Search

Purpose: The purpose of this study is to examine how US farm sector performed in 2020, the first year of the pandemic. There were significant supply and demand shocks due to the pandemic. Furthermore, there was significant fluctuation in commodity prices and record high government payments in 2020. This study aims to examine the performance and position of US farm sector (financially) to system (and global economy) wide shocks. Design/methodology/approach: The authors examine 2020 values for farm sector financial ratios before and after the onset of the Coronavirus (COVID-19) pandemic using the data from the United States Department of Agriculture to understand the financial position and performance of the US farm sector. Findings: The authors find solvency ratios (which are indicators of the sector's ability to repay financial liabilities via the sale of assets) worsened in 2020 relative to pre-pandemic expectations. Efficiency ratios (which evaluate the conversion of assets into production and revenue) and liquidity ratios (which are indicators of the availability of cash to cover debt payments) showed mixed outcomes for the realized results in 2020 relative to the pre-pandemic forecasts. Four profitability ratios were stronger in 2020 relative to pre-pandemic expectations. All solvency, liquidity and profitability ratios plus 2 out of 5 efficiency ratios for 2020 were weaker than their respective average ratios obtained from 2000 to 2019 data. Originality/value: This research is one of the first papers to use financial ratios to examine how the US farm sector performed in 2020 compared to expectations prior to the pandemic.

This article examines the potential consequences of certain provisions of the Tax Cuts and Jobs Act of 2017 expiring on the tax liabilities of farm households. The provisions that will have the greatest impact include reduced marginal tax rates, the qualified business income deduction, and the expanded Child Tax Credit. If these provisions expire, farm households can expect higher tax liabilities, with moderate-sales farm households experiencing the largest percentage increase. The article also discusses the expiration of estate tax provisions, which would result in a higher percentage of farm operator estates owing tax. The information in this document is based on a study conducted by Tia M. McDonald and Ron Durst in February 2024 and includes sales data for different sizes of farms and households, as well as information on estate tax exemptions. The article suggests that a decrease in the estate tax exemption could have implications for family farms. It also provides additional resources for further research on the Farm Bill, federal tax issues, and the effects of the Tax Cuts and Jobs Act on farms and households. [Extracted from the article]

The article discusses the financial performance of African-American farms in the United States compared to farms operated by individuals of other races. It highlights that African-American farms generally had lower total value of production, net cash farm income, and government payments. The article also mentions that African-American farmers have historically had limited access to government support programs due to the small size of their farms. The COVID-19 pandemic has brought renewed attention to the economic challenges faced by minority farmers, leading to the creation of an equity commission and increased funding for outreach and assistance programs. The article concludes by discussing the differences in farm size, profitability, and commodity choice that contribute to the financial disparities between African-American farms and other farms. [Extracted from the article]

Purpose: In recent years, socially disadvantaged farmers and ranchers have increased their usage of nontraditional lending nearly converging to levels of usage observed for nonsocially disadvantaged groups. The purpose of this research is to explore explanations for this trend in lending utilization by socially disadvantaged farmers and ranchers by examining factors that influence credit usage and credit choice. Design/methodology/approach: A multinomial logit is used to estimate the probability of loan choice given characteristics of the producer and farm. Findings: While not a causal analysis, the results suggest that farm characteristics, which differ between socially disadvantaged and nonsocially disadvantaged producers, are associated with a lower likelihood of credit usage by an average socially disadvantaged farmer. For those that have loans, socially disadvantaged producers exhibit higher debt-to-asset ratios and lower current ratios, characteristics that are typically associated with higher than observed probability of usage of loans other than nontraditional. Socially disadvantaged producers also have lower value of assets which is associated with a higher probability of nontraditional loan usage. Originality/value: This research is among the first to examine loan usage of socially disadvantaged producers using nationally representative data.