Farmland ownership trends shifting
As farmland values have climbed over the last few years, it's caused a slowing in a couple of key trends in who owns that land, shifts that could ultimately affect land accessibility for young and beginning farmers, according to one Iowa land values expert.
Every five years, Iowa State University Extension farm management specialist Mike Duffy conducts a survey of farmland owners in his state. The survey has been conducted since the early 1980s, a time period that's seen some major ups and downs in the land market.
"The latest Iowa farmland ownership survey is compared to previous surveys dating back to 1982, during the time when farmland values first started collapsing after the boom of the 1970s," Duffy says, adding that the full results of the survey will be released later this fall. "Looking at the various surveys over the past 30 years shows some of the changes in farming technology, demographics, and other patterns. The 2012 survey also shows the impact of the current land boom on these trends."
The sharp climb in land values since the last land ownership survey conducted in 2007 -- a time when values in Iowa had more than doubled -- has caused a couple of shifts in ownership that could carry implications for young and beginning farmers in the coming years, provided values are sustained. First, who's owning the land? Last year, almost one third of Iowa farmland was in the hands of someone over the age of 75. That number has been ticking up since 1982, but just in the last five years since the sharp value climb, Duffy says there's been a noticeable change.
"The percent of land owned by people in this age category had been steadily increasing since 1982, when 12% of the land was owned by someone over 75 years old. The trend toward increasing age does appear to have been slowed by the boom," Duffy says. "There are younger owners, although they represent a small percentage of the acres. Over half, 56%, of the farmland in Iowa is owned by someone over the age of 65."
Absentee land ownership has also declined in the last few years since the runup in land values. In 2012, 21% of the farmland in Iowa was owned by an absentee owner. That's the same as in 2007, but up 15% from 1982. Duffy says the flattening of this number could also foreshadow a major trend shift.
"Another trend that seems to have slowed is the percent of land owned by people who don't live in Iowa full-time," he says. "It appears that the higher land values had an impact on the ownership by non-Iowans."
These trends are important for all parties involved in farmland ownership and management, but mostly for those on the opposite ends of the age spectrum, Duffy says. This makes it important for those parties to watch them closely and take them into account in land purchase and lease agreements down the road.
"Ownership of Iowa’s farmland and access to the use of the land is critical for the future of the State. The impact of the ownership on both beginning farmers and the retiring farmers will be crucial," Duffy says. "The current situation with respect to farmland ownership in Iowa is a good topic for discussion among landlords, family or heirs, and agribusiness professionals."