OMAHA (DTN) -- A full 84% of Iowa farm ground is owned debt-free, and increasingly owned by baby boomers, many of whom are non-farmers who like fixed cash-rent contracts and are highly unlikely to sell their ground to someone outside the family.
Those are a few takeaways from the Iowa Farmland and Ownership Tenure Survey, which took a 40-year look at Iowa land ownership from 1982 to 2022.
Prof. Wendong Zhang left most of his work at Iowa State University last July for a position at Cornell University's Dyson School of Applied Economics & Management. Zhang completed his ISU Extension work by releasing the survey results Thursday.
Zhang said the survey, conducted every five years, is a "one-of-its-kind survey in the nation." ISU started collecting information on farmland ownership in 1949. Iowa lawmakers passed a law in 1989 for ISU to conduct a survey every five years. The survey of 705 parcels of 40 acres each that have been tracked since 1988 is a "statistically representative of owners and farmland," Zhang said.
"It paints a much more accurate picture," Zhang said.
-- 58% of Iowa land is leased out. On that leased ground, 72% of the landowners receive a fixed cash rent. About 13% of rental acres have some type of contract with payment tied to yield or crop prices. Just 7% of the ground is tied to a crop-share arrangement. "There is growing popularity in cash rents for a fixed amount," Zhang said.
-- A full 84% of Iowa farmland is owned debt-free, compared to 62% in 1982. Just 14% of farmland is under a mortgage. A smaller mix is under contract. For landowners above age 65, more than 90% of land is debt-free. For 35 and younger, just 17% of the land they own is debt-free.
-- Sole ownership has dropped over 40 years from 80% to just over 50%. Another 36% of land is now in a trust or limited liability corporation (LLC). Parts of the state with higher land in trust or corporate ownership are in southwest Iowa, near Omaha, and central Iowa around Des Moines where more lawyers are available to do that kind of work.
-- Despite the growth of investors, existing farmers remain the largest buyers of land, at just under 70%. "The key, dominant story is local farmer buying local land," Zhang said. New farmers are buying less than 5% of land.
-- Changes over time: In 1982, 55% of ground was worked by owner-operators. That has fallen to 35%.
Two-thirds of Iowa grown is owned by people age 65 or older. People age 75 and older own 37% of farm ground.
Landowners age 65 and older lease out 76% of the total cash-rent acreage. Also, 79% of the leased acreage comes from landowners who do not farm.
-- 55% of all landowners do not farm, and half of those people have no farming background; 28% of the land is owned by full-time farmers, and another 17% is owned by part-time farmers who also hold another job.
-- Tenants and landlords stick together. A full 59% of all leases are at least 10 years or longer. Another 32% of leases fall in the 2-to-5-year range. "The average owner-tenant relationship is 11 years for all leased ground. A tenant will work with a landowner for a decade or lease," Zhang said.
-- 20% of Iowa farmland owners live outside of the state. Another 75% is owned by year-round residents.
-- Women overall own 46% of ground. Women over age 65 own one-third of all Iowa ground. Woman over age 80 own 13% of Iowa farmland.
SUCCESSION OR SELLING
"For about half the land in Iowa, the owner has the intention to will (the land) to family or give it as a gift to family," Zhang said.
-- 80% of owners have a potential successor for ownership, but just 58% have a successor for "management of the farm." Zhang said that disparity comes from having multiple sons, daughters or grandchildren who might get to own a piece of the farm, but not manage it.
-- 37% of landowners want to hold on to the land for family or sentimental reasons. Another 23% see it as an investment.
-- Another 26% of owners are looking at putting the land in trusts.
-- 8% of landowners expect to sell their farms to family members.
-- Just 4% of landowners are considering selling their land to a non-family member.
"There are just a small number of acres that could be sold to non-family members," Zhang said.
-- Of land that could be sold to family or non-family, only about 11% of it is expected to be available in the next five years.
Conservation questions are fairly new to the survey; however the survey found:
-- 30% of Iowa ground is no-till, (40% is in some form of reduced tillage). The no-till acreage is up about 3% since 2017. Southwest Iowa has 56% of acres in no-till, but that falls to 18% in north-central counties.
-- 7% of acreage has cover crops, up from 4% in 2017. Iowa has a goal to have 40% of acreage in cover crops to meet the nutrient reduction strategy.
-- 2% of owners are signed up for carbon credits and another 3% are considering. Still, 30% of landowners have never heard of carbon credits.
For more on the Iowa Farmland Survey, go to https://www.card.iastate.edu/…
Chris Clayton can be reached at Chris.Clayton@dtn.com
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