Abstract
AbstractPeriods of high commodity prices and rising farmland debt loads are typically accompanied with speculation that there will eventually be declines in commodity and farmland prices that may lead to a farm credit crisis. We evaluate the likelihood of such a crisis using a simulation model of heterogeneous farmers during periods of volatile commodity and farmland prices. This model simulates a period of increasing commodity and farmland prices with a subsequent drop in prices of farmland and commodities. We find default rates are less sensitive to commodity prices than farmland prices, that the length of time prices remain low matters significantly, and that when both farmland and commodity prices fall together defaults rise more than the sum of the responses to separate price shocks.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
