Stopping by to have a simple cup of coffee with the landowner down the road could pay huge dividends in the very near future, says Iowa State University Economist Mike Duffy. The 2007 Farmland Ownership and Tenure in Iowa report, released in November, shows the average age of landowners in Iowa, as well as other demographics has changed dramatically in the five years since the last report was released, and tectonic land shifts could be on the horizon.
"We're really in unchartered territory here,” Duffy says. "What we have now is over half of the land owned by people over 65…55%, and an interesting thing is one in 10 acres in Iowa is owned by a single woman over the age of 75—it's interesting in terms of ownership changing hands and for young farmers, how are you going to acquire that asset.”
Conversely, less than three percent of the state's farm ground is owned by people 35 years and younger, compared to 11% in 1982 and seven percent in 1992.
"I think a lot of farmers are missing the boat by not stopping by and having a cup of coffee with a land owner from time to time.”
Duffy was able to travel throughout the state and he interviewed several people who have studied these issues since the World War II era. "I think it's going to be huge. We weren't anywhere near where we are now, except the number of tenant farmers who don't own any of the ground they farm. Most tenants do own a little bit. What we see more of is part owners where they own some and rent some.”
This will be largely driven by the amount of land going into trusts, he believes, and it's indicative of some land sales he's seeing nowadays.
"A big trend we're seeing is the multiple trust and land going into trusts in general. I saw a sale bill for an auction of 200 acres. There were four different trusts and an individual listed as the owners for 200 acres!
"That's got a lot of implications as we're looking ahead and these trusts are being pushed,” Duffy says. "I'm thinking, you know back in the 70s when we had a run up in value we had pushes to get everybody into corporations and I think maybe we're seeing some of those disadvantages. I think with these trusts, you're looking at a situation where you have four different trusts owning 200 acres, it can be a nightmare when you start to consider how it's all going to be handled and split up.”
"Overall, the majority is still going to be go into the family either through a will, sale or gift. But about 18% of the land is going to be going into a trust.”