Agricultural land in Nebraska covers about 45.2 million acres across farms and ranches in the state. Major land uses on these operations include irrigated and dryland cropland, grazing and hay land.

Farmers and ranchers own almost 56%, or 25.3 million acres, across the state. Absentee landowners own the remaining 44%, or 19.9 million acres. These acres are typically leased out by the absentee landowners referred to as landlords.

Operator landlords account for 9% of leased acres, and non-operator landlords the other 35% of acreage rented out in Nebraska. Operator landlords may materially participate in lease agreements such as crop shares. Non-operator landlords include those who cash-rent their land to operators.

Regions vary

The amount of farmland rented out across Nebraska varies from one county to another. Counties heavily engaged in row crop or small grain production tend to have a higher proportion of leased farmland. Areas in Nebraska, such as the eastern third and portions of the southern corridor of the state, have a higher percentage of leased farmland.

Major ranching areas in the state, such as the Sandhills — along with parts of the western, northern and central regions — tend to have a lower percent of leased farmland.

Neighboring states, along with those in the Corn Belt, show similar trends to Nebraska with the proportion of farmland leased to agricultural operators. In the U.S., about 67% of landowners reside within 50 miles or less of their farmland, and 87% live within a distance of 200 miles or less from their properties. The majority tend to live in or near the agricultural state where the land may be located.

Live close by

According to a survey conducted by USDA's National Agricultural Statistics Service and analyzed by the Economic Research Service, 50% of non-operator landlords for Nebraska lived within about 13 miles of their property, and 75% resided within no more than about 100 miles.

Many of these owners may be retired farmers and ranchers or decedents from former operations. The farmland heirs may live in neighboring rural areas or large cities within driving distance of the property. These absentee owners may still have an understanding of agricultural considerations for the properties and challenges faced by the current operators.

Implications

Changing demographics of agricultural land ownership in the future may further fractionalize the number of owners. Also, future absentee owners may become more removed from the area or state in which the farmland may be held.

Farmers or ranchers renting these properties face the challenges of keeping absentee landowners aware of current policies or production factors affecting their farmland. Designing equitable lease provisions should take into account the forces surrounding agricultural risk in crop or cattle production and uncertainty in commodity prices when renting farmland.

Jansen is a Nebraska Extension educator and ag systems economist. Stokes is the Hanson-Clegg-Allen endowed chair, ag banking and finance, in the UNL department of agricultural economics.

Source: Nebraska Extension Farm and Ranch Management, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.