Cesar L. Escalante
University of Georgia
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Featured researches published by Cesar L. Escalante.
Agricultural Finance Review | 2002
Peter J. Barry; Cesar L. Escalante; Paul N. Ellinger
The migration approach to credit risk measurement is based on historic rates of movements of individual loans among the classes of a lender’s risk‐rating or credit‐scoring system. This article applies the migration concept to farm‐level data from Illinois to estimate migration rates for a farmer’s credit score and other performance measures under different time‐averaging approaches. Empirical results suggest greater stability in rating migrations for longer time‐averaging periods (although less stable than bond migrations), and for the credit score criterion versus ROE and repayment capacity.
Agricultural Finance Review | 2001
Peter J. Barry; Cesar L. Escalante; Sharon K. Bard
This study uses farm‐level data from the Illinois Farm Business Farm Management Association to determine whether the variability of net farm income is significantly influenced by farm size, financial structure, and other structural characteristics of farm businesses. The econometric results indicate that under a cross‐sectional model the relative variability of real net farm income is not significantly influenced by farm size, measured either by acreage or value of farm production. However, under a time‐series/cross‐section model, periodic variations in farm size, along with differences in the relative crop price received, crop yield, degree of enterprise diversification, and geographic location, can significantly influence changes in farm income variability.
Applied Economic Perspectives and Policy | 2000
Peter J. Barry; LeeAnn M. Moss; Narda L. Sotomayor; Cesar L. Escalante
A lease pricing model for farm land is developed that is consistent with traditional leasing principles and allows greater flexibility in determining crop share levels either separately or in combination with a fixed cash payment. The share levels are linked to the farms soil productivity, the costs of each partys resource contributions, and their respective cost structures. The resulting menu of lease prices can enhance the equitability of leasing contracts, expand the range of contract choices, promote mutual incentives for the leasing parties, and heighten the efficiency of leasing markets through greater standardization of leases.
Journal of Agricultural and Applied Economics | 2003
Cesar L. Escalante; Peter J. Barry
This study employs correlation relationships to measure the strength of trade-offs between business and financial risks as a representative of the strategic capital adjustment process. Under different business risk measures based on varying lengths of historical farm income data, results suggest that farmers tend to adopt a myopic perspective when contemplating risk-balancing plans. Cross-sectional regression results for two-time period models covering the decade of the 1980s and 1990s yielded important implications. The liquidity-constrained environment of the 1980s emphasizes the combination of risk-balancing plans, specialization, and market revenue-enhancing strategies. In the 1990s, risk balancing becomes compatible with risk-reducing crop diversification and insurance protection plans.
Agricultural Finance Review | 2002
Cesar L. Escalante; Peter J. Barry
This study identifies key strategies employed by Illinois grain farms to prevent the erosion of their equity positions due to significant downturns in commodity prices during the implementation of the 1996 farm bill. The econometric results emphasize the collective importance of revenue enhancement, cost reduction, and capital management strategies. Nonfarm‐related strategies aimed at minimizing equity withdrawals through regulated family living expenditures, as well as supplementing low farm incomes with receipts from nonfarm employment and investments, significantly affect cost value equity growth rates. Moreover, significant financial and asset management strategies include those that minimize the costs of borrowing and maintain high asset productivity levels through elimination of excess farm capacity.
Agricultural Finance Review | 2009
Cesar L. Escalante; Calum G. Turvey; Peter J. Barry
Purpose - The purpose of this paper is to introduce the application of sustainable growth challenge (SGC) model in agricultural finance as a conceptual paradigm and then uses the model to measure sustainable growth rates for Illinois grain and livestock farmers. The SGC concept is used to understand the economic conditions and business decisions made by farmers in certain episodes of the time period analyzed. Design/methodology/approach - A seemingly unrelated regression approach is used to analyze the interrelationships of the four levers of growth using a panel data of Illinois farm-level financial and operating information. The second analysis flows from the first and examines aggregate US farm data to provide an historical perspective of changes in the SGC over time. Findings - Econometric results indicate the relevance of the SGC model in explaining farm financial and operating decisions. The farms’ tendencies to attain balanced growth seem to be more influenced by asset productivity and leverage decisions, which are given different emphasis by grain and livestock farms due to differing operational structures and constraints. This studys estimation and analysis of the USA farm sectors actual and sustainable growth rates from 1981 to 2001 data generally show that the industry has adapted to positive or negative SGCs in a manner consistent with the model. Originality/value - This paper explores the relevance of the SGC model as a business, policy and teaching tool for understanding issues surrounding farmers’ financial and operating decisions.
Agricultural Finance Review | 2006
Cesar L. Escalante; Calum G. Turvey
The increasing demand for highly differentiated products in today’s enterprise economies has emphasized the small firms’ comparative advantage over larger firms. Business mortality rates, however, remained very high among more vulnerable start‐up businesses still in their earliest stage of business development. The challenges experienced by agribusiness entrepreneurs and their counterparts from other industries in their start‐up years are analyzed using case‐study research techniques. Results indicate that highly differentiated start‐up conditions between industries and among firms usually resulted in varied survival strategies. Notable differences include pricing policies dependent on market structures, more consultative management styles, inadequate start‐up resources, and preferences for brand new equipment.
Agricultural Finance Review | 2007
Xiaohui Deng; Cesar L. Escalante; Peter J. Barry; Yingzhuo Yu
This study introduces two Markov chain time approaches, time‐homogeneous and nonhomogeneous models, for analyzing farm credit risk migration as alternatives to the traditional discrete‐time (cohort) method. The Markov chain models are found to produce more accurate, reliable transition probability rates using the 3 x 1 migration measurement method used by farm lenders. Compared to corporate bond ratings migration results, this study obtained larger mean differences in singular value decomposition between the cohort matrix and each of the Markov chain matrices. This finding suggests that the omission of transient, indirect migration activities under the cohort method is more costly when applied to farm credit analysis. This discrepancy could lead to understated transition probability estimates which, in turn, could produce misleading indicators of farm loan portfolio quality.
American Journal of Agricultural Economics | 2005
Roderick M. Rejesus; Cesar L. Escalante; Ashley C. Lovell
A conceptual model based on opportunity cost and expected utility principles establishes linkages between the likelihood of prevented planting claims in crop insurance and existing share leasing arrangements/internal farm business structures. Results of heteroskedastic probit estimation procedures indicate that simpler internal business structures and more dominant farmer-tenant leasing position can increase the probability of submitting a prevented planting claim.
Applied Economics | 2009
Roderick M. Rejesus; Bruce J. Sherrick; Gary Schnitkey; Cesar L. Escalante
This article examines factors affecting producers’ perceptions towards the relative importance of government support programmes in agriculture. Specific attention is placed on determining the effect of crop insurance usage on farmers’ views about the importance of government programme payments. Results from a semi-parametric ordered response model shows that producers who use yield- or revenue-based crop insurance products also tend to view government programmes with higher importance, suggesting that crop insurance and direct government support programmes tend to be complements rather than substitutes.