Farm Sector Liquidity Forecast to Decline in 2021

Carrie Litkowski

Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, 2021, vol. 2020, issue 03

Abstract: Forecasts from USDA’s Economic Research Service (ERS) show farm sector liquidity declining in 2021, following forecasted general improvement in 2020. Liquidity is the ability to convert assets to cash quickly to satisfy short-term obligations when due, without the assets losing material value. It is one tool for measuring the financial performance of the U.S. farm sector over time. USDA uses several different financial metrics to evaluate farm sector liquidity: working capital, the times interest earned ratio, the current ratio, the debt service ratio, and the ratio of working capital to gross revenues.

Keywords: Agribusiness; Agricultural Finance; Farm Management; Financial Economics; Production Economics (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersaw:310105

DOI: 10.22004/ag.econ.310105

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