Preliminary Results from 2017 Iowa Farmland Ownership and Tenure Survey

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1 Preliminary Results from 2017 Iowa Farmland Ownership and Tenure Survey Wendong Zhang Assistant Professor of Economics and Extension Economist 91 st Soil Management Land Valuation conference, May 16, 2018

2 A Quick Introduction: Dr. Wendong Zhang Grown up in a rural county in NE China Attended college in Shanghai and Hong Kong Ph.D. in Ag Econ in 2015 from Ohio State 2012 summer intern at USDA-ERS on farm economy and farmland values Research and extension interests: ISU Land Value Survey, 2017 Land Ownership Survey agriculture and the environment ISU China Ag center

3 Iowa Farmland Ownership and Tenure Survey - history The first and only consistent data collection of land ownership & tenure in the nation: 1949, 1958, 1970, 1976, 1982, 1992, 1997, 2002, 2007, 2012, and Statistically representative of all owners & all land in Iowa Widely used and best available information USDA data: AELOS 1999, TOTAL 2014

4 2017 Iowa Farmland Ownership and Tenure Survey Results very preliminary (Please do not quote or cite yet; suggestions welcome) Press conference: late June & early July Status: Data collection done (770 parcels, 534 respondents, response rate > 65%) Telephone survey conducted by ISU Center for Survey Statistics and Methodology the CoBank Fund for Excellence in Cooperative Economics

5 Percentage of Farmland Distribution of Iowa Farmland Acres by Land Ownership Type % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Sole owner Joint tenancy Partnership Tenancy in common Estates Trusts Corporations LLC Government/institution Source: 2017 Iowa Farmland Ownership & Tenure Survey

6 Partnership 3% Trusts 20% Estates 4% Corporations 10% LLC 5% Tenancy in common 8% Sole owner 22% Joint tenancy 28% 2017 Iowa Farmland Acres by Ownership Types

7 Percent of Land across Ownership and District 2017 Ownership Type NW NC NE WC C EC SW SC SE Sole owner (22%) 3% 2% 3% 4% 3% 3% 2% 1% 2% Joint tenancy (28%) Tenancy in common (8%) 3% 3% 5% 3% 3% 3% 2% 3% 3% 1% 1% 1% 1% 2% 1% <1% <1% <1% Partnership (3%) <1% <1% <1% <1% <1% <1% <1% 1% 1% Estates (4%) <1% 1% <1% 1% <1% <1% <1% 1% 0% Trusts (20%) 3% 3% 1% 4% 2% 2% 3% 2% 0% Corporations (10%) 2% 1% 1% 1% 2% 1% 1% 1% 1% LLC (5%) 1% 1% 1% 1% <1% 1% <1% <1% 1% % Land in District 13% 12% 12% 14% 13% 10% 9% 8% 8%

8 Percent of Land across Ownership by District 2017 Ownership Type NW NC NE WC C EC SW SC SE Sole owner (22%) 21% 20% 26% 26% 24% 25% 18% 18% 18% Joint tenancy (28%) Tenancy in common (8%) 23% 28% 40% 22% 23% 24% 24% 31% 36% 11% 4% 5% 8% 17% 11% <1% 5% 5% Partnership (3%) 1% <1% 4% <1% 4% <1% 5% 9% 10% Estates (4%) 2% 10% 1% 4% <1% 3% 5% 7% 5% Trusts (20%) 25% 25% 8% 28% 12% 22% 32% 19% 6% Corporations (10%) 13% 6% 11% 5% 17% 6% 15% 9% 11% LLC (5%) 4% 7% 5% 7% 4% 8% <1% 3% 10% % Land in District 13% 12% 12% 14% 13% 10% 9% 8% 8%

9 Percentage of Farmland Distribution of Iowa Farmland Acres by Tenure % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Owner-operated Cash rent lease Crop share lease Other type of lease Source: 2017 Iowa Farmland Ownership & Tenure Survey

10 Distribution of Iowa Leased Farmland by Types of Leases % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Cash rent lease Crop share lease Other type of lease Source: 2017 Farmland Ownership & Tenure Survey

11 Leasing Relationship by district 2017 NW NC NE WC C EC SW SC SE Owneroperated 40% 30% 58% 41% 44% 50% 51% 51% 70% Cash rent lease 50% 61% 40% 41% 44% 46% 34% 41% 26% Crop share lease 10% 10% 2% 18% 12% 4% 15% 8% 4%

12 Percent of Land across Ownership and Leasing Relationship 2017 Ownership Type Owner-Operated Cash Rent Crop Share Other Rental Percent of Land by Ownership Sole owner 40% 50% 10% 0% 22% Joint tenancy 68% 27% 6% 0% 27% Tenancy in common 61% 30% 9% 0% 8% Partnership 45% 49% 6% 0% 3% Estates 41% 53% 6% 0% 4% Trusts 21% 61% 17% 1% 20% Corporations 55% 36% 9% 0% 11% LLC 33% 59% 8% 0% 5%

13 Percent of Land across Iowa Residency and Leasing Relationship 2017 Iowa Residency Owner-Operated Cash Rent Crop Share Percent of Land by Iowa Residency Live in Iowa full time Live in Iowa Parttime 53% 41% 7% 80% 27% 60% 13% 7% Do not live in Iowa 26% 48% 25% 13%

14 Percent of Land across Financing and Leasing Relationship 2017 Method of Financing Owner-Operated Cash Rent Crop Share Other Rental Fully Paid For 32% 40% 9% <1% Mortgage 12% 4% Contract 2% <1%

15 Percent of Land across Owner Gender and Leasing Relationship 2017 Gender Owner-Operated Cash Rent Crop Share Percent of Land by Gender Male 55% 38% 7% 53% Female 39% 49% 12% 47%

16 Percent of Land across Age and Leasing Relationship 2017 Age of Owner Owner- Operated Cash Rent Crop Share Other Rental Percent of Land by Age < 25 Years old 47% 53% 0% 0% <1% % 30% 0% 0% 1% % 12% 5% 0% 4% % 32% 6% 0% 11% % 32% 7% 0% 24% % 40% 12% 0% 25% 75 or above 27% 61% 11% 0% 35%

17 Tenants Who They Are & How Long Are the Leasing Relationship 48% 30% YEARS OF LEASING RELATIONSHIP (NOT LEASE) 1 Year 2 to 5 Years 6 to 10 Years 11 to 20 Years 21 to 30 Years 31 to 40 Years 41 Years or More 22% 9% 5% 2% 7% 25% relative close friend someone else 22% 30%

18 Percentage of Farmland Method of Finance % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Free of debt Under contract Mortgaged Source: Ag DM PM1980

19 Younger owner have more contracts and debt 100% 80% 60% 40% 20% 0% Percent of Iowa Land by Financing and Age of Owner < >80 Free of debt Mortgaged Under contract Years Owned > 50 Years 8% Years 12% % Years 13% 15% Years 20% 19% Years 24% 21% < 10 Years 24% 24%

20 Inflation-adjusted Iowa Ag Real Estate Values Farm Crises and this downturn Source: USDA-NASS; Ag Census, Iowa Farmland Value Portal

21 Positive 1: Real Income Accumulation Source: Zhang and Tidgren 2018

22 Percentage of Farmland 100% % of Land by Acquisition Method % 60% 40% 20% 0% Purchase Gift Inherited Other

23 Percentage of Farmland % of Farmland by Age of Owners Avg. Age 64.5 years 100% 80% 60% 40% 20% 0% < > 74 Source: Ag DM PM1980

24 Percentage of Farmland % of Farmland by Gender of Owners % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Male Female

25 Percentage of Farmland % of Iowa Farmland by Owner Age and Gender 25% 49% of Iowa Farmland Owned by Women Landowners 20% 15% 10% 5% 0% < >=80 Males Females

26 Percentage of Farmland Distribution of Farmland by Highest Education Level % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% < High school High school Some post high school BS, BA, etc. Graduate degree Source: Ag DM PM1980

27 Distribution of Farmland by Farming Status of Owners % 80% 60% 40% 20% 0% Full-time farmer Part-time farmer Do not farm 57% of land owned by owners who not currently farm in 2017, of these, 34% land owned by owners with no farming experience and 23% by retired farmers Source: Ag DM PM1980

28 Distribution of Farmland by Farm Size acres 12% >2000 acres< 50 acres 4% 4% acres 8% acres 10% acres 19% acres 13% acres 30%

29 Primary Reason to Own Land 2012 vs All < >80 Current income 56% 49% 40% 56% 45% 41% Long-term investment 19% 19% 44% 15% 22% 19% Family or Sentimental 22% 29% 0% 25% 30% 38% Home 1% 2% 12% 2% 1% 1% Recreation 1% 1% 5% 1% 1% 0% None given 1% 1% 0% 1% 0% 1%

30 Percentage of Farmland Method of Anticipated Transfer % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Will to family Will to others Give to family Give to others Sell to family Sell to others Put in trust Other

31 New Section - Conservation practice adoption Conservation Practice % Acres % Owners No-Till adopted 27% 21% Cover Crops adopted 4.3% 5% Pay adoption cost - yes 20% 15% Pay adoption cost - maybe 16% 15% Longer lease - yes 5% 3% Longer lease - maybe 3% 2% Lower rent - yes 10% 6.5% Lower rent - maybe 0.6% 0.2%

32 Future Work: Comparison study with USDA TOTAL 2014 Tenure, Ownership and Transition of Agricultural Land Goal: Landlord Profiles missing from Ag Census An integrated survey of farm finance (ARMS) and land ownership (TOTAL) AELOS preceded TOTAL Agricultural Economics and Land Ownership Survey (1979, 1989, 1999) Latest AELOS data are 15 years old! Source: USDA ERS

33 Preliminary Takeaways & Trends 82% of Iowa land is debt-free 60% of land owned by owners 65 years or above, one-third of land owned by 75 years or above, 13% of land owned by women landowner above 80 years old Ownership continues to shift from sole owner to trusts and corporations 55% of Iowa land rented out mainly via cash rent 34% of Iowa land owned by landlords with no farming experience, 23% of land owned by retired farmers who do not currently farm 29% of Iowa land owned primarily for family/sentimental reasons

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36 Thank You! Wendong Zhang/Alejandro Plastina Assistant Professors and Extension Economists 478 Heady Hall Iowa State University / / Iowa Farmland Ownership and Tenure Survey report Ownership-and-Tenure-in-Iowa-2012