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Abstract

This study uses the sustainable growth rate model to investigate, measure, and analyze sustainable growth rates and trends for Illinois farmers. Results of farm-level econometric analyses indicate the relevance of the sustainable growth paradigm in explaining most farm financial decisions made each year. Grain farms have shown a greater tendency to balance growth through adjustments in production efficiencies while livestock farms rely more on financial leveraging strategies. In general, our results have shown that the farm sector has adapted to positive or negative sustainable growth challenges consistent with the Higgins' model and that, from an equilibrium point of view, countercyclical measures of the sustainable growth challenge indicate that there has been always a tendency towards balanced growth.

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