Consider the millennial generation. Today, they’re roughly 26 to 41 years old. In the world of agriculture, it’s the generation hungry to take the mantle of their family operations or forge new ones. They’re also arguably the most tech-savvy generation in the workforce, ready to embrace precision ag, drones and data capture more swiftly than ever.
They’re also getting priced out of multiple markets — from farmland to labor to top-end equipment.
Only 8% of farmers 34 and younger are considered “full owner” operators, according to recent USDA data. The remaining 92% are part owners or tenants.
At the other end of the spectrum, 43% of farmers 65 and older are full-owner operators.
Some discrepancy is to be expected — older farmers are presented with more opportunities as the years roll by.
Also, the average farmer’s age is 58 years old, per the latest census data. But with red-hot farmland prices, it’s getting harder and harder for young farmers to establish their own farming and ranching businesses.
“Farmland prices to-date have been climbing between 6% and 12% on an annualized rate,” notes Curt Covington, senior director of partner relations at AgAmerica. “To me, it just points out the challenge for young and beginning small farmers to get into the business with some kind of help.”
Some millennials have an edge, Covington adds. They have parents who are willing to sell some land at a discounted price to help them get started until they are able to secure conventional financing.
“The biggest challenge is it’s hard to get conventional financing if you don’t have a decent balance sheet that suggests you’re able to carry the debt,” he says. “A lot of people ultimately get stuck in rent arrangements while they’re trying to build a little bit of equity and cash.”
To that end, AgAmerica is putting together a financing program that will make land ownership more accessible to beginning farmers by removing the common barriers created by traditional financing. Its goal is to help keep as much farmland as possible in the hands of actual farmers.
“We need somebody to come in and fill the gap,” Covington says. “Our motive is we want to see young, and beginning and small farmers have a chance to flourish in this industry. That’s becoming increasingly difficult without some arrangements that might be just a little out of the ordinary.”
This “young farmer paradox” is not going away anytime soon, and for obvious reasons, Covington concludes.
“You’ve probably already heard this a thousand times, but they’re not making any more farmland,” he says.