Escalating land prices and lack of available farmland add more challenges to an already difficult occupation for young farmers.
"This is the kind of stuff I think about all night, as I can't sleep," said Randy Dreher, 31, of Audubon, Iowa. "It's crossing my mind every day. I love farming. That's what I want to do, but I don't have any land. How can you farm without land?"
Beginning farmer anxiety isn't just limited to land purchases. Increasingly, youngsters are disadvantaged when it comes to bidding against established operators for cash rent, too. Josh Turner, 30, of Lexington, Ky., lost a few rental farms this year when another operator offered $160 per acre cash up front. Turner was paying $75 an acre to rent.
"I'd like to be able to call something mine, that way I don't have to worry about people taking it from me," Turner said.
Dreher and Turner are part of a generation of young farmers confronting a mixed blessing: U.S. commodity prices and farm profits have appreciated faster than at any period in the last 40 years. On the other hand, sudden farm affluence has heightened competition for land.
Iowa farmland hit an average $6,708 per acre in 2011, up 32.5% from the year before and 261% above 2000 levels, according to the Iowa Land Value Survey. Similar price escalations have been common across the Corn Belt.
Current land prices just do not pencil out ownership for Dreher. If he purchased land tomorrow, it would barely pay for itself in 20 years, he figures. Plus lenders are increasingly requiring 50% down payments and assuming the cash flow to pay for it will come from corn prices closer to $5 than today's $7.
"There is no substitute for a young person choosing their spouse or ancestors well if they want to get into farming," said Glen Cope, chair of American Farm Bureau Federation's National Young Farmers and Ranchers Committee. In contrast to the 1980s, however, low interest rates and strong commodity prices are attracting more people into the profession, Cope said. Profit margins since 2006 in particular have showed young farmers that agriculture can compete well compared to careers in the city.
Take the youngsters waiting to be matched to farm retirees without heirs at Iowa State University's Beginning Farmer Center Farm-On program. Contrary to Census of Agriculture data, which indicate a young farmer shortage, ISU's would-be farmers now outnumber their elders by 13 to 1.
That ratio convinces Dave Baker of the ISU Beginning Farmer Center that high entrance fees to agriculture aren't scaring off young people. "They are uneasy about the dollars we're dealing with today, but the drive is there," Baker said. That's not to say that a near quadrupling of land values and volatility in markets pose low hurdles, he added.
Even beginner renters face a bidding war...
Source: Argentine Beef Packers S.A.
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