Clearance Sales in the Farmland Market?

The ultimate loss financial institutions bear for foreclosed loans is determined by their success in liquidating their acquired property portfolios. This study examines the price received for land sold by private individuals and financial institutions from 1977 through 1990. After adjusting for qual...

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Bibliographic Details
Published in:Journal of agricultural and resource economics 1993-12, Vol.18 (2), p.160-174
Main Authors: Featherstone, Allen M., Schurle, Bryan W., Duncan, Steven S., Postier, Kevin D.
Format: Article
Language:English
Subjects:
acquired property
Agricultural land
Agricultural management
Commercial banks
Discounts
dynamic pricing theory
Farming
Farmlands
Farms
Financial institutions
Land economics
Private land
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Summary:The ultimate loss financial institutions bear for foreclosed loans is determined by their success in liquidating their acquired property portfolios. This study examines the price received for land sold by private individuals and financial institutions from 1977 through 1990. After adjusting for quality differences, financial institutions received on average 9.2% less than private individuals. Further analysis reveals that commercial banks received a discount of 5.8%, the Farm Credit System (FCS) a 9.2% discount, and Farmers Home Administration (FmHA) a 14.7% discount. For this sample of 13,375 Kansas sales, it is estimated that the sum of the transfers from financial institutions to land buyers amounted to $9.2 million.
ISSN:1068-5502
2327-8285
DOI:10.22004/ag.econ.30970