Why U.S. Farmland Now?

The Aging Farmer and Approaching Wave of Land Transfers

Over the next two decades, there is an enormous amount of land that will need to change hands outside the family for the first time in generations. There are several key forces driving this shift.   

1. The Greatest Wealth Transfer in History

As with most asset classes, the distribution of ownership of agricultural assets is highly skewed toward the baby boomer generation. Older farmers are far more likely to own their land than younger farmers. When combined with the holdings of non-operator landlords, half the farmland in the U.S. is owned by individuals who are at least 65 years old. Putting this into dollar terms, farmers and other individuals over 65 own about $1.7 trillion in farmland. 

34%

According to the most recent agricultural census, the median age of U.S. farm operators was nearly 60 years old, with roughly a third of all farmers being 65 or older. 

2. The Hollowing Out of Rural America

Growing up on a farm used to mean becoming a farmer, but the generations following baby boomers have increasingly chosen to move to an urban location to pursue a non-farm occupation. A not insignificant portion being encouraged to do so by their parents, as farming is a difficult occupation that requires a passion for a lifestyle that has been out of vogue for some time. This has led to a current environment where less than half of retirement-age farmers expect to pass down the family farm to a next-generation family member to own and operate. 

Bottom Line: Based on this information, the U.S. will likely see more than $1 trillion in land sales over the next two decades that will be accessible to non-relatives more than ever before.