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The liquidity positions of U.S. corn farms over the period 2002–2013 is examined using Agricultural Resource Management Survey (ARMS) data and calculating the average annual working capital to gross revenue (WC/GR) ratio for farms within the 25th per-centile, median, and 75th percentile. The relationship between liquidity and land own-ership, farm size, and the composition and level of short- term farm asset and debts by category are compared across farms within the 25th, 25th–75th, and 75th WC/GR ratio percentile. We find that, on average, farms in the 75th WC/GR ratio percentile owned a greater portion of their operated acres and maintained both a lower and more con-sistent percentage of assets in crop inventories and a larger and variable percentage of short- term liabilities in accounts payable and term debt compared to farms in the 25th percentile. Rapid declines in farm liquidity levels and the percentage of short- term assets in crop inventories for farms in the 25th WC/GR ratio percentile between 2002 and 2013 highlights the importance of having other means to manage short- term debt obligations rather than selling crop inventories in times of falling output prices. The rise in short- term liabilities and corresponding decreases in short- term debt levels for farms within the 25th–75th and 75th WC/GR ratios during 2008–2013 indicates the importance of being able to pay off farm debt during periods of higher agricultural profits. The corre-sponding rise in short- term debt for farms in the 25th percentile during this same time period should be a cause for concern going forward and, with the other results of this study, highlights the need to monitor both overall farm liquidity ratios and the allocation of short- term assets and debts within categories when evaluating and seeking to improve farm liquidity levels and financial performance.


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