NC_old1177: Agricultural and Rural Finance Markets in Transition

(Multistate Research Project)

Status: Active

NC_old1177: Agricultural and Rural Finance Markets in Transition

Duration: 10/01/2019 to 09/30/2024

Administrative Advisor(s):

NIFA Reps:

Non-Technical Summary

Statement of Issues and Justification

The presence of internal and extental shocks to U.S. agricultural markets generate the impetus for new agricultural finance research on the response of U.S. agriculture to farm financial stress. The agricultural commodity price boom of 2007-2013 generated substantial increases in farm income, farm asset prices, and farm (and farmland owner) wealth. Recent commodity price declines due to a glut of global production, the prospect of increased tariffs on agricultural commodities, considerable agricultural and macroeconomic policy uncertainty, and the similarity of other economic indicators to those in the 1980s, lead many to wonder if U.S. agriculture is on the brink of another 1980s-type agricultural bust. In the 1980s, farm asset prices and farm wealth declined forcing many farmers into bankruptcy and exit with negative consequences for rural economies.

Since early 2013, prices for corn, soybeans, and wheat have declined by approximately 50%. Livestock and dairy prices have seen similar declines. Concurrent to these sector-wide output price decreases, agricultural real estate value have declined despite low interest rates and continueddemand for farmland, land values in many agricultural states across the U.S. have seen at least three years of continued decline. While large profits and low interest rates during the boom encouraged farmers to use debt to invest in capital assets such as equipment and farmland, interest rates are rising which threatens to put additional negative pressure on farm asset prices and makes farmers particularly vulnerable to financial shocks. Trade disputes with key trading partners such as China, Mexico and Canada also created uncertainty and negative shocks to the farm income that could worsen agricultural credit conditions. 

U.S. agricultural production is critically and increasingly dependent on cost-effective access to capital and prudent regulation of the financial system to continue to meet the food, fiber, and bio-energy demands of the U.S. and the world. Production agriculture is part of a diverse and complex economic and financial system that is subject to systemic risks of the type seen during the 2008 financial crisis. While agriculture was not greatly harmed during this financial crisis, in part because commodity prices were high, it remains vulnerable to shocks to the availability and price of credit. These shocks can spillover from other sectors as was the case with the housing sector in 2008. There are important lessons to be learned about the role of systemic risk that are important to both Wall Street capital providers and Main Street agricultural users of capital in rural America. In addition, increasing farm financial stress is testing the tighter agricultural credit regulations and more prudent agricultural lending practices, in part adopted after the 1980s farm crisis.

The availability and use of credit by farmers, rural businesses, and agribusinesses has a critical impact on their long-term sustainability and competitiveness. One aspect of credit use is determining when and how much credit the business should use and when credit use should adjust to changing economic conditions. At the heart of this issue is determining the extent to which the firm should use its credit reserves or unused borrowing capacity. Borrowing capacity has a value to the firm because it can be called upon in times of financial distress and keeps options for future investment. Determining the value of unused credit capacity, however, is a challenge complicated by the fact that unused borrowing capacity tends to grow and shrink as the overall market conditions in agriculture fluctuate. When times are bad, unused credit reserves tend to shrink as lenders become more conservative. These unused credit reserves are typically larger for established farmers but many of these farmers are nearing retirement and may not want to take on additional debt. Young and beginning farmers, which are often small or have less than $250,000 in gross farm sales, are now in a position to move back to the farm or start a new or another career in production agriculture. While some of the wealth will be transferred from the older to the younger generation of farmers, many young farmers will need access to credit to start or grow their operations. Work is needed to determine how to value and manage credit reserves in agriculture as well the implications of a new generation of borrowers entering agriculture. This issue and its distributional implications are particularly salient now since young and beginning farmers are more likely to experience greater income shocks and financial stress due to the ongoing trade disputes.

The increased regulatory environment is also playing a role in reshaping rural financial markets. In response to the 2008 financial crisis, the U.S. Congress enacted sweeping financial regulations. These financial regulations on rural credit institutions have had major impacts to oversight and bank lending. Since these regulations were passed, mergers and acquisitions within the rural credit markets have increased. This has the direct effect on reducing the choices available to farmers and agribusiness for credit and reducing competition. These trends have major long-term impacts on credit availability and how rural financial markets are structured.

Firms in the food and agribusiness sector are experiencing continued financial risk in their operations as input and output prices have been highly volatile in recent years, a risk that is likely to continue for the foreseeable future. Rising food prices worldwide resulting from poor crop production years have reinforced the need to develop informed policies to promote economic development and expansion of agricultural markets in the developing world. Broadening and deepening financial markets in rural areas is one effective way to promote strong emerging markets as recent microfinance and rural finance initiatives have demonstrated. Agricultural economists have lagged in their contribution to the knowledge of the programs that bring about strong financial development in rural areas of developing countries, but recently this area has been more active among agricultural economics research. More work is needed, however, to further develop our understanding about the nature of risk in emerging markets.

The members of NC-1177 play a critical role in educating future and current agricultural financial managers through teaching and extension. These efforts provide the industry with the knowledge necessary to manage financial aspects of farms and agribusinesses. However, work is needed to jointly develop an understanding of the key components of a state-of-the art financial management curriculum for undergraduate, graduate, and extension audiences. This project will seek to identify key concepts and lessons that should be incorporated into each of these curricula. By improving the training of undergraduates, graduates, and practitioners the project will improve the financial management ability of members of the food system and increase the long-term sustainability of businesses operating in the food, fiber, and bio-energy system.

The track record of NC-1177 was excellent regarding the number of collaborations and outcomes that depended upon multistate efforts. This current project will leverage those existing relationships. Each objective of the new project specifically states how multi-state activity will occur and why it is needed. The scientists involved in the project have a wide variety of expertise in agricultural finance and policy analysis. However, most institutions have only one scientist working in this area. Thus, a regional emphasis fosters synergy as resident experts can establish a critical mass necessary to attract national interest and leaders of regulatory agencies, financial institutions, and policy groups; more efficiently collect data of mutual interest; enhance peer review of each work produced; and collaborate on issues that exceed local interest. Extension members of the committee benefit from research that is not available locally. The past multi-state effort benefitted greatly from the rich participation of industry, public agency, and non-profit members.

This group has a strong history of leveraging the multistate funds to acquire numerous national and state level grants. For example, in 2013 members of NC-1177 from Kansas State, North Dakota State, University of Illinois, University of Minnesota, and University of Kentucky collaborated on a national farm benchmarking grant with just under a million in funds received. NC-1177 members have also leveraged multistate funds by working with industry. Researchers at Kansas State have received funds from CoBank to understand the outlook for farm supply cooperatives. Researchers at North Dakota State University have received funds from four Farm Credit Associations to develop and aid with lender training. Members will continue to collaborate and pursue grant opportunities from USDA, state agencies, and private industry to maximize benefit of multistate funds.

The primary activity of this regional research group is the annual meeting held each year in conjunction with the National Agricultural Credit Committee meeting. The meeting is hosted by the Federal Reserve Bank of Kansas City. The meetings represent an excellent opportunity to bring together members of academia, industry, and government to discuss important and current issues in agricultural finance. The academic call for papers for these meetings will ask participants to explicitly address the objectives of this project in their presentations. In addition, industry and government participants will address project objectives from an ‘real world’ perspective. The objectives will be evaluated based on the relevance and quality of research projects presented and discussion among academic and industry participants. Further, many research projects are expected to be published in peer-reviewed academic journals and the number of such publications is a quantitative measure of the impact of the research generated. Other work will result in extension publications and outputs targeted toward business and policy audiences. The number and geographic reach of these outputs is another measure the project’s impact. 

In addition to the fall Annual Meeting, many of our members are part of the Agricultural Finance and Management (AFM) section of the Agricultural and Applied Economics Association (AAEA). This group meets annually during the summer AAEA meetings and hosts track sessions in the area of agricultural finance. Leadership of the AFM section is the same as the NC-1177 leadership. Activities sponsored by the AFM section foster collaboration among agricultural finance scholars throughout the U.S. and abroad and generate additional research presentations and publications related to the objectives of this project.

Upon completion of the project, insights will be gained to ultimately improve the functioning of agricultural and rural financial markets. Producers, rural residents, and businesses should benefit through increased performance and reduced business risk. The lending sector will become more stable and better prepared to face future policy, portfolio and structure-related challenges. The value of this work to stakeholders is evidenced by the large number of non-station members who actively participate in annual meetings and desire to keep abreast of research results via listserve communication. There are no apparent barriers hindering the technical feasibility of the proposed research project.

Related, Current and Previous Work

The project is a renewal of NC-1177 ending in 2019 which was a replacement for NC-1014, NC-221 and NCT-194. The membership is largely drawn from the continuing membership of NC-1177 and members of the Agricultural and Applied Economics Association Agricultural Finance and Management section. The project actively engages participants from government agencies and industry through our partnership with the National Agricultural Credit Committee to jointly hold our annual meeting. This partnership is mutually beneficial in that we are able to engage with the National Agricultural Credit Committee in joint sessions and learn what issues they are working on and dealing with in industry to shape our work and research, and we are able to share our knowledge and research on topics of interest to them back to them. There are currently no other active regional projects that deal with the financing of agriculture and rural America.

The NC-1177 membership works closely with the Agricultural and Applied Economics Association (AAEA) Agricultural Finance and Management (AFM) section. AFM is the only section in AAEA that has a dedicated external peer-reviewed journal, Agricultural Finance Review, associated with it. From 2014 to date, there have been over 78,500 article downloads. In 2017, the NC-1177 executive team, served as guest editors for a special issue in Agricultural Finance Review entitled "Commemorating 100 years of agricultural credit". This special issue has had over 2,000 downloads in the last 12 months. The work our participants are doing in this area is heavily cited with the top publications citing articles in the Agricultural Finance Review, American Journal of Agricultural Economics, China Agricultural Economic Review, Agricultural Economics, and Applied Economic Perspectives and Policy.

Several sites are available where participants regularly share materials designed for lay audiences. These include Kansas State University's, University of Illinois farmdoc daily, Purdue University's Center for Commerical Agriculture and Center for Food and Agribusiness, Iowa State University's Ag Decision Maker, and The Ohio State University's Farm Income Enhancement Program. 

NC-1177 had four objectives for the last five years:

1. Examine the impact of recent fluctuations in capital and commodity markets on the performance, management, and regulation of agricultural financial institutions

2. Evaluate the management strategies, capital needs, and policy impacting the financial performance and long-term sustainability of firms in the food and agribusiness sector

3. Identify financial institutions and services that benefit agricultural producers and rural communities and expand agricultural markets, especially those producers that are beginning, young, from socially disadvantaged groups, and/or involved in producing specialty crops

4. Investigate capital structure, financial performance, and investment strategies of firms producing renewable energy in context of long term climate change. Implications of these findings for agriculture and rural communities will be delineated

The previous project produced a great deal of knowledge regarding the stated objectives related to financing agriculture and rural America. Project members addressed the objectives through a variety of collaborations. Much of the research addressed individual objectives. The literature cited section includes a brief summary of the research published just in the last 12 months of the NC-1177 project. The participants in this project have also sought and secured additional funding of research.

The previous work includes examining the financial strength and performance of agricultural lenders. The efficient performance of commerical banks, the associations of the farm credit system, and federal government loan program continue to be of interest to the NC-1177 participants. One focus has been on better understanding the agricultural lending relationships to provide lenders with greater detail on the default risk of borrowers, loss when default occurs, and general profitability of agricultural lending relationships. During the prior five years, many lenders faced defaults infrequently which has made the assignment of default probabilities and incidences difficult.  Given recent market fluctuations, it is important to consider the impact of capital and commodity market volatility on the performance, management and regulation of agricultural financial institutions. Researchers at The Ohio State University, Kansas State University, Purdue University, and University of Georgia have all been analyzing these topics.

Land values continue to be an important topic and NC-1177 participants and researchers from USDA, the Federal Reserve, Kansas State University, Iowa State University, University of Illinois and Purdue University have been studying the impact of changes in land values on the financial health of rural economies, commercial banks, and Farm Credit Associations.

Members of NC-1177 have a long history of investigating the borrowing and financial behavior of agricultural producers and agribusinesses. Researchers have considered the access and use of agricutural credit important for a healthy rural economy. Thus, understanding a producer's use of credit is important when evaluating the success of government sponsored lending programs and the competitiveness of the rural credit market. Researchers from The Ohio State University have been examining the financial stress and performance of beginning farmers specifically during times of economic downturns. They have also looked at finanical stress and farm bankrupticies. Researchers at Kansas State University, University of Kentucky, University of Illinois, University of Minnesota, and North Dakota State University either have existing or have been developing farm level databases. This farm level data are being used to develop state and national benchmarks used by researchers, lenders, and farmers. Kansas State University has been using this data to show how liquidity, or lack there of, impacts farm level efficiency. 


  1. Examine the impact of relationships between recent fluctuations in capital and commodity markets and the performance, management, and regulation of agricultural financial institutions.
  2. Evaluate the management strategies, capital needs, and policies impacting the financial performance and long-term sustainability of firms in the food and agribusiness sector.
  3. Identify and analyze financial institutions and services that benefit agricultural producers and rural communities and expand agricultural markets, especially those producers that are beginning, young, and from socially disadvantaged groups.
  4. Evaluate farmland and commodity markets and government policies that affect producers and the risk management and financial strategies producers use to mitigate risks and enhance profitability and sustainability of the agricultural sector.


The primary concern of the agricultural finance community during the last proposal was whether the agricultural sector would continue to experience high growth, income levels, and healthy credit markets relative to the broader economy. Previous research of this regional group suggested that the financial health of the agricultural sector should be closely monitored as the risk of a decline in agricultural incomes and asset values appeared likely. While the agricultural sector appears decoupled from the broader economy, declining commodity prices and increasing costs of borrowing were predicted to be a concern for a significant decline in farm financial conditions.

The theoretical basis used to frame the research outputs of this regional research group are drawn from the theory of finance and credit markets. According to the simplest model of asset valuation, the present value model, the value of an asset is determined by the discounted stream of expected future returns. As a result, the major areas of concern for agricultural finance are (i) expected farm income, (ii) interest rates (the discount factor), and (iii) asset values. These three components continue to comprise the tenants of agricultural finance research and are the primary topics of inquiry for this regional research group. These theories are applied to the research objectives of this group and are explained below.

Objective 1: Examine the impact of relationships between recent fluctuations in capital and commodity markets and the performance, management, and regulation of agricultural financial institutions.

The recent downturn in commodity prices following the highs seen in 2012 and 2013 has resulted in a watchful eye on U.S. credit markets and farmland values. Many believe that changes in US farm and energy policies have led to increased volatility in commodity markets and we are starting to see some decline or at least leveling off from record farmland values. These changes may have contributed to an increase in systematic risk in the agricultural sector. Because systematic risk is inherent to the broader financial system, it cannot be diversified away and poses a serious threat to the long run success of firms. While the agricultural sector, in particular agricultural financial institutions, remained somewhat insulated from the catastrophic effects of increased systematic risk, it would be naive to say that the sector is completely immune to the short- and long-run effects of this increase in systematic risk or the increase in volatility of capital and commodity markets. Research of the widespread effects of the capital and commodity market fluctuations on the performance, management, and regulation of agricultural financial institutions is the focus of this objective. 

Most of the issues outlined above are national in nature but fully understanding and analyzing the implications of this objective requires an analysis at a regional level. Agricultural financial institutions are just as diverse as their agricultural borrowers and as agricultural borrowers’ demographics and production changes, so does the different types of risk an agricultural financial institutions faces. For example, Midwest states are dominated by grain farmers that have seen agricultural land values reach well above $10,000/acre. While this makes balance sheets strong for these farmers, it creates additional financial risk for agricultural financial institutions or agricultural banks. If land values were to fall, similar to what we have seen in the U.S. housing market and the 1980s farm bust, many agricultural banks may find themselves with under collateralized loans and an inability to loan additional funds. Agricultural bankers in the South have seen an increase in land values as well but this increase is dwarfed by the run-up in land values experienced in the Midwest. Thus, the inherent risks are different for agricultural banks across the U.S. due to differences in land values, as well as difference in agricultural production. In addition to differences created by the type of agricultural production that dominates their region, the size, scale, and commitment to agricultural lending varies considerably across the country. For example, the Northeast is characterized by relatively large banks while the Midwest has a larger number of smaller community banks focused on agricultural lending.

NC-1177 and its members have a long history of working through these types of problems faced by agricultural financial institutions. For example, the University of Illinois, Purdue University, and Cornell University were leaders in researching the implications of the 1980s farm crisis and its subsequent effects on U.S. agriculture at a national and regional level. This was accomplished by pooling of state-level data and different experts at universities across the U.S. bringing their regional expertise to analyzing this pooled data. Many of these previous experts as well as new experts in the proposed renewal of NC-1177 will continue to pool data (such as income and call reports for banks) and conduct collective analyses to address the increase in systemic risk for agricultural financial institutions.

Another unique aspect of addressing this systemic risk in U.S. agriculture will be the continued work with the Federal Reserve Bank of Kansas City, hereafter the Bank. The Bank has been and will be actively involved in supporting NC-1177’s research efforts. The Bank has produced many outputs in their Mainstreet Economist, the Economic Review, and other academic outlets addressing many past and future issues facing U.S. agriculture. The Bank provides additional access to agricultural bankers and their Survey of Agricultural Credit Conditions. Access to this data will provide information on the loan availability, loan demand, and the overall health of agricultural banks and agricultural producers. Coupling this data with other state level data and bringing experts from the Bank and other universities together on research of these pooled data will create a national and multi-state level analysis that will benefit all agricultural banks. And, will provide policy makers and state-level bankers associations sound evidence of how to best address the impacts of the financial crisis on agriculture.

Agricultural banks are but one type of agricultural financial institution. Other key agricultural financial institutions are government sponsored enterprises (GSEs), like the Farm Credit System and Farmer Mac. A series of studies will be conducted to address the implications of fluctuations in capital and commodity markets on these GSE agricultural firms. Efforts will focus on examining how changes in government policy toward GSE’s would impact the supply and price of capital in agricultural markets. The collapse and reorganization of other prominent GSE’s, Fannie Mae and Freddie Mac, has called into question the role of GSEs in modern capital markets. Work is needed to understand how changes in the GSE status of these lenders would impact capital availability in agricultural markets. Research will be conducted to determine how GSE status influences the cost of funds for Farmer Mac and the Farm Credit System and how alternative structuring of these institutions might be best accomplished so as not to disrupt the agricultural credit markets.

The financial characteristics of agricultural producers vary across the U.S. Each type of producer has a different set of business and financial risks, which impact those that lend them money. For example, dairy operations located in New York have different credit needs than a corn-soybean producer in Illinois. While these differences in credit needs as well as credit reserves exist, synthesizing what is being asked of all producers in terms of loan documentation will lead to better and more sound financial management educational programs. In addition, information on failures and successes of agricultural financial institutions will be collected that will benefit not only specific states and regions but the nation as a whole. Researchers from Illinois, Kansas, North Dakota, Minnesota, and Kentucky will collaborate on this objective.

Objective 2: Evaluate the management strategies, capital needs, and policies impacting the financial performance and long-term sustainability of firms in the food and agribusiness sector.

Efforts in this objective will be directed toward issues related to capital supply and demand in agriculture, financial management of agricultural businesses, and the impacts of public policy on capital availability and its use in the agricultural system. One key to successfully addressing this objective is to utilize a variety of state and national level data sets designed to understand the financial situation of farms. Many of the researchers involved in the project lead or assist with farm level data collection efforts in their respective states. These data sets will be analyzed in a coordinated manner to shed light on how capital needs vary across states and regions and how national level policies will impact the financial performance on firms in the sector. Additionally, the project has a long history of collaborating with researchers from the USDA’s Economic Research Service. Several of the researchers have developed collaborative working relationships with ERS to analyze ERS’s Agricultural Resource Management Survey (ARMS). This data set contains arguably the most definitive data on the financial structure and characteristics of the farm sector. In completing this objective researchers will continue to collaborate with and involve ERS scientists in the project. This will greatly expand the scope of the work that is done and will also greatly benefit the analysis by bringing together many of the top agricultural researchers to work on analyzing the data. The data will be analyzed with well-known and accepted econometric and optimization procedures.

In addition, to making the best use of data already collected in the individual states and at the national level by ERS, the project participants will also augment existing data collection efforts to explicitly analyze issues related to understanding how management strategies, capital needs, and policy impact financial performance. This additional data collection effort will benefit greatly from multi-state coordination which will insure that data is consistently collected and that the results can shed light on issues that transcend state boundaries.

The problems identified in this objective are all national in nature. In developing a sound federal policy, it is critical that regional perspectives inform the analysis. For instance, the banking and agricultural credit sectors differ considerably amongst the regions of the US. The work on financial education must also consider the full extent of financial management knowledge and programming currently underway throughout the country. While almost every state has operators whom produce a diverse set of agriculture outputs, the type of farming operations tend to be concentrated regionally. For example, corn and soybean production tends to be concentrated in the Midwest and dairy production in the Western states, the Northeast, and Midwest.

As a result, educators in these regions have developed outstanding financial management education programs for these types of operations. By combining and summarizing the knowledge developed in these regions across the country, producers of these commodities in non-traditional production regions can benefit from the work developed in more traditional production regions. In short, by summarizing and building upon this knowledge a coherent and useful financial management research and education program can be developed to achieve the greatest benefit to agricultural producers in all regions of the country.

In addition, the 2018 Farm Bill is in the process of being signed during the writing of this current project. The member of this project have a long history of studying many important facets of farm policy, Federal crop insurance and related programs. Researchers from Illinois, Kansas, North Dakota, New York, Minnesota, Texas, and Louisiana will collaborate on this objective.

Objective 3: Identify and analyze financial institutions and services that benefit agricultural producers and rural communities and expand agricultural markets, especially those producers that are beginning, young, and from socially disadvantaged groups.

The credit available to agricultural communities and especially young, beginning, and small (YBS) producers or socially disadvantaged producers is an important focus area given the continued increase in average age of farmers. Thus, YBS or socially disadvantaged producers will benefit from additional efforts to ensure adequate credit. These farm groups can play a vital role in maintaining and growing rural communities in the U.S. Ensuring that YBS farmers as well as socially disadvantaged farmers receive credit is one of the missions of the Farm Service Agency within the U.S. Department of Agriculture. In addition, the Farm Credit System is charged with providing credit to YBS farmers. The NC-1177 group has strong ties to these two government agencies and sharing data between these groups has improved lending and financial service practices to YBS farmers, socially disadvantaged, and/or specialty crop producers in the past. An example of this is the research completed by Oklahoma State University, Purdue University, and the Farm Credit Administration (regulator of the Farm Credit System) on the importance of credit to YBS farmers that operate nonfarm businesses.

NC-1177 participants will work with these government agencies by pooling data and other resources to ensure these special interest farm groups receive credit and financial services necessary to navigate the potentially turbulent times ahead. Many NC-1177 participants have experience with the ARMS data set. Since the agricultural sector is global, international regulatory and financial issues affect YBS and socially disadvantaged producers as much as domestic ones and must be considered to understand the viability of these at risk producers. In effect, expanding agricultural markets must consider the implications of the recent global economic recession and slow recovery. Agricultural export markets are important to the financial health of U.S. agricultural producers and these export markets will undoubtedly be impacted by new rules of international finance.

Producers will need to quickly understand the potential ramifications of changing the rules of international finance on their farm business. Delivering this information to farmers should help them compete in a global economy. However, obtaining, analyzing, and delivering this information is a large and substantial task. Most universities have few faculty that specialize in agricultural finance and/or international trade. In addition, agricultural production varies across geographic regions and this variation in crop and livestock production may be impacted differently by these new international finance rules. Therefore, an effort to pool resources is needed to address the timely issue of international finance. Pooling of resources will be accomplished through a multi-state effort. Cornell University and Auburn University have faculty members that are experts in the area of international agricultural finance. In addition, the Agricultural Finance Review has shown a recent commitment to publishing work in the area of international agricultural finance. Researchers from Illinois, Kansas, Auburn, Cornell, Ohio, Iowa State, and Kentucky will collaborate on this objective.

Objective 4: Evaluate farmland and commodity markets and government policies that affect producers and the risk management and financial strategies producers use to mitigate risks and enhance profitability and sustainability of the agricultural sector.

At the time of this proposal, the 2018 Farm Bill is expected to soon clear the President’s desk. Producers, lenders, academics, and agribusinesses will need to understand the changes being implemented and how this will impact their respective business. Faculty members in Kansas, Illinois, Indiana, Iowa, North Dakota, and New York will all work to provide timely and applicable information regarding how these policies as well as others affect producers and the risk management and financing strategies they choose.

Measurement of Progress and Results


  • Dedicated section (Agricultural Finance and Management) at Agricultural and Applied Economics Association annual conferences
  • Refereed journal articles
  • Multi-state research bulletins
  • Extension publications (e.g., fact sheets, bulletin updates, etc.
  • Popular press articles
  • Papers presented at professional conferences
  • Extension presentations delivering research findings and educational material
  • The organization of special conference sessions at professional meetings
  • Postings on Outreach Websites

Outcomes or Projected Impacts

  • A strengthened network of scholars, industry participants, and economists capable of examining finanical market policies affecting rural areas. Participants will discern local impacts of transition and change in financial markets. Impacts will likely differ across regions.
  • A standardized set of accepted, investigative methodologies and assessment tools for analyzing the social, economic, and fiscal impact of global financial markets and exchanges on rural financial markets.
  • Publications and educational materials for public and private policymakers, financial industry and agribusiness leaders, adn farmers and rural citizens that will help them understand and navigate during times of global financial stress and what it means for themselves and their associated business and rural communities.


(2019):Organizational meeting and communications with members to identify and prioritize the topics to be addressed under each objective. Development of detailed literature reviews for each objective. Development of current data inventory and data needs for the project. Report summaries from each objective and interim data development reports and analyses.

(2020):Descriptive summaries and analysis of preliminary data collected.

(2021):Development of results and bulletins from the data analysis. Development of symposium at professional meetings and completion of edited volume of results of initial analyses. Development of refereed publications and dissemination to lay audiences. Identification of additional priorities for each objective for further analysis.

(2022):Final development and implementation of community of practice for Initial analyses of priority projects identified in 2019.

(2023):Development of final reports and summarization of key findings. Updates to Research dissemination through refereed journal articles and to lay audiences.

Projected Participation

View Appendix E: Participation

Outreach Plan

The need for NC-1177 stems from the collaboration among researchers and educators across institutions as well as with government and industry leaders. Previous NC-1177 projects have highlighted that the collective research undertaken through this project places a premium on communicating and disseminating research results to academic professionals, policymakers, farmers, financial institution managers, agribusiness managers, and leaders in local communities. In addition to the usual channels through extension and professional publications, NC-1177 is connected to government and industry leaders, which will provide an immediate transfer of knowledge beyond normal academic outlets. Since 2013, the annual NC-1177 meeting has been coordinated with the National Agricultural Credit Committee and held at a Federal Reserve Bank Branch each year. The meeting is themed based off of what is currently going on in the economy and split between joint sessions with the National Agricultural Credit Committee and research presentations by NC-1177 members.

In addition, we encourage overlap of our members with the Agricultural Finance and Management (AFM) section of the Agricultural and Applied Economics Association (AAEA). Track sessions will be organized for the AAEA meetings each year. Project annual reports, symposia programsa nd related materials will be provided to the public via the NC-1177 website along with summaries of research results.


The recommended Standard Governance for multistate research activities include the election of a Chair, a Chair-elect, and a Secretary. All officers are to be elected for at least two-year terms to provide continuity. Administrative guidance will be provided by an assigned Administrative Advisor and a NIFA Representative.

The officers will coincide with the officers elected to serve in the Agricultural Finance and Management (AFM) Section of AAEA. This will allow for consistency and the minimum two-year term to provide continuity. The close relationship between NC-1177 and AFM will ensure that the group is meeting at least twice per calendar year and allow for ease of synthesizing project work and results.

Literature Cited

This list of literature represents an example of what our participants have published in the last year of the previous NC-1177 project.

Bruce Ahrendsen

Dodson, Charles and Bruce Ahrendsen. Characteristics of borrowers likely to benefit from loan modifications. 2018

Dodson, Charles and Bruce Ahrendsen. Farm and lender structural change: implications for federal credit. 2017

Ahrendsen, Bruce. Agricultural Trade Policy: ‘America First’?. 2017

Maria Bampasidou

Moss, C.B., J.D. Kropp, M. Bampasidou. The financial economics of agriculture and farm management. The Routledge Handbook of Agricultural Economics, 689-712. 2018

Osti, S., M. Bampasidou, J.M. Fannin. Revisiting Farm efficiency of Rice-Crawfish farmers: Accounting for the H-2A program. 2018

Mishra, A.K., M. Harris, M. Bampasidou. Health Insurance Coverage and Labor Allocation of Beginning Farm Operator Households. 2018

Moss, C.B., M. Bampasidou, J.D. Kropp, A.K. Mishra. Modeling Debt Choice in Agriculture: Mixture Models of Operating Margins. 2018

Bampasidou, M., A.K. Mishra, C.B. Moss. Modeling debt choice in agriculture: the effect of endogenous asset values. Agricultural Finance Review 77(1),95-110. 2017

Eric Belasco

Belasco, E. Is Organic Farming Risky? Overcoming Crop Insurance Barriers to Expanding Organic Food Production and Markets. 2018

Bekkerman, A., E.J. Belasco, V.H. Smith. Does Size Matter? Distribution of Crop Insurance Subsidies and Government Program Payments across US Farms. Applied Economic Perspectives and Policy. 2018

Brady Brewer

Li, X., B.E. Brewer, C.L. Escalante. Pre-recession efficiencies and input allocation decisions of agricultural and critically insolvent banks. Applied Economics. 2018

Brewer, B.E., A.M. Featherstone. Agency cost of debt: evidence from Kansas farm operations. Agricultural Finance Review. 2017

Rusiana, H., B.E. Brewer, C.L. Escalante. Effects of business maturity, experience, and size on farms economic vitality: A credit migration analysis of Farm Service Agency borrowers. Agricultural Finance Review. 20147

Brian Briggeman

Russell, L.A., B.C. Briggeman. A.M. Featherstone. Financial leverage and agency costs in agricultural cooperatives. Agricultural Finance Review. 2017

Briggeman, B.C., C. Mickelsen, K. Pokharel. Equity Composition of Kansas Grain, Oilseed and Farm Supply Cooperatives. 2017

Mashange, G., A.M. Featherstone, B.C. Briggeman, C. Wilson, J. Janzen. Credit Risk Migration Analysis of Cooperatives. 2018

Allen Featherstone

Taylor, M.R., A.M. Featherstone. The value of social capital in farmland leasing relationships. 2018

Featherstone, A.M. The Farm Economy: Future Research and Education Priorities. 2018

Parman, B.J., A.M. Featherstone, B. Coffey. Estimating product-specific and multiproduct economies of scale with data envelopment analysis. 2017

Featherstone, A.M., M.R. Taylor, H. Gibson. Forecasting Kansas land values using net farm income. 2017

Zereyesus, Y.A., A.M. Featherstone. Empirical analysis of profit maximization and cost minimization behavior of Kansas farms. 2017

Michael Gunderson

Lai, J., N.J. Olynk Widmar, M.A. Gunderson, D.A. Widmar, D. Ortega. Prioritization of farm success factors by commercial farm managers. 2018

Johnson, A.M., M. Boehlje, M.A. Gunderson. Agricultural credit risk and the macroeconomy: Determinants of Farm Credit Mid-America PD migrations. 2017

Joleen Hadrich

Hadrich, J.C., C.A. Wolf, K.K. Johnson. Characterizing U.S. dairy farm income and wealth distributions. 2017

Valentina Hartarska

Quaye, F.M., D. Nadolnyak, V. Hartarska. Climate Change Impacts on Farmland Values in the Southeast United States. Sustainability. 2018

Shen, X., V. Hartarska. Winners and Losers from Financial Derivatives Use: Evidence from Community Banks. 2018

Quaye, F.M., D. Nadolnyak, V. Hartarska. Factors Affecting Farm Loan Delinquency in the Southeast. 2017

Nadolnyak, D., X. Shen, V. Hartarska. Farm income and output and lending by the farm credit system. 2017

Lee, J., D. Nadolnyak, V. Hartarska. The Impact of Weather on Agricultural Labor Supply

Article. 2017

Keri Jacobs

Briggeman, B, K. Jacobs, P. Kenkel and G. McKee. 2016. “Current Trends in Cooperative

Finance.” Agricultural Finance Review 76(3): 402-410.

Li, Z., K. Jacobs, and G. Artz. 2015. “The Cooperative Capital Constraint Revisited.” Agricultural Finance Review 75(2): 253-266.

Ani Katchova

Sant’Anna, A.C., A. Katchove. Determinants of land value volatility in the Corn Belt. 2018

Jaclyn Kropp

Onel, G., J. Kropp, C.B. Moss. Asset concentration in the US agricultural balance sheet: a relative information approach. Agricultural Finance Review . 2018

Todd Kuethe, Mindy Mollory, and Todd Hubbs

Kuethe, T.H., T. Hubbs, D.R. Sanders. Evaluating the USDA’s Net Farm Income Forecast. Journal of Agricultural and Resource Economics 43 (3), 457-468. 2018

Kuethe. T.H., D.P. Bigelow. Bargaining Power in Farmland Rental Markets. 2018

Patrick, K., T.H. Kuethe, J. Ifft. Implement Dealer Financing and Farm Financial Stress. 2018

Hanson, E.D., B.J. Sherrick, T.H. Kuethe. The Changing Roles of Urban Influence and Agricultural Productivity in Farmland Price Determination. Land Economics 94 (2), 199-205. 2018

Mallory, M., T.H. Kuethe, T. Hubbs. Can Machine Learning Techniques Predict Non-performance of Farm Non-Real Estate Loans in the Ag Finance Databook. 2018

Kuethe, T.H. Will Farm Income Really Drop to a 12-Year Low in 2018? Farmdoc Daily 8(8):30. 2018

Kuethe, T.H., T. Hubbs. Banker’s forecasts of farmland values: A qualitative and Quantitative evaluation. Journal of Agricultural and Applied Economics 49 (4), 617-633. 2017

Kuethe, T.H., D.B. Oppedahl, T. Hubbs. Heterogonous Expectations of Agricultural Bankers. 2017

Zhang, W., S.H. Lence, T.H. Kuethe. Do Agricultural Professionals Self-Correct in Expert Opinion Surveys? Panel Data Evidence from Iowa. 2017

Ifft, J., T.H. Kuethe, K. Patrick. Nontraditional Lenders in the US Farm Economy. 2017

Michael Langmeier

Langemeier, M.R. Assessing Production Management Skills. 2018

Langemeier, M.R. How Can I Improve Labor Productivity? 2018

Liu, Y., M.R. Langemeier, I. Small, L. Joseph, W. Fry, J. Ristaino, A. Saville. A Risk Analysis of Precision Agriculture Technology to Manage Tomato Late Blight. Sustainability 10 (9), 3108. 2018

Russell, L.A., D.W. Wood, G.A. Ibendahl, M.R. Langemeier. The effect of the 2007 ethanol mandate on downside risk in agriculture: evidence from Kansas farmers. Applied Economics Letters, 1-5. 2018

Purdy, R., M.R. Langemeier. International Benchmarks for Corn Production. 2018

Langemeier, M.R., M. Boehlje. What is My Sustainable Growth Rate? 2018

Langemeier, M.R., M. Boehlje. How Will Expansion Impact My Current Operation? 2018

Langemeier, M.R., M. Boehlje. What Skills and Competencies Do I Need to Grow? 2018

Langemeier, M.R. Labor Efficiency and Productivity Benchmarks. The Journal of the ASFMRA, 17-28 1. 2018

Yeager, E.A., M.R. Langemeier. Economic efficiency adjusted for risk preferences. Applied Economics. 49 (16), 1627-1636 1. 2017

Langemeier, M.R., M. Boehlje. Drivers of Consolidation and Structural Change in Production Agriculture. Federal Reserve Bank of Kansas City, Economic Review 102, 5-23 2. 2017

Carson, N., M.R. Langemeier. An Examination of the Relationship Between Net Crop Returns and Cash Rent Values in Indiana. 2017

Sergio Lence

Plastina, A., S.H. Lence. A Parametric Estimation of Total Factor Productivity and Its Components in US Agriculture. American Journal of Agricultural Economics 1. 2018

Ashok Mirshra

Mishra, A.K., M. Harris, M. Bampasidou. Health Insurance Coverage and Labor Allocation of Beginning Farm Operator Households. 2018

Khanal. A.R., AK Mishra, U Honey Impact of diversification strategies on financial performance: A Multinomial Endogenous Switching Regression Approach, 2018

Coble, K.H., AK Mishra, S Ferrell, T Griffin. Big Data in Agriculture: A Challenge for the Future. Applied Economic Perspectives and Policy 40 (1), 79-96 10. 2018

C.B. Moss

Moss, C.B., JD Kropp, M Bampasidou. The financial economics of agriculture and farm management. The Routledge Handbook of Agricultural Economics, 689-712. 2018

Suh, D.H., CB Moss. Examining crop price effects on production decision and resource allocation: an ex-ante approach. Applied Economics 50 (26), 2909-2919. 2018

Moss, C.B., DH Suh, AK Mishra. An Information Approach to the Impact of Ethanol Policy on Regional Changes in Corn Production. Preprints. 2018

Onel, G., J Kropp, CB Moss. Asset concentration in the US agricultural balance sheet: a relative information approach. Agricultural Finance Review. 2018

Roderick Rejesus

Li, Z, RM Rejesus, X Zheng. Nonparametric Estimation and Inference of Production Risk with Categorical Variables.        2018

Bruce Sherrick

2018    Risk Perception and Agricultural Insurance Acceptance: Evidence from Typhoon Meranti in Fujian, China. (2018). Shaw, W. ; Yu, Chin-Hsien ; Ding, Jinxiu. In: 2018 Annual Meeting, August 5-7, Washington, D.C.. RePEc:ags:aaea18:274464.

2018    The Spatial and Temporal Diffusion of Agricultural Land Prices. (2018). Ritter, Matthias ; Odening, Martin ; Yang, Xinyue. In: FORLand Project Publications. RePEc:ags:bokufo:275485.

2018    Designing a whole-farm revenue insurance for agricultural crops in Zanjan province of Iran. (2018). Ghahremanzadeh, Mohammad ; Ainollahi, Moharram ; Dashti, Ghader ; Mohammadrezaei, Rassul . In: Economia Agraria y Recursos Naturales. RePEc:ags:earnsa:266488.

2017    Weather Index Insurance, Agricultural Input Use, and Crop Productivity in Kenya. (2017). Sibiko, Kenneth W ; Qaim, Matin. In: GlobalFood Discussion Papers. RePEc:ags:gagfdp:256214.

2018    Learning process in marketing contract choice: the case of cereals in the Paris Basin. (2018). Bignebat, C. In: 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia. RePEc:ags:iaae18:277233.

2018    Taxation Incidence on Rented Agricultural Land: An Evaluation of Ohios Current Agricultural Use Value Program. (2018). Katchova, A ; Dinterman, R. In: 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia. RePEc:ags:iaae18:277266.

2018    Financial Inclusion of Arable Crop Farmers in Nigeria. (2018). Obisesan, A ; Adeyonu, A. In: 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia. RePEc:ags:iaae18:277270.

2018    Risk Attitude, Technical Efficiency and Adoption: An Integrated Approach to Climate-Smart Rice Production in the Jianghan Plain, China. (2018). Tong, Q ; Zhang, J ; Swallow, B. In: 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia. RePEc:ags:iaae18:277311.

2018    The Spatial and Temporal Diffusion of Agricultural Land Prices. (2018). Ritter, M ; Odening, M ; Yang, X. In: 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia. RePEc:ags:iaae18:277414.

2018    On the role of probability weighting on WTP for crop insurance with and without yield skewness. (2018). Bougherara, Douadia ; Piet, Laurent. In: Working Papers. RePEc:ags:inrasl:279351.

2018    Does Crop Insurance Influence Commercial Crop Farm Decisions to Expand? An Analysis Using Panel Data from the Census of Agriculture. (2018). Burns, Christopher B ; Prager, Daniel L. In: Journal of Agricultural and Resource Economics. RePEc:ags:jlaare:267610.

2018    An Examination of Recency Bias Effects on Crop Insurance Purchases in the Mississippi Delta Region. (2018). Moore, Zachary. In: 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida. RePEc:ags:saea18:266711.

2018    A New Nonparametric Estimate of the Risk-Neutral Density with Application to Variance Swap. (2018). Jiang, Liyuan ; Yang, Jie ; Wang, Fangfang ; Li, Keren ; Zhou, Shuang. In: Papers. RePEc:arx:papers:1808.05289.

2018    Examining farmers willingness to grow and allocate land for oilseed crops for biofuel production. (2018). Bergtold, Jason ; Buysse, Jeroen ; Odening, Marting ; Andrango, Graciela C ; Flora, Cornelia ; Archer, David ; Embaye, Weldensie T. In: Energy Economics. RePEc:eee:eneeco:v:71:y:2018:i:c:p:311-320.

2018    Can Social Capital influence Smallholder Farmers’ Climate-Change Adaptation Decisions? Evidence from Three Semi-Arid Communities in Burkina Faso, West Africa. (2018). Fonta, William ; Wunscher, Tobias ; Yameogo, Thomas B. In: Social Sciences. RePEc:gam:jscscx:v:7:y:2018:i:3:p:33-:d:133928.

2018    Landscape Changes in Rural Areas: A Focus on Sardinian Territory. (2018). Balestrieri, Mara ; Ganciu, Amedeo. In: Sustainability. RePEc:gam:jsusta:v:10:y:2018:i:1:p:123-:d:125809.

2018    Land-Use Competition or Compatibility between Nature Conservation and Agriculture? The Impact of Protected Areas on German Standard Farmland Values. (2018). Lehn, Friederike ; Bahrs, Enno. In: Sustainability. RePEc:gam:jsusta:v:10:y:2018:i:4:p:1198-:d:141266.

2018    Arable Land Tenancy and Soil Quality in Germany: Contesting Theory with Empirics. (2018). Daedlow, Katrin ; Helming, Katharina ; Lemke, Nahleen. In: Sustainability. RePEc:gam:jsusta:v:10:y:2018:i:8:p:2880-:d:163644.

2018    On the role of probability weighting on WTP for crop insurance with and without yield skewness. (2018). Bougherara, Douadia ; Piet, Laurent. In: Working Papers. RePEc:hal:wpaper:hal-01911611.

2018    Short-term price density forecasts in the lean hog futures market. (2018). Trujillo-Barrera, Andres ; Garcia, Philip ; Mallory, Mindy L. In: European Review of Agricultural Economics. RePEc:oup:erevae:v:45:y:2018:i:1:p:121-142..

2018    Likelihood-based inference for bivariate latent failure time models with competing risks under the generalized FGM copula. (2018). Shih, Jia-Han ; Emura, Takeshi . In: Computational Statistics. RePEc:spr:compst:v:33:y:2018:i:3:d:10.1007_s00180-018-0804-0.

2017    Simultaneous adoption of contract farming and off-farm diversification for managing agricultural risks: the case of flue-cured Virginia tobacco in Pakistan. (2017). Lu, Wencong ; Ullah, Raza ; Latif, Abdul. In: Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards. RePEc:spr:nathaz:v:86:y:2017:i:3:d:10.1007_s11069-017-2748-z.

2017    Disaster risk management in agriculture: tragedies of the smallholders. (2017). Zulfiqar, Farhad ; Shah, Ashfaq Ahmad ; Iqbal, Muhammad Nadeem ; Shivakoti, Ganesh P ; Ullah, Raza . In: Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards. RePEc:spr:nathaz:v:87:y:2017:i:3:d:10.1007_s11069-017-2821-7.

2018    Pricing weather index insurance based on artificial controlled experiment: a case study of cold temperature for early rice in Jiangxi, China. (2018). Sun, Qing ; Xiao, Fang ; Zhang, Fangmin ; Che, Xianghong ; Yang, Zaiqiang. In: Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards. RePEc:spr:nathaz:v:91:y:2018:i:1:d:10.1007_s11069-017-3109-7.

Andrew Stevens

Stevens, A.W.. The economics of soil health. Food Policy. 2018

Carlos- Trejo-Pech

The Financial Performance of US Sugar Consumer Agribusinesses

V Siokos, C Trejo-Pech, K DeLong Lewis, C Boyer, D Lambert, C Clark

Southern Agricultural Economics Association 2018 Annual Meeting …                 2018

Modelling mergers and acquisitions in the agribusiness sector, 1990-2017

C Trejo-Pech, D Lambert, M Gunderson

National Ag Credit and NC - 1177 Joint Meeting, Saint Louis, MO, October 2018             2018

Is Growing Oranges in Florida a Good Investment?

C Trejo-Pech, T Spreen, M Zansler

American Journal of Agricultural Economics 100 (2), 625–639       1          2018

Florida’s Natural® and The Supply of Florida Oranges

C Trejo-Pech, T Spreen, L House

International Food and Agribusiness Management Review 21 (3), 437-454             2018

Assessing the CFA University Recognition Program: A Survey Based Analysis

M Terrance, G., Noguera, C and Trejo-Pech

Calum Turvey

The historical relationship between the US Farm Credit System, Farm Service Agency and commercial bank lending

CG Turvey, JE Ifft, A Carduner

Agricultural and Applied Economics Association                 2018

Chris Wolf

Animal Welfare Perceptions Of The US Public And Cow-Calf Producers


Journal of Agricultural and Applied Economics 50 (4), 544-578                  2018

Consumer perceptions of egg-laying hen housing systems

DS Ochs, CA Wolf, NJO Widmar, C Bir

Poultry science            1          2018

Accelerated tax depreciation and farm investment: evidence from Michigan

L Polzin, CA Wolf, JR Black

Agricultural Finance Review 78 (3), 364-375                        2018

Characterizing US dairy farm income and wealth distributions

JC Hadrich, CA Wolf, KK Johnson

Agricultural Finance Review 77 (1), 64-77    2          2017

A Survey Of Farm Management And Reproductive Management Strategies On US Commercial Dairy Farms

C Bir, N Widmar, N Thompson, C Wolf

Purdue University, College of Agriculture, Department of Agricultural …              2017

Elizabeth A. Yeager

Agricultural credit and the changing landscape of American agriculture

JC Hadrich, J Janzen, XL Etienne, E Yeager

Agricultural Finance Review 78 (4), 394-395                        2018

An Analysis of Hard Red Winter Wheat Convergence in Local Delivery Points

NJ Pates, EA Yeager

Agricultural and Applied Economics Association                 2018

Inferences from logistic regression models in the presence of small samples, rare events, nonlinearity, and multicollinearity with observational data

JS Bergtold, EA Yeager, AM Featherstone

Journal of Applied Statistics 45 (3), 528-546 2          2018

The Value and Feasibility of Farming Differently Than the Local Average

C Morris, K Dhuyvetter, EA Yeager, G Regier

Journal of Applied Farm Economics 2 (1), 2             2018

Examining the Efficiency and Profitability of Kansas Farms from 2005-2015

EA Yeager, OB Cody

Regional Research Committee NC-1177 (formerly NC-1014): Agricultural and …            2017

 Economic efficiency adjusted for risk preferences

EA Yeager, MR Langemeier

Applied Economics 49 (16), 1627-1636         1          2017

Reductions in Working Capital and Resulting Burn Rates for Producers

CL O'Brien, EA Yeager

The Journal of the ASFMRA, 97-111            1          2017

 Evaluating Effectiveness of Operating Strategies and Loan Term Changes on Repayment Capacity

FL Barnard, EA Yeager

The Journal of the ASFMRA, 26-42              2017


Wendong Zhang

Do farmers adopt fewer conservation practices on rented land? Evidence from straw retention in China

L Gao, W Zhang, Y Mei, AG Sam, Y Song, S Jin

Land Use Policy 79, 609-621             2018

Long term biochar effects on corn yield, soil quality and profitability in the US Midwest

DM Aller, SV Archontoulis, W Zhang, W Sawadgo, DA Laird, K Moore

Field Crops Research 227, 30-40       1          2018

The current farm downturn vs the 1920s and 1980s farm crises: An economic and regulatory comparison

W Zhang, K Tidgren

Agricultural Finance Review 78 (4), 396-411                        2018

Are Agricultural Professionals’ Farmland Value and Crop Price Forecasts Consistent?

W Zhang, W Zhang, C Hart

Center for Agricultural and Rural Development (CARD) Publications                     2018



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Alabama A&M University, Mississippi State University
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