A procedure for evaluating grain elevator bankruptcies

Wharton, Robert B.; Harper, Susan D.; Traylor, Harlon D.

doi:10.1002/1520-6297(198724)3:4<427::aid-agr2720030408>3.0.co;2-k

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“…Some measures of financial performance and current liquidity were also found to be significant indicators of failure. The research of Siebert (99) was the first to focus on the development of regional insolvency prediction models for agricultural businesses.4 He developed two "early warning" models for country grain 4Wharton et al (113) developed a linear discriminant function model based on 1980-1982 information obtained from seven bankrupt and twenty-two non-bankrupt Louisiana grain elevators. The results of this study will not be discussed in this review of literature because of its narrow geographic scope and use of extremely small samples.…”

Section: Although the Linear Discriminant Function Model Developed Bymentioning

confidence: 99%

Methods for assessing the likelihood of country grain elevator failure in the United States

McConnon¹,

James²

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CHAPTER I. INTRODUCTION Backround Country grain elevators serve an important role in American agriculture. They provide producers and owners of agricultural commodities with warehouse facilities where they can store their grain. Many elevators also act as grain merchandisers, buying and selling grain in the open market. In addition to these important functions, grain elevators often sell farm supplies and provide other farm related services to their customers. The principal function of most country grain elevators is grain warehousing (storage). A study conducted by the National Grain and Feed Association indicated that 10,000 grain elevators, storing over sixteen billion bushels of grain, provided grain warehousing. Most of these elevators stored farmer owned grain. However, 70 percent of them also stored grain that was either owned by the Commodity Credit Corporation (CCC) or pledged to them as collateral for loans. The U.S. Department of Agriculture and many grain-producing states administer programs designed to ensure that producers and the Commodity Credit Corporation have safe and sound facilities to store their products. Grain accounts for nearly 90 percent of the commodities covered by these programs. In general, these programs set financial, bonding, recordkeeping, and operational requirements that elevators storing agricultural commodities must meet. The U.S. Department of Agriculture, under the U.S. Warehouse Act, administers a voluntary licensing and examination program for warehouses storing agricultural commodities. The program applies only to those elevators who voluntarily apply for and are granted a federal warehouse license. By holding a federal license, elevators assure their customers that they meet federal requirements for sound warehousing practices. They can issue federal warehouse receipts for grain storage and their depositors can use these receipts as collateral for operating loans. The primary objectives of the program are: (1) to provide a safe place for storing agricultural commodities, (2) to assure the integrity of warehouse receipts as documents of title, and (3) to set and maintain a standard for sound warehouse operations. The Department's Agricultural Marketing Service (AMS) administers this program to ensure that federally licensed warehouses meet these obj ectives. The Department of Agriculture also sets requirements for and examines non-federally licensed contract warehouses storing commodities owned by the Commodity Credit Corporation or pledged to the CCC as loan collateral. These requirements are similar to those of federally licensed elevators except bonding is not required by the USDA unless elevator net worth falls below the required amount. The Agricultural Stablization and Conservation Service (ASCS) along with the Agricultural Marketing Service administer this program. Many states have elevator licensing and examination programs. Unlike federal programs which are voluntary and focus on grain Item Farm Nonfarm Total

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Section: Although the Linear Discriminant Function Model Developed Bymentioning

confidence: 99%

Methods for assessing the likelihood of country grain elevator failure in the United States

McConnon¹,

James²

View full text Add to dashboard Cite

show abstract

A procedure for evaluating grain elevator bankruptcies

Cited by 1 publication

References 15 publications

Methods for assessing the likelihood of country grain elevator failure in the United States

Methods for assessing the likelihood of country grain elevator failure in the United States

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