Prediction of Loan Deficiency Payments (original) (raw)

Estimating Principal Outstanding Models for Farm Service Agency Guaranteed Loans

2001

Financial, farm economy and bank factors are hypothesized to explain variation in FSA guaranteed loan principal outstanding. Regression models using state-level data (1990-1998) are estimated. Debt-to-asset ratios, percentage of agricultural revenues due to crops, interest rates, and off-farm income are significant variables for both farm ownership and operating loan principal.

Analysis of Commodity Program Adjustments for U.S. Rice in Stochastic Framework

2012

Potential adjustments in U.S. commodity program for rice are evaluated in this paper using stochastic analysis in a global modeling framework. Corresponding threshold and loss-compensatory increases in target price and loan rates are determined with assumed outright and gradual elimination of direct payments. Results show that if direct payments (DP) are eliminated in 2012, a 23% increase in both the target price (TP) and loan rate (LR) triggers counter-cyclical payments (CCP) 80% of the time; and it will take an increase of 48% in TP and LR to generate CCP enough to compensate for the loss in total DP. If DP is gradually removed over 5 years, the trigger and compensatory increases in TP and LR are 41% and 46%, respectively. Furthermore, if DP is eliminated outright and TP maintained, an increase of 71% in LR triggers loan deficiency payments (LDP) 75% of the time; and it will take an increase of 130% in LR to generate enough LDP to recoup the total loss in DP. Under gradual removal...

Anticipatory Signals of Changes in Corn Demand

2015

This paper analyzes changes in the expected demand for corn in the U.S., and it explores whether anticipatory signals of price jumps can be obtained from simple models. Two main objectives are considered. One is to estimate the relationship between the expected supply of corn and corresponding prices of futures contracts. We argue that such results can provide estimates of demand relationships and their shifts with the passage of time. Moreover, such analysis should allow us to test for possible changes in the structure of demand. A second, related objective is to demonstrate how such historical estimates can allow an analyst to appraise the futures markets' quotes relative to forecasts from the historical model. We argue that the difference in the two prices may contain useful information.

Farmers' Crop Acreage Decisions in the Presence of Credit Constraints: Do Decoupled Payments Matter?

2008

While in theory decoupled payments do not distort production decisions, in practice there are several potential coupling mechanisms for these payments. We use farm-level data from Kansas to revisit the issue of how (de)coupled are these supposedly "decoupled" payments by focusing on how they may impact production through credit constraints. In particular, we study how production effects may have differed across farmers with varying levels of debt pressure. Our empirical approach exploits the fact that we can observe the same farm over time (and so can account for the effects of time-constant omitted variables) to study how these payments affected total crop acres, owned acres, and the decisions to plant corn, sorghum, soybeans and wheat. Like previous studies, we find small production effects. Nonetheless our results suggest decoupled payments have potentially distortionary effects on production.