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Corn+Soybean Digest

More Seniors Own farmland, According to Iowa Study

How ya gonna keep 'em down on the farm after they've seen “Paree” was the next word in that legendary post-World War I ditty. Nearly a century later, the pizzazz of Paree can be replaced by any number of reasons older teens and twenty-somethings settle in the city. The work's too hard, doesn't pay enough, too dirty, too risky, too stressed about the weather and hundreds of other reasons keep 'em off the combine.

In general, farmland owners have gotten older and older since the Great Depression. In Iowa, for example, people 65 and over own 55% of the farmland, says Mike Duffy, Iowa State University economics professor.

“Those were the numbers we found in our 2007 survey and we figure they're close to that now,” says Duffy. “People between 65 and 74 owned 27% of the farmland, and people over 75 years of age owned 28% of Iowa's farmland. In 1982 these same age categories had a combined ownership of just 29%.

“This has been an upward trend for as far back as I can find data. People are living longer. Agriculture has changed and people are staying involved longer,” he says.

Duffy adds that more than 50% of the land owned by single women is owned by someone over 75 years old (see chart), compared to 30% of the land owned by single men being owned by someone over 75 years of age.

Gary Schnitkey, University of Illinois agricultural economist, agrees that land transfer is delayed because people live longer. “Much of the farmland that changes hands occurs at the death of the owner,”he says. “As individuals live longer, land transfer is deferred.”

He notes that even though the recession has slowed the recent increase in land values, it hasn't affected tenure much.

DUFFY SAYS THE economic recession has probably impacted some of the buyers. “We have seen less outside, investor-type buyers as the economy has soured,” he says, “but the recession has not really impacted the overall trend towards older owners.”

He doesn't believe the estate tax issue has had much of an impact on older landowners. “It's been more of a ‘red herring,’” he says, but could impact ownership down the road.

Schnitkey says the likelihood of higher estate taxes will impact land ownership management. “This will put a premium on estate planning, and I don't know how that will impact how individuals will transfer land from one generation to the next,” he says.

He says the amount of Iowa farm-land owned by those who actually live on the farm decreased significantly from 57% to 47% from 1982 to 2002 and has likely continued.

About 75% of Iowa's farmland is owned without debt, up from 62% of the farmland that was debt free in 1982, says Duffy.

“Another trend likely associated with the aging of farmland owners is the increase in the size of tracts of farmland owned,” Duffy points out. “In 1982, 40% of Iowa's farmland was owned by people who had 80 acres or less. In 2002 (and beyond), land holdings in the 80-acres-or-less category have dropped significantly to just 13% (or lower).”

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