High land values pricing new farmers out of market
Farmland values are up 35% in the Grain Belt and an ag real estate expert says that’s pricing young and new farmers out of the market.
Randy Dickhut with Farmers National Company says it’s historically been a problem for beginning farmers to buy their own land if they don’t have connections through family, neighbors or a retired farmer, “There used to be a saying that you needed to own two acres to pay for the acre you buy. Well, that’s probably even higher now with some of these land prices.” He says high land prices are very similar to what’s going on in the housing market, where starter home prices are out of reach for many young people.
Because land is higher, so are cash rents, but Dickhut says there are ways to try and get land, including beginning farmer loans through USDA, and entering lease-to-own partnerships, “A lot of different ways but still renting to get started, some way. If you can get a crop share or other type of lease helps that young farmer build their base to build into the future.”
Dickhut says he entered into an arrangement when he got into farming – in western Illinois – in the 1970s and was the owner of part of that land 20 years later before he sold to his brother. That farmland is still in his family.