The Efficiency Effects of Consolidation in the Farm Credit System

Joshua Strine, Chad Fiechter and Todd Kuethe

No 404332, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: Between 2002 and 2023, 37 mergers occurred among Farm Credit System (FCS) agricultural credit associations (ACAs). We examine the effect of these mergers on ACA technical efficiency and financial performance using a window data envelopment analysis followed by a second-stage stacked difference-in-differences framework. We find no significant improvement in technical efficiency following consolidation. However, mergers yield different benefits for the merging associations. The smaller ACAs in the mergers reduce their bank efficiency ratios by 9.8–9.9 percentage points, a 34 percent reduction in the average ACA bank efficiency ratio, indicating they have less non-interest expense per dollar of income. Larger ACAs in the mergers increase their net interest margin by 0.12 percentage points, a 4 percent increase relative to the average ACA net interest margin, indicating a greater interest margin relative to their earning assets.

Keywords: Agricultural Finance; Farm Management (search for similar items in EconPapers)
Pages: 69
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/404332/files/1 ... Kuethe_2026_AAEA.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404332

DOI: 10.22004/ag.econ.404332

Access Statistics for this paper

More papers in 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().