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Impact of Selected Financial Options on a Representative Cow-Calf Ranch in Western North Dakota

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Title: Impact of Selected Financial Options on a Representative Cow-Calf Ranch in Western North Dakota
Author: Bryn, D. Fred; Johnson, Roger G.; Ali, Mir B.; Watt, David L.
Description: This article continued to project a 4 year financial future of a typical cash grain farm in central North Dakota. In addition, this article presents a similar report for a western cow-calf operation. Reduced fed costs from lower crop prices result in a brighter future for cow-calf operators than had been evidenced in recent years. This article estimates the costs and advantages of several financial options including: sale of assets with lease-back, a 35% debt forgiveness and a 35% interest rate buy down. The research examines financial performance assuming optimistic and pessimistic economic forecasts, also. At the time of this article, North Dakota agriculture was in a critical time of readjustment. The article moves onto farm assumptions and economic scenarios. The economic scenarios are: a baseline economic scenario, a pessimistic economic scenario and an optimistic scenario. Next discussed are policy options. These are sale with lease-back, reduction in indebtedness and a reduction in interest rate. Finally, a policy option should be examined in terms of what it would return to the rancher in relation to what it cost, either to the government or lending institution. Those policies that would benefit the rancher the most are: higher commodity prices, sale of assets with a lease back, debt reduction and interest rate reduction.
Date: 1987
Permalink: http://hdl.handle.net/10365/5990

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