Richardson, James W. Outlaw, Joe L. Knapek, George M. Raulston, J. Marc Herbst, Brian K. Anderson, David P. Klose, Steven L.
Year of Publication:
AFPC Briefing Paper 13-1
The Agricultural and Food Policy Center (AFPC) at Texas A&M University develops and maintains data to simulate 95 representative crop, dairy, and livestock operations in major production areas in 28 states. The chief purpose of this analysis is to project the economic viability of those farms by region and commodity for 2013 through 2017. The data necessary to simulate the economic activity of these operations is developed through ongoing cooperation with panels of agricultural producers in selected states. The Food and Agricultural Policy Research Institute (FAPRI) provided projected prices, policy variables, and input inflation rates in their January 2013 Baseline. Under the January 2013 Baseline, 49 of the 63 crop farms are considered in good liquidity condition (less than a 25 percent chance of negative ending cash by 2017). One crop farm has between a 25 percent and a 50 percent likelihood of negative ending cash, and the remaining 13 crop farms have greater than a 50 percent chance of negative ending cash. Furthermore, 46 of the 63 crop farms are considered in good equity position (less than a 25 percent chance of decreasing real net worth during the study period). Eight crop farms have between a 25 percent and 50 percent likelihood of losing real net worth, and nine crop farms have greater than a 50 percent probability of decreasing real net worth. The following discussion provides an overall evaluation by commodity considering both liquidity and equity measures. * FEEDGRAIN FARMS: Twenty of the 22 feedgrain farms are in good overall financial condition. One is classified in marginal condition, and one is in poor condition. * WHEAT FARMS: All eleven representative wheat farms are classified in good overall financial condition. * COTTON FARMS: Eight of the 16 cotton farms are classified in good condition, three are in marginal condition, and five are in poor condition. * RICE FARMS: Four of the 14 rice farms are projected to be in good financial condition, five are in marginal condition, and five are in poor condition. * DAIRY FARMS: Eleven of the 21 dairies are in good overall financial condition. Ten are classified in marginal condition, and none are in poor condition. * BEEF CATTLE RANCHES: Eight of the 11 cattle ranches are classified in good financial condition, two are in marginal condition, and one is projected to be in poor condition.