December 04, 2023

Many forces shaping farmland ownership patterns

OAK BROOK, Ill. — Several factors are impacting agricultural land ownership in the United States, including the transfer of farmland to the next generation.

“According to the 2017 Census of Agriculture, there are four times more senior farmers in this country than young farmers,” said David Haight, vice president for programs at the American Farmland Trust.

“Forty percent of those senior operators did not identify a young farmer being involved in the ownership or management of their farm” said Haight during the Ownership and Investment in U.S. Farmland virtual forum hosed by Farm Foundation.

“This is significant because farms at a time of transfer are vulnerable and for many families they are going to have to look outside of the family for the next generation,” he said.

Senior farmers and landowners own 370 million acres of agricultural land, Haight said.

“Those acres will be changing hands in the next 20 years,” he said.

One of the biggest barriers for beginning farmers is accessing land, Haight said.

“It is hard to identify land that is available, being able to afford the price of land or being able to have lease terms that offer the type of security a beginning farmer needs to be successful,” he said.

Last year, AFT released a report that projects about 18 million acres of agricultural land is going to be fragmented or developed by 2040.

“It is concentrated in states like Texas, North Carolina and Georgia,” Haight said. “This competition for land by other buyers is going to be a significant force shaping land ownership patterns in the future.”

Solar energy is also going to have an impact on farmland.

“The U.S. Department of Energy suggests if we’re going to decarbonize our electricity grid and energy supplies, it is going to require 8 to 10 million acres of solar energy built across the country,” Haight said.

“At AFT we talk about the importance of Smart Solar — prioritizing solar energy being built on land not well suited for farming,” he said.

“If it is built on land suitable for production, steps are taken to safeguard the soil and promote agrivoltaics where you co-locate solar energy production and agricultural production on the same property.”

Howard Halderman

“Forty percent of farm real estate is owned by people who don’t farm and those are the clients our companies service,” said Howard Halderman, president of Halderman Farm Management and Halderman Real Estate Services.

“We represent a lot of land owners and we have some institutional farmland owners and they are an important component to U.S. agriculture in terms of the capital stack in land ownership,” said Halderman during the forum.

For example, a farmer with a 5,000-acre operation might own 20% of that or 1,000 acres.

“In Indiana, 1,000 acres is $15 million so it’s tough to own all the land you may wish to farm,” Halderman said. “So, leasing land has been a method of acquiring additional assets.”

“There is $3.4 trillion in U.S. farm real estate and of that $1.9 trillion is cropland in non-prohibited states,” he said.

“Some states have some form of foreign ownership restriction and some are foreign to that state so about $700 billion of cropland is locked away in states prohibited to foreign ownership.”

There is about $1 trillion of water accessible cropland in the United States, Halderman said.

“Of the $1 trillion, only about $20 billion of farmland sells each year,” the company president said.

“Forty million acres of farmland is owned by foreign to the U.S. entities and that represents 3.1% of all farmland,” Halderman said. “Most of the foreign ownership is Western European, Australian and South American and the Chinese own 1% of the total foreign owned.”

“In my career of 35 years, we’ve never sold any farmland to a Chinese or Russian interest,” he said. “We have sold some to Western European and South American interests.”

Eloris Speight

The Socially Disadvantaged Farmers and Ranchers Policy Research Center was authorized in the 2014 farm bill and is located at Alcorn State University.

“The policy center provides a vehicle for minority farmers to be involved in policy construction, interpretation and implementation,” said Eloris Speight, director of the center that represents farmers from throughout the United States.

“Our mission is to conduct research, analyze policy and make recommendations seeking to achieve equitable and economic integration of USDA programs and policies for socially disadvantaged farmers, ranchers, communities and landowners,” said Speight during the forum.

In 1920, there were nearly 1 million black farmers in the United States, the director of the center said.

“Blacks made up 14% of the population and 14% of the farm population,” she said. “We focus on black farmers because now a century later there are fewer than 50,000 black farmers in the U.S. and they represent 1.4% of the 2.8 million farmers in the U.S.”

The black-owned farms that remain are smaller on average than other farms, Speight said.

“Without some intervention, black farmers will become extinct,” she said.

The Justice for Black Farmers Act is an attempt to create economic justice, Speight said, “by eliminating lingering federal discrimination by creating fair access to credit and federal programs to provide the tools to grow the dream into a reality.”

Strategic outreach is also a focus at the policy center.

“We facilitate education in farm management, farm bill policy development, financial planning and business planning,” Speight said.

Martha Blum

Martha Blum

Field Editor