Brief Summary of Minutes of Annual Meeting

The 2011 NC-1177 meetings were held October 3rd and 4th at the Denver Branch of the Federal Reserve Bank of Kansas City. A part of the meeting was held jointly with the National Agricultural Credit Committee (NACC). The NACC is comprised of agricultural lenders from throughout the U.S. The meeting allowed members of NC-1177 to interact with these representatives and better understand how the groups research intersects with the issues faced by agricultural and rural lenders. Several members made presentations of their NC-1177 research to NACC meeting. The joint component of the meeting included presentations on crop insurance, implications of Chinese Growth for U.S. agriculture, macro-economic updates, and farmland values. During the NC-1177 only meeting, members discussed the groups research projects and progress and presented completed and ongoing research. Presentations and sessions were organized in four sessions aligned with the following objectives:

Agricultural and Rural Finance Markets in Transition has had a productive year. The project has four objectives and progress has been made toward addressing each of these objectives. This annual report provides a summary of some of the work that has taken place toward each objective. Progress toward Objectives: The group has 4 primary objectives. Each will be discussed in turn. 1. Examine the impact of recent fluctuations in capital and commodity markets on the performance, management, and regulation of agricultural financial institutions Members have been actively involved in helping to understand how market volatility is impacting the performance, management, and regulation of financial institutions. Work in progress has examined the technical and economic efficiency of financial institutions as well as developing models to identify banks that may experience financial stress. Members also developed a simulation program that allows one to educate students and bankers on sound bank management practices. Other work has focused on examining how new products such as weather derivatives and crop insurance might be used to manage risk in agriculture. Because savings and off-farm income are strategies that can be used to mitigate risk in agriculture, other projects have sought to understand these behaviors and how these factors influence risk. Finally, work was conducted to better understand the factors influencing the dramatic increases in farmland values. This included a special issue of the publication Choices which was edited by group members and included contributions from several members of the group. 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. The group also made progress toward objective two. Some of the work investigated on the impact of changes in the seasonal farm labor market resulting from the stricter implementation of immigration policies, with a focus on labor-intensive organic farms versus larger, more mechanized conventional farms. The work determined strategic responses of organic and conventional farms to radical changes in the seasonal farm labor market conditions. It also identified efficient mulching and fumigation methods for vegetable farms when the traditional reliable fumigant methyl bromide is completely phased out from the market. Other efforts evaluated increased land values and rental rates, and their impact on producers and landlords. Other work examined using strategies such as direct marketing, use of alternative busienes structures, marketing strategies, and the adoption of genetically modified crops, influenced farm profitability. The impact of various government policies on farm income was also addressed. 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. Work toward objective three examined issues related to business succession planning, how beginning farmers adopt technology, and beginning farmer financial performance. Other work examined the impact of farm program payments for established and beginning farmers. Efforts also addressed how communities recover from natural disasters. 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. Work on objective four considered evaluated of the impact of Renewable Identification Numbers on the ethanol market and its ability to meet the Renewable Fuel Standard mandates. It also considered the impact of carbon policies on livestock producers. Additionally, work was conducted to understand the economic feasibility of alternative energy production systems. Project members secured several grants as a result of the their work on project objectives. The titles and funding sources for some of these activities included the following: Southern SARE. "Organic Farms' Credit Access and Farm Lenders' Assessment of Organic Farms' Credit Risks" (August 2011-July 2014). Southern SARE. Labor Input Substitution Decisions and Business Sustainability Strategies under Changing Farm Labor Market Conditions: Comparative Economic Viability Analyses of Organic and Conventional Farming Systems. (2007-2010). A Common Field A Whole Farm Management Education Program for Beginning Farmers. PI: A.L. Meyer, Co-PI: S. Isaacs, G. Halich, A. Katchova, and J. Hunter. USDA-NIFA, Beginning Farmer and Rancher Development Program, 2009-2012. Measuring the Relative Financial Vulnerability of Municipal Governments to Tropical Natural Disaster Risk, Mississippi-Alabama Sea Grant Consortium/GOM Regional Research Competition 02/01/2012-01/31/2014, Project Director Dr. J. Matthew Fannin, LSU AgCenter; Co-Project Director Dr. Ashok K. Mishra, LSU AgCenter; Co-Project; Director Dr. Joshua D. Detre LSU AgCenter & Louisiana State University; and Co-Project Director Dr. Carol Franz, LSU AgCenter Paulson, N.D. (PI), B. Kirwan, G. Schnitkey, and C. Gundersen. Gap Analysis of Data Currently Collected to Evaluate the Sustainability Performance of Commodity Agriculture. United Soybean Board, 2011-2012. Paulson, N.D. Strategic Planning to Offer Research-Based Extension Programs within a New Organizational Structure and Under New Directives. College of ACES Office of Research competitive planning grants program, Dec. 2010-Sep. 2011.  Energy Beet Research APUC. Energy Beet Impact Ozbun Economic Development Award. Education and Training for Next Generation Feedstock Managers A Planning Grant Proposal USDA HEC Challenge. Producing Hydrogen in North Dakota to Lower Carbon Footprint and Economic Costs of Corn Production North Dakota Corn Growers, The members of the group have also been active in developing outreach materials and presentations. The following are some of these contributions. Escalante, C.L. Custom Farm Machinery Rates in Georgia, 2011. Department of Agricultural and Applied Economics. AGECON 11-0003 (August 2011). Escalante, C.L. Cash Rents Paid for Georgia Farmland in 2010. Department of Agricultural and Applied Economics. AGECON 10-004, July 2010. Escalante, C.L. Georgia Farmland Values in 2010. Department of Agricultural and Applied Economics. AGECON 10-005, July 2010. Santos, F.I. and C. L. Escalante. Farm Labor Management Decisions of Organic and Conventional Farms: A Survey of Southeastern Farm Businesses. Department of Agricultural and Applied Economics, University of Georgia, AGECON-10-001, January 2010. Santos, F.I. and C. L. Escalante. Farmers Business Expectations and Strategies under Immigration-Related Changes in Farm Labor Market Conditions: A Survey of Southeastern Organic and Conventional Farm Businesses. Department of Agricultural and Applied Economics, University of Georgia, AGECON-10-002, January 2010. Bain, Rod and Cesar Escalante. Impacts of Regulation on Farm Labor. USDA Daily Radio Newsline, USDA Office of Communications. August 10, 2011. Audio interview can be accessed at http://audioarchives.oc.usda.gov/radnewsdetail.asp?ID=15884 Bain, Rod and Cesar Escalante. Challenges in Hiring Farm Labor. USDA Daily Radio Newsline, USDA Office of Communications. August 10, 2011. Audio interview can be accessed at http://audioarchives.oc.usda.gov/radnewsdetail.asp?ID=15897 Escalante, C.L. Actuality: On Farm Labor Hiring Challenges. USDA Daily Radio Newsline, USDA Office of Communications. August 10, 2011. Audio interview can be accessed at http://audioarchives.oc.usda.gov/radnewsdetail.asp?ID=15898 Presentations Contributed Paper Session, International Conference on Business and Information, Kitakyushu, Japan. The Farm Labor Hiring Predicament of Organic and Conventional Farm Operators in the Southeast. July 2010. Selected Poster Session. AAEA 2010 Annual Meeting, Denver, CO Foreign Workers and the Organic Farms Demand for Seasonal Unskilled Labor. July 2010 Selected Poster Session. AAEA 2010 Annual Meeting, Denver, CO Differentiation in Farm Labor Complement Profiles of Organic and Conventional Farms in the Southeast. July 2010 Selected Paper Session. AAEA 2010 Annual Meeting, Denver, CO The Relative Cost Efficiencies of Commercial Banks, Rural Financial Institutions, and Microfinance Institutions in China. July 2010 Earth Day Poster Session. Food vs. Fuel: The Missing Links Poster Session Earth Day, Georgia Institute of Technology, Atlanta, Georgia, April 2010. Selected Poster Session. SAEA 2010 Annual Meeting, Orlando, FL Hiring Unskilled Workers for Conventional and Organic Farm Labor: Who Gets Hurt When the (Unskilled Foreign) Workers are Gone? February 2010. Selected Paper Session. SAEA 2010 Annual Meeting, Orlando, FL Profitability Efficiency Analysis of Methyl Bromide Fumigants and Mulch Systems Alternatives for Pepper Production in Georgia. February 2010. Enlow, S.J., and A.L. Katchova. The Impact of the Financial Crisis on the Agribusiness Firms Performance. Selected paper, NC-1177 Agricultural and Rural Finance Markets in Transition Meeting, Denver, CO, 3-4 October 2011. Enlow, S.J., and A.L. Katchova. Agribusiness Firms Performance during the Global Economic and Financial Crisis. Selected symposium paper, International Food and Agribusiness Management Association World Forum and Symposium, Frankfurt, Germany, 20-21 June, 2011. 2012 Farm Bill Proposals for Farm Credit Services Crop Insurance Congress, November 2011 The Cases for and Against a County-Level ACRE Program for IL FBFM Fall Conference, August 2011 Illinois Land Values and Rental Rates for Stark County Farm Bureau, August 2011 Ag Outlook: Prices, Inputs, Land, and Policy. 2011 Top Producer Summer Seminar. Bettendorf, IA. Illinois Farmland Rent Factors and Trends. Illinois Farm Economics Summit Meetings, December, 2010. Understanding RINs Markets 2011 NC-1177 Meetings. Denver, CO Policy Concerns of Midwestern Grain Producers for the 2012 Farm Bill. With Gary Schnitkey. 2011. Part of an invited session at the AAEA Annual Meetings, Pittsburgh, PA. Risk and Incentives: A Not-So-Tenuous Tradeoff. With Barrett Kirwan. 2011. Selected paper at the AAEA Annual Meetings, Pittsburgh, PA. Spatial Estimates of Incidence Rates for Illinois Agricultural Cash Rents. Paper co-authored with Woodard, S., K. Baylis, and J.D. Woodard. Department of Agricultural Economics, University of Kentucky. May 6, 2011, Lexington, KY. Crop Insurance and U.S. Farm Exit Rates With Barrett Kirwan. 2011 SCC-76 Meetings, Atlanta, GA. Spatial Approaches to Panel Data in Agricultural Economics: A Climate Change Application. Paper co-authored with K. Baylis and G. Piras. Part of an invited session at the 2011 annual meetings of the Southern Agricultural Economics Association, February 5-8, Corpus Christi, TX. GHG Trading and the Potential for Livestock Production. Greenhouse Gases and Animal Agriculture Conference, Banff, Alberta, Canada. October 4, 2010. Invited presentation with Kathy Baylis.

Mishra, Ashok K. and H.H. Chang. Tax-Deferred Retirement Savings of Farm Households: An Empirical Investigation. Journal of Agricultural and Resource Economics Vol. 36(1), 2011: 160-176. Mishra, Ashok K., and K. Paudel. Estimating Permanent Income and Wealth of U.S. Farm Households. Applied Economics, Vol. 43(12), 2011: 1521-1533. Jette-Nantel, S., D. Freshwater, A.L. Katchova, and M. Beaulieu. Farm Income Variability and Off-Farm Diversification in Canadian Agriculture. Agricultural Finance Review 71(2011), forthcoming. Collier, B., A.L. Katchova, and J. Skees. Loan Portfolio Performance and El Nino, an Intervention Analysis. Agricultural Finance Review 71(2011):98-119. Leatham, D. "Structural Change in Stock Price Volatility in Asian Financial Markets. Journal of Economic Research, 15(2010):1-27. Woodard, J.D., N.D. Paulson, D. Vedenov, and G. Power. 2011. Estimation Efficiency in the Modeling of Dependence Structures: An Application of Alternative Copulas to Insurance Rating. Agricultural Economics, forthcoming. Paulson, N.D., C.E. Hart, and D.J. Hayes. 2010. A Spatial Bayesian Approach to Weather Derivatives. Agricultural Finance Review 70(1): 79-96. Gloy, B.A., M.D. Boehlje, C.L. Dobbins, C. Hurt, and T.G. Baker. Are Economic Fundamentals Driving Farmland Values? Choices, 26:2(2011). Henderson, J.R. and B.A. Gloy, Farmland Values. Editors, Special Theme Edition of Choice Magazine. Choices, 26:2(2011). Briggeman, B.C. The Role of Debt in Farmland Ownership. Choices, 26:2(2011). Schnitkey, G.D. and B.J. Sherrick. Income and Capitalization Rate Risk in Agricultural Real Estate Markets. Choices, 26:2(2011). Kuethe, T.H., J. Ifft, and M. Morehart. The Influence of Urban Areas on Farmland Values. Choices, 26:2(2011). Yu, Y., C.L. Escalante, J. Houston, L. Gunter, and X. Deng. Analyzing scale and scope specialization efficiencies of U.S. agricultural and non-agricultural banks using the Fourier Flexible Functional Form Applied Financial Economics, 21,15(August 2011): 1103-1116. Uematsu, H., and Ashok K. Mishra. Use of Direct Marketing Strategies by Farmers and Its Impact on Farm Business Income. Agricultural and Resource Economics Review, Vol. 40(1), 2011: 1-19. Detre, J., H. Uematsu, Ashok K. Mishra. The Influence of GM Crop Adoption on the Profitability on Farms Operated by Young and Beginning Farmers. Agricultural Finance Review, Vol. 71(1), 2011:41-61. Chang, H.H., Ashok K. Mishra. Does the Milk Income Loss Contract Program Improve the Technical Efficiency of US Dairy Farms? Journal of Dairy Science, Vol. 94, 2011: 2945-2951. Detre, J. T. B. Mark, Ashok K. Mishra, and A. Adhikari. Linkage between Direct Marketing and Farm Income: Double Hurdle Approach. Agribusiness: an International Journal, Vol. 27(1), 2011:19-23. Mishra, Ashok K, R. P. Williams, and J. D. Detre. Internet Access and Internet Purchasing Patterns of Farm Households Agricultural and Resource Economics Review, Vol. 38(2), 2009: 1-10. Thompson, W., Ashok K. Mishra, and J. Dewbre. Farm Household Income and Transfer Efficiency: An Evaluation of U.S. Farm Program Payments. American Journal of Agricultural Economics, Vol. 91(5), 2009: 1296-1301. Mishra, Ashok K., Livanis, G.T., Moss, C.B. Did the Federal Agriculture Improvement and Reform Act of 1996 Affect Farmland Values? Entropy, Vol. 13, 2011:668-682. D'Antoni, J., Ashok K. Mishra., A. Barkley. Feast or Flee: Government Payments and Labor Migration from Agriculture. Forthcoming, Journal of Policy Modeling, 2011. Durguner, S., and A.L. Katchova. Credit Risk Models by Type of Business. The Business Review 17(2011), forthcoming. Detre, Joshua D., Michael A. Gunderson, Christine A. Wilson, and Brian C. Briggeman, Ag Lending: The Next Generation, Agricultural Finance Review. Vol. 71, No. 3, 2011. Gunderson, M.A., J.D. Detre, B.C. Briggeman, C.W. Wilson. Ag Lending: The Next Generation, Agricultural Finance Review, 71(3)(2011): In press. Escalante, C.L., S.L. Perkins, and F.I. Santos. When the Seasonal Foreign Farm Workers Are Gone. Journal of the American Society of Farm Managers and Rural Appraisers,74,1(2011): 83-96. Ferrer, M.C., E.G. Fonsah, and C.L. Escalante. Risk Efficient Fumigant-Mulching System Alternatives for Bell Pepper Production. Journal of the American Society of Farm Managers and Rural Appraisers,74,1(2011): 162-174. Dressler, Jonathan B. and Loren W. Tauer, Revealing an Equitable Income Allocation among Dairy Farm Partnerships, Presentation at the Agricultural and Applied Economics Meetings, Pittsburgh, Pennsylvania, July 24-26, 2011. Paulson, N.D., G.D. Schnitkey, and B.J. Sherrick. 2010. Rental Arrangements and Risk Mitigation of Crop Insurance and Marketing: Impacts in the Corn-Belt. Agricultural Finance Review 70(3): 399-413. Paulson, N.D., A.L. Katchova, and S.H. Lence. 2010. An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans. Journal of Agricultural and Food Industrial Organization 8(1): Article 4. Mishra, Ashok K, H.S. El-Osta, S. Shaik. Succession Decisions in U.S. Family Farm Businesses. Journal of Agricultural and Resource Economics 35(1), 2010:133-152. Detre, J., Ashok K. Mishra, A. Adhikari. Factor Affecting the Adoption of Genetically Modified Crops by Young and Beginning U.S. Farmers and Rancher Journal of the American Society of Farm Managers and Rural Appraisers Vol. 71 (1), 2010: 130-144. Mishra, Ashok K, C. H. Wilson, and R. P. Williams. Factors Affecting the Financial Performance of New and Beginning Farmers. Agricultural Finance Review, 69(2), 2009: 160-79. Detre, J., H. Uematsu, Ashok K. Mishra. The Influence of GM Crop Adoption on the Profitability on Farms Operated by Young and Beginning Farmers. Agricultural Finance Review, Vol. 71(1), 2011:41-61. Gillespie, J. and Ashok K. Mishra. Off-farm Employment and Reasons for Entering Farming as Determinants of Production Enterprise Selection in US Agriculture. The Australian Journal of Agricultural and Resource Economics, 55, 2011: 411-428. Kropp, J. D. and A. L. Katchova. The Effects of Direct Payments on Liquidity and Repayment Capacity of Beginning Farmers, Agricultural Finance Review, 71, 3(2011) forthcoming. Ahrendsen, B.L., and A.L. Katchova. Financial Ratio Analysis using ARMS Data. Agricultural Finance Review, forthcoming. Kropp, J., and A.L. Katchova. The Effect of Direct Payments on Liquidity and Repayment Capacity for Beginning Farmers. Agricultural Finance Review 71(2011), forthcoming. Meyer, L., J. Durguner, S., and A.L. Katchova. Repayment Capacity of Farmers: A Balanced Panel Data Approach. Journal of Applied Economics and Policy 30(2011):14-30. Hunter, A.L. Katchova, S. Lovett, D. Thilmany, M. Sullins, and A. Card. Approaching Beginning Farmers as a New Stakeholder for Extension. Choices 26(2011), 5: 1-7. Fannin, J. Matthew, Joshua D. Detre, Jeanne St. Romain, and Laura Falgoust, Municipal versus County Government Financial Health following a Natural Disaster: Does Size Matter? Evidence from Louisiana following the 2005 Hurricane Season, Southern Regional Science Association Annual Meeting (New Orleans, LA, March 23-27, 2011). Fannin, J. Matthew, John D. Barreca, and Joshua D. Detre, The Role of Public Wealth on Recovery and Resiliency to Natural Disasters in Rural Communities Agricultural and Applied Economics Association and Northeastern Agricultural Economics and Resource Association Joint Annual Meeting (Pittsburg, PA; July 24-26, 2011). Detre, Joshua D., Hiroki Uematsu, and Ashok K. Mishra, "Adoption of Technology and Its Impact on Profitability of Young and Beginning Farmers: A Quantile Regression Approach," Agricultural Finance Review. Vol. 71, No. 1, 2011 (41-61). Paulson, N.D. and G.D. Schnitkey. 2012. Policy Concerns of Midwestern Grain Producers for the 2012 Farm Bill. American Journal of Agricultural Economics, forthcoming Noland, K., J. Norvell, N.D. Paulson, and G.D. Schnitkey. 2011. The Role of Farmland in an Investment Portfolio: Analysis of Illinois Farmland. Journal of the American Society of Farm Managers and Rural Appraisers 74(1): 149-161. Paulson, N.D. and G.D. Schnitkey. 2010. Expected Payments and Considerations for the New ACRE Program. Journal of the American Society of Farm Managers and Rural Appraisers 73(1): 218-229. Raghunathan, U., C.L. Escalante, J.H. Dorfman, J. Houston, and G. Ames. The Effect of Agriculture on Repayment Efficiency: A look at MFI borrowing groups. Agricultural Economics,42,4(July 2011): 465-474. Jacobsen, K.L., C.L. Escalante, and C.F. Jordan. Economic Analysis of Experimental Organic Agricultural Systems on a Highly Eroded Soil of the Georgia Piedmont, USA. Journal of Renewable Agriculture and Food Systems, 25,4(2010): 296-308. Chang, H.H., Ashok K. Mishra, and M. Livingston. Agricultural Policy and Its Impact on Fuel Usage: Empirical Evidence from Farm Household Analysis. Applied Energy, Vol. 88, 2011:348-353. Darby, Paul, Tyler B. Mark, Joshua D. Detre, and Michael Salassi, Advanced Biofuel Production in Louisiana Sugar Mills: an Application of Real Options Analysis Agricultural and Applied Economics Association and Northeastern Agricultural Economics and Resource Association Joint Annual Meeting (Pittsburg, PA; July 24-26, 2011). Detre, Joshua D., and Michael A. Gunderson, "The Triple Bottom Line: What is the Short Run Impact on the Returns to Agribusiness Stocks," International Food and Agribusiness Management Review. Vol. 14, No. 4, 2011 (41-61). Gloy, B.A. The Potential Supply of Carbon Dioxide Offsets from the Anaerobic Digestion of Dairy Waste in the United States. Applied Economic Perspectives and Policy, 33:1(2011):59-78. Baylis, K., N.D. Paulson, and G. Piras. 2011. Spatial Approaches to Panel Data in Agricultural Economics: A Climate Change Application. Journal of Agricultural and Applied Economics 43(3): 325-338. (senior authorship is shared) Gloy, B.A. and J.B. Dressler. Financial Barriers to the Adoption of Anaerobic Digestion on U.S. Livestock Operations. Agricultural Finance Review, 70:2(2010):157-168. Roberts, K.G., B.A. Gloy, S. Joseph, N.R. Scott, and J. Lehmann. Life Cycle Assessment of Biochar Systems: Estimating the Energetic, Economic and Climate Change Potential. Environmental Science and Technology, 44:2(2010):827-833. Maung TA, Gustafson CR, The economic feasibility of sugar beet biofuel production in central North Dakota, Biomass and Bioenergy (2011), http://dx.doi.org/10.1016/j.biombioe.2011.05.022 Maung T. et. al. Market Information on Sourcing Cellulosic Feedstock for Biofuel Production in the Northern Plains Region of the United States Journal of Agricultural Science and Technology. 2011, forthcoming