Market News & Headlines >> Survey: More Farmland Going into Trusts
Agricultural producers rented and farmed 353.8 million acres of farmland, 80% of which were owned by non-farming landlords, according to the results of the USDA’s 2014 Tenure, Ownership, and Transition of Agricultural Land (TOTAL) survey.
Rented farmland acres, combined with buildings on this land, are valued at more than $1.1 trillion, according to the survey results, released on Monday by USDA’s National Agricultural Statistics Service (NASS). TOTAL counted approximately 2.1 million landlords with various ownership arrangements. In 2014, all of the landlords combined received $31.2 billion in rental income while incurring $9.2 billion in total expenses.
A tenth of the 911 million farmland acres in the 48 contiguous U.S. states, or about 91.5 million acres, are slated for ownership transfer in the next five years, not including farmland that is in or is expected to be put into wills. Landlords expect to keep or put nearly 48% of these acres in trusts. Only 21 million acres of land are expected to be sold to a non-relative, while 26 million acres are expected to be sold to a relative or given as a gift.
This means that only a small percentage of farmland will be available for new entrants into the farming sector. “Farmland has always been a valuable resource, but what we see in the most recent TOTAL results is the emergence of farmland as a future investment,” said Joseph T. Reilly, NASS Administrator. “More families are creating trust ownerships to make sure land remains in their family for farming or as an investment.”
In addition to looking at farmland, TOTAL also provides a glimpse into demographic information for 1.4 million principal landlords. According to the findings, the average age of these landlords is 66.5 years old, exceeding that of the average farmer, who is 58.3 years old, according to the most recent Census of Agriculture. Only 18% of all principal landlords were under 55 years old and nearly 45% have never farmed.
TOTAL, which NASS conducted in cooperation with USDA’s Economic Research Service (ERS), surveyed farmland ownership in 48 contiguous states. It is the only NASS survey that collects agricultural landlord data. The survey is expected to greatly contribute to research and policy analysis.