Returns to Equity Capital by Farm Type and Economic Class of Farm, Based on 1970 Data

J. Bruce Hottel and Robert D. Reinsel

No 347305, Miscellaneous Publications from United States Department of Agriculture, Economic Research Service

Abstract: This report analyzes income flows, asset values, and debt by economic class of farm and concludes that the rate of returns to equity capital grows as the economic size of the farm increases. For 1970, average rates of return to equity capital varied substantially among the 12 major farm types. Returns to equity were generally negative on smaller farms but increased substantially with size. A close correlation existed between farm size, farm debt, and rates of returns to equity. The range in returns was from -6.5 percent on the smallest farms to +6.8 percent on the largest farms. Additional returns due to appreciation in land values, increased the U.S. returns from 2.1 percent to 5.6 percent in 1970.

Keywords: Agricultural Finance; Financial Economics (search for similar items in EconPapers)
Pages: 108
Date: 1977-09
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersmp:347305

DOI: 10.22004/ag.econ.347305

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