ISU study: majority of Iowa farmland to be handed down in families
An Iowa State study on farmland ownership says the average landowner is getting older and are becoming less likely to sell their land to non-family members.
The survey, mandated by the Iowa Legislature to be updated every five years, reported 60 percent of the state’s farmland is owned by people age 65 or older. Landowners age 75 and up own 35 percent of Iowa farmland and comprise 26 percent of the landowner population.
Those landowners are also increasingly not using their land as their main source of income. 49 percent of respondents said income was their main driver for owning land, down 7 percent from the last survey in 2012.
Instead, those farmers are mostly keeping the land for family or sentimental reasons. People keeping land for that reason increased from 22 percent in 2012 to 29 percent in this survey.
There was also a slight increase of the amount of farmland owned debt-free, from 78 percent in 2012 to 82 percent.
“Some of the farmers say, ‘I want to continue to own the land that my grandpa had or where my grandpa’s house used to be sitting on or some other reason,” said Wendong Zhang, an ISU economist and co-author of the study. “…This is concurrent with the continuing age of the landowner and the fact that a lot of people are owning the land debt-free, so they don’t necessarily need the land for current income.”
The majority of landowners in the study are planning to transfer their land to family members by gift, sale or will. Another large percentage plans to put their land in a trust.
ISU economist and study co-author Alejandro Plastina said that means farmers without personal relationships to landowners will have a harder time buying farmland.
“That means what’s left is a small portion of Iowa farmland that is expected to be transferred to non-family members,” he said. “That percentage is just 7 percent in 2017, and that will play a big role in the near future.”
The study was conducted in 2017 and is statistically representative of the state’s farmland trends.
According to the report, 47 percent of the state’s farmland is owner-controlled, while 53 percent is rented or leased.