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Access To Land, Capital Biggest Hurdle For Young Farmers

USDA finds beginning farmers and ranchers have difficulty finding enough land to build a business

Published on: Feb 5, 2013

The USDA last week released surprising new figures about beginning farmers and ranchers, finding that not only do they have trouble accessing capital and land, the number of beginning farmers is declining significantly.

Between 1982 and 2007, the report found, the number of beginning farmers and ranchers – those who have managed or operated a farm for 10 years or fewer – declined along with the number of young principal operators. Additionally, 16% of all principal operators were under the age of 35 in 1982, but by 2007 that number dropped to 5%.

A contributor to that decline, the report suggests, is limited access to capital and land. Beginning farmers say that limited access hinders their ability to operate at a size large enough to make a living.

USDA finds beginning farmers and ranchers have difficulty finding enough land to build a business
USDA finds beginning farmers and ranchers have difficulty finding enough land to build a business

The challenges of acquiring land in today’s market have likely been exacerbated by the prolonged rise in farm real estate values. The per-acre value of farm real estate in 2012 averaged $2,650, up 10.9% from 2011, the report finds.

Most beginning farms include some owned land, but some have only rented land. Additionally, high startup costs and limited land make it difficult to turn a profit quickly.

USDA's report suggests that marketing and diversification practices may be a contributor to farm income.

Beginning farms, the report says, are more likely than established farms to be engaged in direct sales, such as at farmers’ markets, and fewer than 3% of beginning farms sold to local retail intermediaries in 2009-10. Beginning farms that sold directly to consumers, rather than to local retail intermediaries, were less likely than other beginning farms to make a profit.

Still, the USDA and Farm Service Agency have faith in beginning farmers and ranchers, offering programs to combat the decline in young farmers since 1992.

"Beginning farmers are a key to twenty-first-century agriculture," Agriculture Secretary Tom Vilsack said in a USDA blog regarding the report. "These new agricultural entrepreneurs are the cornerstone to a vibrant rural America and to the future of all agriculture."

Vilsack's comments reflect a continued USDA push to improve financial opportunities for beginning farmers. In fiscal year 2012, USDA's Farm Service Agency made 13,384 direct loans to beginning farmers for a total of $1.1 billion in obligations, the report says. Additionally, a microloan program was announced in January 2013 to provide beginning farmers and ranchers with small operating loans.

The 2008 Farm Act authorized $25 million for USDA to establish another opportunity for young farmers, the Transition Incentive Program, to encourage enrolled CRP participants to transfer land coming back into production to beginning famers engaged in sustainable practices.

To read the entire report, click here.