1. Home
2. Conferences
3. 2016 National Farm Management Conference

Do agricultural producers view the cost of financing their production activities and capital costs, in the same way as they view other input costs?

Robert Preston and Todd Muehler

Summary

This study examines whether agricultural producers view the cost of financing their production activities and capital costs for assets, such as land and machinery, in the same way as they view other input costs for such things as seed, chemicals, fuel, feed, product marketing, etc. Historically, sources of financing have consisted of internally generated funds, external funding from capital investment or borrowed funds from financial institutions and other sources. Traditionally, banks and other local financial institutions have been the primary source of external funding. However, with the increase in competitive funding options available to today’s agricultural producers through “non-traditional” sources such as government sponsored entities and internet based sources of financing, traditions may have changed. In order to ascertain the answer to the underlying question, this study will examine Phase III data in USDA Agricultural Resource Management Surveys from 1996 to 2014. The results of this study is expected to provide both users and providers of farm financing with information to assess their current level of access to production and capital financing, and inform both users and providers of potential for opportunities for modifications, which can improve the current level of access to credit for agricultural producers.

Details

---