U.S. Land Has Slow Turnover Rate, USDA Says
They aren’t making land—nor is anyone selling much of it. Just over 2% (or 21 million acres) of the 911 million acres of farmland in the contiguous United States is expected to be sold in an arm’s-length transaction during the five years ending in 2019. In a research bulletin, USDA says the slow turnover rate suggests “the supply of land available for purchase may not vary much over time.”
USDA looked at land ownership because of the prominent role it plays in farm finances – 80% of assets – and questions about how the aging U.S. farm population will make way for young and beginning farmers. “Lack of access to land is often cited as a significant barrier to farmers seeking to expand their operations,” say USDA economists. Land values are down by 1% nationwide this year, the first decline since 2009.
Land changes hands on a much broader basis than just land auctions or advertisements of land for sale. Some 93 million acres, or 10% of U.S. farmland, is expected to change owners in a five-year period. In a survey, owners told USDA that 56 million acres would move through wills, gifts, or trusts; some 13 million acres would be sold among relatives. Trusts are an increasingly common method for transferring ownership of land.
Of all U.S. farmland, 60% is owner-operated and 39% is rented. Rental activity is highest in the cash grain regions such as the Midwest and the Plains, and particularly in Iowa and Illinois, says USDA.