Land Ownership Statistics in Iowa
Check out these sobering facts compiled by Hannah Lewis, Jan Flora, Andy Larson, John Baker, and Lynn Fallon.
INCREASING AGE OF LANDOWNER
· In 2007, more than half the farmland (55%) in Iowa was owned by people over the age of 65 (compared t o 30% in 1982) (Duffy 2008)
· The increasing age structure of farmland owners show no sign of abating and continues to move toward an older population of landholders (Duffy 2008)
· The increase in the average age of farmers is a result of inadequate incentives to encourage young farmers to enter into the profession and reluctance on the part of existing farmers to retire (Baker 2008)
INCREASING ABSENTEE OWNERSHIP
· 21% of Iowa farmland is owned by those who live out of state either full- or part-time (Duffy 2008)
◦ an estimated that $523 million of land rents left the state in 2009 (Arbuckle 2010)
· Absentee landownership is likely to increase (Arbuckle 2010)
· Landlord-tenant relationships are stable, but deteriorate with distance (Arbuckle 2010)
· Landlord stewardship ethics are strong, but decline with distance (Arbuckle 2010)
INCREASING NON-FARMER OWNERSHIP
· Sixty percent of Iowa’s farmland in 2007 was owned by people not currently farming (compared to 55% not currently farming in 2002) (Duffy 2008)
◦ Widowed persons own 19% of the land
◦ Investor ownership is on the rise
◦ Trusts are being used increasingly as a mechanism for land transfer, encouraging non-farming landownership
◦ 26% of land is owned by those who have never farmed
INCREASING SIZE OF LANDHOLDINGS
· The percent of land owned in less than 80 acre blocks has decreased from 40% of the land in 1982 to 11% of the land in 2007 (Duffy 2009)
· During the past 55 years, the number of Iowa farms has decreased from 206,000 to 89,000 (Baker 2008)
INCREASING AMOUNT OF LAND IN CASH RENT
· In 2007, more farmland in Iowa was under a cash rental arrangement than was owner-operated (46 versus 40 percent, respectively) (Duffy 2008).
◦ Of rented land, 77% was under a cash arrangement, with the remaining amount in crop share leases (compared to 50% under cash rent in 1982). Women landowners are somewhat more likely to have a crop-share arrangement than are their male counterparts. Crop-share relationships last longer than cash-rent arrangements (Duffy 2008).
· Younger farmers tend to be much more dependent on rented land (although smaller farms are less dependent on rented land) (Arbuckle 2010).
COMMON METHODS OF LAND TRANSFER
· Ownership of most land is obtained through purchase (73%). The remainder is acquired via inheritance (23%) or as a gift (3%). Gifting is gaining in popularity (presumably at the expense of inheritance). Trusts are also being used increasingly (Duffy 2008).
DIFFICULTY OF TRANSFERING TO A SUCCESSOR
· Only 27% of farmers have identified their successor (Baker 2008)
▪ farms with gross sales less than $250,000 had identified successors fewer than 25% of the time (Baker 2008)
· Often the older generation fails to fully train their successor on intricacies of running a farm business (Baker 2008)
▪ they hold onto the decision-making power their entire lifetime, only relinquishing that power upon death
RELUCTANCE TO LEAVE FARMING AT RETIREMENT AGE
· The choice to semi-retire is the most popular choice of respondents of this survey (Baker 2008)
▪ part of the reason so few farmers plan to fully retire is the need for income throughout their retirement years
· Fifty-five percent indicated they would not be moving from their current home
▪ that means the successor must live somewhere other than the base of operations
· The complexity of farm transfers is due to three conflicting objectives: (Baker 2008)
▪ maintaining a viable farm business for subsequent generations
▪ fair and equal treatment of family members
▪ retirement provision of the current operator
· A large majority (80%) of current farmers favor programs for new/beginning farmers (IFRLP), such as expansion of loan and beginning farmer tax credit programs, mentoring programs that, outreach programs that link absentee landowners with beginning farmers, succession planning assistance development of markets for alternative crops.
Arbuckle, J. 2010. Rented Land in Iowa: Social and Environmental Dimensions. Iowa Farm and Rural Life Poll. Ames: Iowa State University Extension.
Baker, John. 2008. Iowa Farmers Business and Transfer Plans. Beginning Farmer Center. Iowa State University Extension.
Bregendahl, Corry, Carol R. Smith, Tanya Meyer-Dideriksen, Beth Grabau, Cornelia Flora. 2007. Women Land and Legacy: Results from the Listening Sessions. North Central Regional Center for Rural Development.
Burke, Sandra Charvat and Mark A. Edelman “Wealth Transfer and Projected Wealth Transfer in Iowa Counties,” Community Vitality Center, June 3, 2004.
Duffy, Michael. 2008. Farmland Ownership and Tenure in Iowa 2007. Ames: Iowa State University Extension.