Financial Resilience of Young and Beginning Farmers under Recession: A Transition Probability Approach

Abstract

Abstract This paper examines the relative financial strength and endurance of several paired classes of farmers according to business maturity (beginning versus mature farm businesses) and farm operators’ age and experience (young versus older, more experienced farm operators) by utilizing transition probability approach. Results show that the financial stress resulting from the late 2000s recession did not significantly influence the financial vitality of farms in general, regardless of the farm type. The financial strength of farms operated by young farm operators and beginning farms during the recessionary period remained at favorable levels, although their performances were lower than their counterparts. JEL classification numbers: Q10, Q12, Q14. Keywords: Transition probability, Recession, Agriculture, Credit migration, Agricultural finance.