Let’s not forget non-operating farmland owners

June 22, 2023

Jason Russell was fortunate. When he started farming 20 years ago, he did so in partnership with his brother. The two pooled their resources and leased land from extended family members who welcomed the younger generation back to the family farm in Linn County, Iowa.

Two years in, the family started talking succession planning. The elder family members were willing to sell the land to the brothers at market value, and they drew up a 10-year plan to make it happen. Russell and his brother went to the bank for loans and bought the land piece by piece, building their own individual operations.

“Land ownership is difficult to get into,” Russell says. “We were very fortunate that way. If you’re not going to [work with family to purchase land over time], you’ve got to just save money like crazy and work hard. That’s the only way you’re going to get there.”

Today, Russell and his wife, Sarah, with their three children, custom feed hogs; raise direct-to-market beef and lamb; and grow corn, soybeans, hay, straw for highway projects, and cover crop seed on about 250 acres purchased from Russell’s family. They are also continuing Sarah’s family’s legacy with the purchase of 40 acres of woodland from her parents.

A trend toward leased farmland

While the Russells own the land they farm today, they have navigated cash-rent and share-crop leases. They know the challenges, and the advantages, of operating land owned by someone else. It’s a situation many Iowa farmers find themselves in, especially as the average age of farmland owners continues to rise. The 2022 Iowa Farmland Ownership and Tenure survey, released this month, found that two-thirds of farmland in Iowa is owned by people at least 65 years old, with 37% owned by people 75 and up. More than half—58%—of farmland was leased, or operated by someone other than the landowner. That’s up from 53%, or about 1 million acres, since 2017.

Several scenarios are playing out in Iowa that lend themselves to the trend toward leased land:

  • There are older, retired farmers and/or their spouses holding onto the land with or without a succession plan.
  • There are people who have inherited land but don’t live nearby or don’t desire to farm it themselves.
  • There are also people who have purchased land as a relatively safe, long-term investment. Families go in together to buy land, which they lease to one or two family members or neighbors. Companies exist to buy land and sell shares in the corporation, making anyone who is a shareholder an invested landowner.

About 37% of Iowa farmland is primarily owned for family or sentimental reasons, according to the report. And about 20% is owned by someone who is not an Iowa resident.

“Farmers that run land aren’t necessarily at arm’s length with their landlord,” Russell says.

The trouble with renting

This can pose challenges—especially for farmers interested in adopting innovative, conservation-minded practices or investing in infrastructure that would improve operational sustainability long-term.

Russell uses cover crops and is continually experimenting with regenerative practices. Last week, he shared his relay intercropping experiences with other farmers during an educational seminar. He follows corn with cereal rye planted in the fall, which by spring has sprouted and “looks like a lawn.” Into that, he plants soybeans. He harvests the rye in July, when the soybeans are young. He is currently experimenting with the practice on only 30 acres but is happy with the results thus far. In 2021, his relay-cropped soybeans yielded 87% of what his non-relay-cropped soybeans yielded. When he considers the added value of harvesting the rye crop, reductions in herbicide use and the soil health benefits, he’s pleased with the system.

Russell was able to do some experimenting on the land before owning it, but, for most, “it’s tough to do that,” he says.

Some landlords may see innovation as an unnecessary financial risk that would hinder the farmer’s ability to pay rent, he explains. Landlords may also have concerns that new practices would harm the land or create a messy look when they pride themselves on “clean,” weed-free fields.

“But I do know a handful of landowners that actually seek out tenants that like to do these things,” Russell adds. “They’re great people, and we need more of them.”

Communication is key when operating land that is not your own, Russell says. He suggests farmers keep landowners informed with pictures, videos and an open dialogue.

“Take them to the field and show them what you’re doing and why you’re doing it,” Russell says. “Show them your financial situation. There’s a great deal of secrecy when it comes to that, and it can be problematic. A lot of times, the landowner thinks they’re not getting treated fairly.”

Non-operating farmland owners must be considered

Solutions from the Land believes the whole world will benefit when farmers are at the center of discussion and decision-making addressing global needs, like climate action. As we advocate for farmers and all the good things they can and are doing on the land, let’s not forget one of their most fundamental needs: access to land.

If farmers are to get climate-smart agricultural practices on the ground, they need the support of landowners, especially in places like Iowa where so many farmland owners are not currently operators themselves.

Landowners need to understand the value of climate-smart practices for the long-term value of their land and legacy. They need incentives and opportunities that enable them to look positively at innovation and to partner with conservation-minded farmers. They need to be willing to work with farmers and come to the table with open minds.

We cannot lose sight of the complexity of agriculture. This extends beyond the biological and climatic complexities of working on the land. There are social aspects—the culture of agriculture—that must be understood and considered when developing educational outreach and policy.

Iowa in action

We encourage you to check out what Iowa Smart Agriculture is doing, as they bring a wide variety of agricultural perspectives together in their state. They are learning from each other, building connections, and move forward together. Find IASA’s vision for the future in the “Iowa Smart Agriculture: Circles of Life” report.

If you’re interested in learning more about the landscape of farmland ownership in Iowa, see the latest survey from Iowa State: “Iowa Farmland Ownership and Tenure Survey 1982-2022: A Forty-Year Perspective.”

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