In an annual survey, Iowa State University economists found the age of farmland owners continues to climb, and with that the number of acres owned debt-free also has increased.
About a third of the land is owned by people who are at least 75 years old and 82 percent of land is owned debt-free. Typically, the older the landowner, the lower the debt load.
The survey asked a variety of questions including how many people an individual shares ownership with, which of several hypothetical incentives might get them to add more conservation strategies, and what is their primary reason for owning the land.
Only about half the landowners (49 percent) said they rely on it for current income, and the second-highest ranked reason for ownership was “family or sentimental reasons.”
Wendong Zhang, an assistant professor and extension economist at Iowa State, said many owners have tenants working at least some of their acres.
“One of the numbers I want you to remember is 53 percent of all land in Iowa [is] rented out to others,” he said.
Often renters are family members and landlord-tenant relationships can endure for decades, Zhang added.
Alejandro Plastina, another Iowa State economist involved in the study, said young landowners are more likely to have mortages, but the amount of debt-free ownership is important for the agricultural economy.
“That has a huge impact on the resilience of the ag sector for those that operate their own land,” Plastina said.
That’s particularly important because commodity prices have been falling for several years, sparking talk about the likelihood of another farm crisis. The lack of debt, along with lower interest rates than during the 1980s, are two reasons observers often cite to suggest many farmers will be able to withstand the current slump.
The new questions this year about which of several kinds of incentives might encourage landowners to implement cover crops found the most popular of three options was to help a renter pay for a portion of them. Twenty percent of landowners said they’d likely be willing to do that.