A model to value Federal Agricultural Mortgage Corporation (Farmer Mac) agricultural mortgage-backed securities (AMBS) is developed and numerically solved. The results suggest prepayment penalties currently being used by Farmer Mac reduce yields on AMBS considerably. Even with prepayment...

"In this paper, we evaluate the proposition that market structure, including supply and demand elasticities, plays a significant role in influencing equilibrium price dynamics. We show that the more inelastic the demand and/or supply of a commodity is, the more price risk will be faced by...

Since the farm financial crisis of the 1980s, Farm Credit System banks continue to merge and consolidate to enhance competitiveness. Two mixed-integer programming models of AgChoice Agricultural Credit Association (ACA), a recently merged ACA in Pennsylvania, were developed to determine the...

In investment analysis, uncertainty and irreversibility can undermine net present value (NPV) as a decision rule since the option to delay investment may have value. We apply the real option theory of investment to the pasture investment decision facing livestock producers in southwest Western...

Commercial feed blending is a complex process consisting of many potential raw ingredients and final products. The sheer number of daily orders and final products at a typical feed mill means that raw ingredients cannot be mixed to directly produce final products in an economical fashion. As a...

For agricultural businesses, managing debt capital means choosing from among myriad sources and terms for financing for inputs, machinery, equipment, and land. Providers of debt capital, including input suppliers, equipment dealers, commercial banks, and the Farm Credit System, offer differing...

Some past studies of credit risk ratings migration have found trend reversals and evidence that the data-generating process is nonstationary. Using a sample of Farm Credit System mortgages, we find no compelling statistical evidence of either phenomenon. We do find evidence that our sample of...

U.S. banking markets have undergone important structural and institutional changes. Overall, the sector has experienced steady consolidation through mergers and acquisitions that have resulted in fewer banks holding a greater value of the total assets. Despite consolidation, new branch offices...