative to be technically more productive. In general, policies that raise prices of grain, fertilizer, and agrochemicals would encourage a cooperative to be more productive overall.agribusiness, cooperatives, input bias, output bias, productivity, Agribusiness, Community/Rural/Urban Development, Production Economics, Productivity Analysis, D24, Q13,

MEASURING X-EFFICIENCY AND SCALE EFFICIENCY FOR A SAMPLE OF AGRICULTURAL COOPERATIVES

This paper examines the efficiency of a sample of Great Plains grain marketing and farm supply cooperatives during 1988 to 1992. In general, larger cooperatives were more X-efficient and scale efficient. Labor tended to be under-utilized and capital over-utilized. Petroleum product sales and fertilizer sales were negatively related to overall efficiency. Sales of goods other than grain, fertilizers, agricultural chemicals, petroleum products, and feed was positively related to overall efficiency. Overall efficiency was significantly correlated with the rate of return to assets