Ad hoc government payments impact on non-real estate farm debt

Purpose: The authors examined the impact of the Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments to United States agricultural producers on non-real estate agricultural loans. Design/methodology/approach: The authors used quarterly, state-level commercial bank data from 2016–2020 to estimate dynamic panel models. Findings: The authors found MFP and CFAP payments not associated with the percentage of non-real estate agricultural loans with payments over 90 days late. However, these payments associated with the percentage of non-real estate agricultural loans with payments between 30 and 89 days late. The available data utilized cannot consider when producers received the actual payment and what they specifically did with those funds. Originality/value: The contribution of this study is for US policymakers and agricultural lenders. The findings could be helpful in designing and implementing future ad hoc payment programs and provide an understanding of potential shortcomings of the current safety net for agricultural producers in the Farm Bill. Additionally, findings can assist agricultural lenders in predicting the impact of ad hoc payments on their distressed loan portfolios. © 2022, Charles Martinez, Christopher N. Boyer, Tun-Hsiang Yu, S. Aaron Smith and Adam Rabinowitz.

Livestock risk protection payments for feeder cattle during COVID-19

Daily offering data for Livestock Risk Protection (LRP) insurance for feeder cattle in the USA was used to measure the indemnity payments that could have been paid when prices rapidly declined during the COVID-19 pandemic. Findings show to policy makers and producers how LRP mitigated losses in recent years and during the pandemic.

Ad hoc government payments impact on non-real estate farm debt

Purpose The authors examined the impact of the Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments to United States agricultural producers on non-real estate agricultural loans. Design/methodology/approach The authors used quarterly, state-level commercial bank data from 2016-2020 to estimate dynamic panel models. Findings The authors found MFP and CFAP payments not associated with the percentage of non-real estate agricultural loans with payments over 90 days late. However, these payments associated with the percentage of non-real estate agricultural loans with payments between 30 and 89 days late. The available data utilized cannot consider when producers received the actual payment and what they specifically did with those funds. Originality/value The contribution of this study is for US policymakers and agricultural lenders. The findings could be helpful in designing and implementing future ad hoc payment programs and provide an understanding of potential shortcomings of the current safety net for agricultural producers in the Farm Bill. Additionally, findings can assist agricultural lenders in predicting the impact of ad hoc payments on their distressed loan portfolios.