Measuring The Effect Of Capital Structure And Seasonality On Expected Returns And Risk: The Fresh Market Vegetable Case

Autor: J. W. Prevatt, P. J. Rathwell, Larry L. Bauer, E. H. Kaiser
Rok vydání: 1992
Předmět:
Zdroj: Journal of Agricultural and Applied Economics. 24:171-178
ISSN: 2056-7405
1074-0708
DOI: 10.1017/s0081305200026091
Popis: fered from record acreage increases and continued The effect of capital structure and seasonality of excess supplies. However, while fresh vegetable fresh market vegetables was examined via the Target acreage has remained somewhat steady, total proMOTAD model. The level of capital indebtedness duction has increased. Readily adoptable technoand the selection of either a fall or spring season logical production advances during the last two resulted in significantly different levels of enterprise decades increased vegetable yields per acre that remixes, expected returns, risk magnitudes, rtes of sulted in the increased supply of vegetables. change of risk magnitudes, and operating capital Unfortunately, the economic conditions of many requirements. The fall season demonstrated larger other agricultural enterprises have not been favorinitial levels of risk and larger increases in the level ableduring most of the 1980s. Excess supplies, of risk due to increases in indebtedness. The spring inflation, and diminished export markets have season showed larger increases in risk between the placed severe financial hardships on many agriculminimum risk point and the maximum expected tural producers. These conditions have spurred a return point (linear programming solution) on the great deal of interest in alternative agricultural enterrisk-efficient frontier. Operating capital require- prises, such as fresh vegetables. Numerous scientific ments were substantially higher for the fall season research and trade publications consider fresh vegethan for the spring season. The operating capital table enterprises to be "alternative enterprises" that requirements of the spring season were significantly may have profit potential (Authur; Babb; Belmont; affected by the level of indebtedness and the magni- Colette; Estes; McGill; Rathwell; Wolfshohl). tude of risk selected by the grower, while the larger As a result of the recent economic hardships enoperating capital requirements of the fall season countered by numerous farmers engaged in other, were only marginally affected.
Databáze: OpenAIRE
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