No Farms for the Young: The average American farmer is over 58. With significant barriers to entry, the average is only getting older.
By Adam H. Williams, Senior Associate at E911-LBS, LBSglobe.com, for WOLF STREET:
I work as a contract software engineer for a living. I live frugally and save every penny to pay down my gigantic student debt that piled up while I was getting my degrees (Bachelor’s in Economics and Philosophy, Master’s in Software Engineering) and later working on a Ph.D. in Informatics. I’m making good progress on the student debt, but it’s important to have dreams. Putting my aspirations to be a billionaire playboy astronaut temporarily on the backburner, I have always wanted to have a farm.
Childhood memories on my great-grandmother’s farm are some of my most pleasant. It was far from luxurious, but other than warnings not to go near the pond – lest the giant catfish eat me – it was a happy time. Running in the pasture, learning about cows, climbing on the old tractors, and exploring the woods and the night sky – they all made me happy. Those summers in Oklahoma provided a wonderful counterpoint to suburban Dallas.
I also learned a lot – a bit about how everything comes from somewhere and someone must make it happen, like learning first-hand how chicken nuggets come from chicken (slightly shocking!). So for me, I’ve always dreamt of having a farm.
What’s the Appeal – Who wants to be a Farmer anyway?
Besides the fun-times above, a farm for me mostly means security. I graduated from university in the midst of the Financial Crisis. My parents lost their jobs and their home. I was effectively homeless for a bit till we figured things out. I struggled, like almost all other young adults, to find any kind of work. Farming for me represents safety and independence against this backdrop of chaos.
There are other benefits. One is “Country culture,” which generally is far friendlier than not (though I’ll admit I’ve had a few “you’re not from around here” moments). Another is the emotional permanence of a farm: “Don’t sell the Farm” they say – if you have that, you always have something to fall back on. To me a farm represents an independence that almost nothing else can match, particularly when viewed from the collective social-media-driven insanity into which our world seems to have descended.
But there’s a problem: Try as I might, there’s absolutely no way I can afford to become a farmer, let alone get a farm.
Demographics by the Data
Much of the recent news about farming has focused on crop losses, bankruptcies, land prices, trade wars and climate-related losses. Agriculture makes up only about 1% of the U.S. workforce by profession. But for me, one data point stands out: Age.
That average age is rising in no small part because not a lot of new blood is coming into the fold. Only about 10% of American farmers are under 35. For every 4 farmers over 40, there is only 1 farmer under 40. This is exacerbated by rural flight and declining birthrates.
While the data is there for all to see, it’s yet to find its way into being a national priority – and that’s a problem.
The majority of farms in the US are small farms, though large farms are responsible for significant production. According to the USDA NASS report, of the 2.1 million farms in the United States in 2012:
- 97% were family owned operations,
- 88% were small family farms with less than $350,000 in gross cash farm income,
- 9% were mid-size and large family farms.
In addition, the USDA report found small farms account for:
- 48% of all farmland operated
- 47% of the value of farm real estate (land and buildings), 20% of agriculture sales, and earned 5% of the country’s net farm income.
In short, the typical American farmer is now nearing or past retirement age, has a small operation, and probably is not doing all that well financially.
What are some of the hurdles to becoming a farmer?
Insane Land Prices. They have skyrocketed 400-900% since the last farm crisis (1980’s), which started before I was born and risen further since the Financial Crisis when absentee landlords, coastal and international investors, and hedge funds began buying up acreage under the assumption that land prices can only go up! Which prices did until 2017 when they saw a slight drop as farm income and disconnected cost mismatch began to rebalance.
Prime farmland in the Midwest can still easily cost $8,000+ an acre. That’s a hell of a mortgage payment for a 100-acre farm! What land is available is of questionable quality. To purchase a small operational farm can easily cost a million dollars.
Overwhelming Student Debt. The average American college graduate has over $37,000 in student debt, which is about $500 a month in payments. For people with graduate degrees (like me) this debt is a lot more. Already struggling with loans, starting a small farm from scratch and waiting till harvest to get any return can seem impractical, if not insurmountable.
Farm Loans. Some time ago, I contacted several agricultural banks about starting up a farm. Some blew me off. But a few lenders told me that no one does start-up loans for farming. They’re all operating loans for established enterprises, usually with collateral. One nice man advised me the only real way to do it was to do a regular mortgage on a farmhouse with land. Meanwhile average farm debt is over $1.3 million and bankruptcies are on the rise.
High Startup Costs. Land prices aside, you still have to eat, have shelter and the lights on. Conventional farming requires expensive equipment, and there are huge costs in fuel, feed, petrochemical pesticides and fertilizers. Even if you go organic, there are still expenses and often much more labor cost. If you’re starting from a tiny house and a plot of land, you’ve got a Sisyphean financial hill to climb.
It’s not profitable! The University of Minnesota Extension found that farm income went net negative in 2014. Relatively improved economic conditions since then did not help farming that much: 2018 was barely breaking even, with the average Iowa farm making only $9 an acre! Meanwhile, commodity prices continue to fall. Using contemporary production methods, most farms are now in the red.
Rural America lacks good jobs. A harsh implication is that over 50% of small farmers have an additional occupation to make ends meet. However, good paying rural jobs can be hard to find, and when moving to a small town – you’ll find still find work to be done, at shockingly low wages.
All this makes for a steep hill to climb, and despite this it has not crushed my dream. But wow! No one said farming was easy, but as a society, we’re doing little to help enable the next generation of farmers. American farmers feed the world, and we may be able to spur innovation using technology or regenerative design systems like permaculture. But we won’t be able to do that without young people being able to get into farming. By Adam H. Williams, for WOLF STREET
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