According to a recent Iowa State University study, the ownership landscape of Iowa farmland is experiencing notable changes. The research reveals that 58% of Iowa's farmland is currently leased, a significant increase of one million acres since 2017. Cash rent leases remain prevalent, with fixed-cash rent rates climbing to 87%, marking a 5% increase since 2017.
The rise in cash rent, especially fixed cash rent, aligns with the growing number of part-time and non-resident landowners in Iowa. Among landowners who did not farm in 2022, 55% do not possess farming experience, making fixed cash rental contracts an appealing option.
The study also indicates a decline in direct farmland operation by landowners, reducing from 47% in 2017 to 42% presently. Additionally, sole ownership or joint tenancy decreased from 80% in 1982 to 52%, with trusts gaining popularity, increasing from 1% to 23% since 1982.
Remarkably, 84% of Iowa farmland is owned debt-free, the highest level recorded to date. This reflects an increase from 1982 when only 62% of land was debt-free. Contributing factors include improved commodity profits, landowners retaining their holdings, and government assistance during the COVID-19 pandemic.
These findings underscore the evolving dynamics of Iowa's farmland ownership, characterized by the prevalence of cash rent leases, the shift towards trusts, and the rise in debt-free land ownership.
Photo Credit: istock-AlenaMozhjer
Categories: Iowa, Business, Government & Policy