We are on the cusp of a major land transition. Not only will this change of hands transform the industry—it will affect every age demographic.
The average age of farmers is ticking up. In turn, the majority of farmland is owned or controlled by senior managers who, in the business world, are considered to be near retirement. Here are the facts:
- Farmers age 65 or older own or lease nearly 33% of all acres (320 million of 980 million total U.S. acres).
- Farmers age 54 and under own or lease a combined 36.5%.
- For farmer-owned acres, the 65-plus group controls just over 38%.
- Farmers ages 55 to 64 control the largest percentage of leased acres (31.5%).
These figures, provided by the 2012 USDA Census of Agriculture, capture the intensity of the coming transformation.
“The amount of resources controlled by these aging producers is substantial,” explains a report from agricultural economists David Widmar and Brent Gloy. “How these resources transition will have implications for nearly every agribusiness and farmer. While many factors will impact how the trend actually unfolds, the unprecedented concentration of older producers will likely drive a faster pace of farm size growth in the future.”
Transfers Present Challenges. The real sticking point? Transferring land is complicated. The majority of farmland controlled by owners over 65 has rapidly appreciated and could have huge estate-tax implications.
Whether you are a current or hopeful landowner, you’ll need sophisticated professional advice to help you identify your goals and then implement them via the proper tax and legal planning tools.
“Estate planning isn’t for someone older or someone richer; it’s for you,” says Polly Dobbs, an attorney and member of the Farm Journal Legacy Project Advisory Team. “If you want your farm to successfully transition from one generation to the next, you must do better than a vanilla will that says you want to leave everything equally to your children.”
Knowledge Is Power. We have a great lineup of events to help you in your succession planning journey. Attend the Legacy Conference in Indianapolis on Nov. 17 and 18. Dobbs and other experts will provide a deep dive on this complex issue. Learn more at farmjournallegacyproject.com.
Succession planning insight will also be featured at the 2015 Executive Women in Agriculture conference, which will be held Dec. 3-4 in Chicago, and Top Producer Seminar, which runs Jan. 27-29 also in Chicago. Find agendas at TopProducer-Online.com.