Farmland is Iowa’s most precious natural resource. Not only does it represent the basis for our agricultural production, farmland represents over $100 billion dollars of wealth in the state of Iowa.
There is a major trend underway in Iowa farmland ownership in the amount of land owned by people over 65 years of age.
Iowa State University conducts a survey of Iowa farmland ownership every five years. The most recent survey was conducted in 2012.
One of the major changes was the increasing age of the farmland owner. In 2012, over half the farmland (56 percent) in Iowa was owned by people over the age of 65. This was only 1 percent higher than in 2007. From 1982 to 1992, the percentage of land owned by people over 65 was just 29 percent.
A second major trend that had been observed was the increasing amount of land that is cash rented. Farmland that was leased was equally divided between cash rent and crop share leases in 1982. By 2012, 77 percent of the leased farmland was under a cash rent arrangement. This is the same amount of cash rented land that was observed in the 2007 survey.
The trend away from crop share to cash rent agreements is due to two primary reasons. As landlords become more dispersed, payment in grain becomes much more of a burden, especially for those unfamiliar with agricultural markets. A second reason is the increase in the number of landlords a tenant has today. The more landlords there are, the more burdensome it becomes to keep grain differentiated by owner.
There appears to be two driving forces towards more cash rent. One is the changing nature of land ownership. An out of state owner is not likely to be interested in being paid a bushel of corn in Iowa. Similarly the nature of farming is also leading the increase in cash renting. As one person has more landlords it is easier to keep track of a cash rent as opposed to shares. Cash renting land has become so popular that there are actually more acres cash rented than there are farmed by the owner.
Three-fourths of Iowa’s farmland is held without debt. Willing the land to family increased as the most popular method of transferring the land, accounting for almost half, 53 percent, of the farmland. The next most popular method for transferring
farmland is putting it into a trust.
Current Farming Opportunities through the Beginning Farmer Center, Iowa State University
The full report, Farmland Ownership and Tenure in Iowa, 2012, is available from Iowa State University Extension.