The average age of a grandparent is around 64. The average age of a farmer is 57. Statistics show that farmers are getting older and older.
Farming is a necessity to the world. Without it there wouldn’t be any food or clothing. The quote, “Being patient is key and let time do the work,” is something old and wise farmers have figured out to be successful. Those wise farmers’ land is becoming more valuable today than it ever has in the past, and profits the last couple of years have been as high as ever.
As the age 57 has shown, the farmers of today will soon have to retire. If good times continue, will they give up? Or if hard times return, who can afford to replace them?
The transition of money in farming from the old to the new will make history. We have been lucky to experience the prosperous times of agriculture, but what will come tomorrow? Farming has had its fun and good times, what comes tomorrow will be the deciding factor in the future of agriculture and the traditions of farming; will we have an agriculture hangover?
Back in the day of our own grandparents, it was a dream and obligation to help work on the farm. After education, young boys would return to the family farm. In 1910 there were about 6 million farmers of all ages. In 2007, there were only 2 million.
As said before, the average age of a farmer today has crept up to 57. It is said that 1/4 of all farmers are expected to retire in the next 20 years. Over their roughly 45-year career, their land and equipment has become more valuable and worth much more.
Through the years, not as many people want to come back and take over the family farm. The history of farming set us up for promising years, but it might backfire. How can fewer young farmers in the early part of their career afford to take over for so many which have built up so much?
There are many obstacles to face when starting to farm. One of the biggest problems is the lack of capital or the ability to go and buy the things you need to put a crop in the ground or to get use of equipment.
Beginning farmers are faced with farmland that is priced higher than they can afford so lenders might have to take a risk, especially because of greater lending restrictions on banks due to the housing collapse in the last 10 years. This basically comes down to the only people that can borrow money are the people that have money. The Farm Service Agency (FSA) makes operating loans up to $300,000. Unfortunately, $300,000 does not come close to the purchase of a farm. FSA agents, also, require that farmers have at least 3 years of experience but less than 10 years of experience. Many farmland owners are not farm operators. These absentee landowners own about 40% of our nation’s farmland. It is from these owners that many young farmers are likely to rent.
Going forward, how do we transition these farmers from renters to owners?
“A cow can pay for the cow, the equipment, or the land. But the cow cannot pay for all three at once.”
That small phrase simply states the reality of beginning farmers. Beginning and young farmers can be energetic and dedicated but that will not help their financial state. It is estimated by the Wisconsin Department of Agriculture that by year 2030, 400 million acres, or 70%, of the nation’s private farm and ranch lands will change hands.
For each farmer under the age 35 there are 6 over the age 65. Young farmers must either work for or with someone else, or rent land because farmland is becoming more and more concentrated in the hands of older farmers. Land prices are so high that large farms are getting larger and non-ag investors are pushing values higher.
This leads to the question, “Will young farmers grow and prosper at a rapid enough pace to absorb the current wealth in agriculture, or will the wealth of agriculture decrease because of not enough being able to assume the positions?”
In other words,
“Will the party continue, or will we have an agricultural hangover?”
Will the agricultural hangover take place in front of our very eyes? With the average age of a farmer being as old as the average age of a grandparent, agriculture will have to change hands. The transition of money in farming from the old to the new will make history. The timeline of farming and agriculture through the years will hopefully stay on the right route for the future.
Farming has had its fun and good times; what comes tomorrow will be the deciding factor in the future of agriculture and the traditions of farming.
Want to learn more about the demographics of agriculture? Visit these websites to learn more about:
Farm demographics:
https://www.agcensus.usda.gov/Publications/2012/On...
Beginning farmers:
https://www.agcensus.usda.gov/Publications/2012/On...
Young farmers and their struggles:
