A farmer and his son at a farm in Lebanon, Ore., on April 13, 2022. (Nathan Howard/Getty Images)

Sixty-two percent of America’s farmers will reach retirement age by 2027

By Autumn Spredemann | The Epoch Times | April 26, 2023

It’s no secret that America’s hardworking farmers are looking to hang up their hats. However, the price of land has left many producers struggling to find successors willing or able to follow in their footsteps.

Research shows 62 percent of U.S. farmers were older than 55 as of 2017. That means more than half of American farms will begin undergoing ownership transitions as that group reaches retirement age by 2027.

This is happening against a backdrop of states racing to pass new legislation to restrict foreign purchase of U.S. agricultural land. At the same time, wealthy private investors are grabbing up as much as they can.

It’s an alarming situation for many, prompting the question: Who will own the future of American farms?

“It’s getting harder and harder because investors have more money to buy the land versus the farmers,” Tony Peirick told The Epoch Times.

Peirick runs the T&R Dairy Farm in Watertown, Wisconsin. It’s one of those classic American Midwest towns that looks like it was lifted out of a Norman Rockwell painting, surrounded by rolling pasture and cropland. Peirick has seen many changes in the industry over the years, recalling how he used to carry fresh cows’ milk in buckets as a boy.

“Years ago in our township, I bet we had 15 to 20 dairy farms.  Times have changed; there are only three dairy farms now milking cows,” he said.

Peirick enjoys the hands-on experience of running a dairy farm. He said having a love of farming is essential—particularly in dairy—to be successful due to the job’s demanding nature.

“Now our sons are taking it over and they’re doing the milking. It really takes commitment with dairy because you are there 24/7, every day of the week,” he said.

Steep Price Tag

Peirick is one of the lucky ones. The 67-year-old dairy farmer’s sons are willing to take the reins of the family business, which Peirick plans to gift to them.

Gifting his sons the land is crucial. Due to the ballooning price of U.S. farmland, it’s the only way they can afford to take the business.

“Back in the ’80s, land was only a thousand dollars an acre and investors weren’t looking at it. Land is more valuable now, up to 10 to 20 thousand dollars an acre just for farmland,” Peirick said.

Farmer Tony Peirick shows a no-till planter at Tiger Farms in Neosho, Wis., on March 26, 2021. (Cara Ding/The Epoch Times)

Agricultural land in the United States hit record highs last year, topping a nearly three-decade steady rise in prices that began in 1987.

In October 2022, cropland prices in southeastern Nebraska sold for more than $27,000 per acre. The average price per acre soared past $5,000 last year, an almost 20 percent spike compared to 2021.

When coupled with inflated operating costs and supplies, Peirick said producers have a rough road ahead.

“Next-generation farmers will face challenges like land availability and just the cost of material things,” he said.

Family-run businesses like Peirick’s account for 98 percent of all U.S. farms, according to the U.S. Department of Agriculture (USDA). But with the price of farm ownership so high, many aspiring producers are left with little option except to lease the land.

And even that is becoming a rich man’s pursuit.

Land rental prices are set to increase for the second year in a row. Research from the Illinois Society of Professional Farm Managers and Rural Appraisers showed rent increased across the board in all land categories between 2021 and 2022, ranging from $60 to $70 per acre. The organization predicts rent prices will increase by about $20 per acre again this year.

While $20 doesn’t seem like much, many farms are hundreds or thousands of acres.

Peirick’s farm is a 1,100-acre spread. For perspective, a $20 rent hike on a farm his size would cost a farmer $22,000.

“Farming is a capital intense business with high cost to access new farmland and the equipment needed to farm. This is [the] No. 1 deterrent I’ve witnessed from young or aspiring farmers from getting into farmland,” Mike Downey told The Epoch Times.

Downey is the co-owner of Next Generation Ag Advocates, an Iowa-based service that helps retiring farmers connect with a new generation of producers.  With so many farmers getting ready to retire, Downey says he has seen an increase in veteran producers willing to help out new farmers with a gradual ownership transition.

This process can take years but offers peace of mind to America’s retiring producers by helping keep small farms in the hands of people versus corporations.

Troubling Numbers

Eighty percent of rented farmland is owned by “non-operator landlords,” according to the USDA. That means 30 percent of all U.S. agricultural land is owned by companies or people who aren’t farmers.

It’s a trend Downey has seen in Iowa, where he said around one-third of all land is owned by people who aren’t operators or have no farm experience.

“I believe we, as an ag industry, need to do a better job educating new owners about the responsibilities that come with land ownership,” he said.

When it comes to non-operators owning farmland, the writing has been on the wall for years.

When Bill Gates became the largest private owner of U.S. agricultural land in 2018, the world sat up and took notice. At more than a quarter million acres, headlines of the Microsoft co-founder’s acquisitions triggered alarm over how wealthy private investment could impact America’s food supply chain.

Bill Gates speaks onstage at the TIME100 Summit 2022 on June 7, 2022 in New York City. (Jemal Countess/Getty Images for TIME)

But America had already been losing crop and pasture land to non-farming interests for years.

One 2020 analysis showed that the United States lost 11 million acres of farmland over the past 20 years.

Compounding this is the number of foreign investors making purchases in the agricultural sector. In 2022, foreign interests controlled 37.6 million areas of pasture, timber, and farmland. That’s roughly the size of Iowa.

For Downey, the shift toward non-producer land ownership and big private investment is a more significant concern than aging producers.

“I’m more concerned about what motives foreign buyers or larger institutional groups have for buying farmland, as it related to future food production,” he said.

Peirick shares this sentiment. Because at the end of the day, whoever holds the land holds all the cards. “The main thing is the land because investors are looking at it and trying to buy it, then will rent it back to farmers,” he said.

Words of Wisdom

Even optimistic estimates of the number of aging farmers who have identified successors are bleak. These figures range from 30 percent on the low end to less than 70 percent in the best-case scenario.

It’s part of what drives Downey and his team to help connect the new generation of producers during this critical changing of the guard.

“Our first priority is to make sure we are identifying all parties’ goals, so we are matching up like-minded individuals and philosophies for farming,” he said.

For Peirick, it all comes back to having a passion for working with the land. Because farming is a high-cost and challenging industry.

“It is labor intensive, and it’s hard to find people to do the hand labor,” he noted.

When asked if he had any words of wisdom to impart to future farmers, Peirick didn’t mince words, “The next generation of farmers needs to be passionate … the net income will be getting tight, so you have to enjoy what you’re doing because you’re not going to make a lot of income.”