Measuring efficiency of the Farm Credit System

The paper measures the U.S. Farm Credit System’s technical efficiency from 2000 to 2009 using a stochastic frontier production function model with quarterly unbalanced panel data. The paper's results suggest that the FCS has not efficiently utilized their inputs. On an average, the system realizes only 9.7% of their technical abilities in raising their loans, leases and investment. The efficiency of the whole system is estimated to slightly increase over time even during financial crisis period from 2007. Among the system, a significant difference in efficiency between the 5 Banks and the Associations has been found. On average, the Banks have higher technical efficiency of 62.4% compared to that of 7.7% of the associations. The efficiency of the latter increases by a small rate over time during 2004-2009 periods while efficiency of the former is more time-varying and experiences the opposite pattern. No evidence about the impact of financial crisis on the system efficiency was found.Farm Credit System, agricultural lenders, technical efficiency, financial crisis, stochastic frontier production function, financial reform, Agricultural Finance,

Dynamic Analysis of Land Prices with Flexible Risk Aversion Coefficients

Land Economics/Use, Risk and Uncertainty,

Forecasting Housing Prices: Dynamic Factor Model versus LBVAR Model

The purpose of this paper is to compare the forecasting power of DFM and LBVAR models as they are used to forecast house price growth rates for 42 metropolitan areas in the United States. The forecasting performances of these two large-scale models are compared based on the Theil U-statistic.Housing market, DFM, LBVAR, dynamic PCA, Demand and Price Analysis,

THE EFFECTS OF HOLDING NONFARM RELATED FINANCIAL ASSETS ON RISK-ADJUSTED FARM INCOME

A discrete stochastic, programming model is formulated to study the gains from diversification when farming operations are augmented with off-farm financial assets that are not highly correlated with returns from farming. We extend past research by considering the dynamics of accumulating these financial assets and the farm's leverage and tenure position. Results show that farmers' income level and stability can be improved by including nonfarm financial assets in their portfolios.Agricultural finance, Certainty equivalents, Discrete stochastic programming, Land investments, Off-farm investments, Agricultural Finance,

COMMERCIAL BANKS' RESPONSE TO COSTLY DEPOSITS IN A DEREGULATED ENVIRONMENT

The study examines balance sheet changes at Texas commercial banks following the 1980 bank deregulation. A comparison of selected deposit and asset variables for 1978 (pre-deregulation) and 1987 (post- deregulation) reveals a rapid increase in costly deposits and a decline in the proportion of loans in general, and agricultural loans in particular, relative to total bank assets. Although a weak Texas economy during this time period contributed to the observed asset reallocation, banks were also responding to the increased deposit costs and interest rate volatility following deregulation. This conclusion is consistent with previous findings cited in the study.Commercial banks, Agricultural loans, Bank deregulation, Financial Economics,

In Search of the "Bank Lending Channel": Causality Analysis for the Transmission Mechanism of U.S. Monetary Policy

The bank lending channel states that changes in monetary policy cause changes in bank loans thus causing changes in real income. This implies the Federal Reserve can influence real income by controlling the level of intermediated loans. We apply a new method to test for an operative bank lending channel in the transmission mechanism of monetary policy. Combining an error correction model with directed acyclic graphs, we explore the existence of a bank lending channel and the effectiveness of U.S. monetary policy since 1960. This paper shows when an operative bank lending channel existed, explains its impact, and evaluates other channels of monetary policy.Financial Economics,

Enterprise-level risk assessment of geographically diversified commercial farms: a copula approach

As agriculture becomes more industrialized, the role of risk measures such as value-at-risk (VaR) will become more utilized. In this case it was applied to geographical diversification and also modifying the traditional VaR estimation by incorporating a copula dependence parameter into the VaR estimation. In addition, an alternative risk measure was also calculated, CVaR. The CVaR, unlike VaR, is a coherent risk measure. Thus it does not suffer from many of the shortcomings of the VaR. The land portfolio consisted of Dryland wheat production acres in Texas, Colorado, and Montana. Three series of net returns were calculated for each region. Based on the VaR and the CVaR, the portfolio was optimized based on minimizing the expected loss based on historical net revenues. The results showed that diversification could be reduced by producing in all three areas.Copula, CVaR, Risk-Management, Geographical Diversification, Agribusiness, Farm Management, Risk and Uncertainty,

Ghana footbridge project

Over the past 4 years, SCU civil engineering senior design teams have traveled to Ghana to help build the community and improve their quality of life. When the 2011-2012 team arrived back at SCU after their Ghana visit, they made the current project team aware of a very visible problem. Every winter a makeshift bridge that connects the village of Gambibgo and the town of Bolgatanga is washed away due to heavy downpours of rain. As a result, the people of Gambibgo do not have access to the market, healthcare, and sometimes even school. On the site visit, a site survey was performed along with data collection. Upon the project team\u27s return to the United States, the project team was able to gather enough data on the site visit to complete a full design of a suspended bridge. The project team is currently still in contact with the locals and government agencies in Ghana to one day build the bridge that was designed. It is the project team\u27s hope that next year\u27s group will pick up right where was left off and oversee the construction of the bridge that was designed

FACTORS AFFECTING COMMERCIAL BANK LENDING TO AGRICULTURE

A tobit econometric procedure was used to examine the effect of selected demand and supply factors on nonreal estate agricultural lending by commercial banks in Texas. Results show that banks have reduced their agricultural loan portfolios in response to increased use of interest sensitive deposits after deregulation. Moreover, almost half of this decrease came from banks that stopped making agricultural loans. Also, results show that banks affiliated with multi-bank holding companies lend less money to agriculture relative to their assets than do independent banks.Agricultural lending, Commercial banks, Deregulation, Tobit, Agricultural Finance,

Geographical Diversification: An Application of Copula Based CVaR

Risk and Uncertainty,