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USDA expects limited availability of farmland for public sale

According to the U.S. Department of Agriculture, about a third of the principal farm operators in 2014 were at least 65 years old. This compares with just 12 percent of self-employed workers in nonagricultural businesses that are 65 or older.

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According to the U.S. Department of Agriculture, about a third of the principal farm operators in 2014 were at least 65 years old. This compares with just 12 percent of self-employed workers in nonagricultural businesses that are 65 or older.

But for those a generation or two younger with aspirations of making production agriculture a viable occupational choice, one of their biggest obstacles has been access to land-either as an owner or renter.

The issue of farmland ownership and the potential for future land accessibility by young and beginning farmers was the focus of a recent study conducted by Daniel Bigelow, Allison Borchers and Todd Hubbs from USDA's Agricultural Research Service.

For study purposes, the researchers analyzed the data that was derived from the 2014 Tenure, Ownership and Transition of Agricultural Land Survey, which was part of a follow-up to the 2012 Census of Agriculture. Some of the highlights from the survey included the following.

There are approximately 911 million acres of farmland in the contiguous 48 states. Of those acres, 61 percent is owned by farm operators, 31 percent is owned by non-operator landlords, and the remaining 8 percent is rented from one operator to another.

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According to the survey, operator landowners purchased 50 percent of their land from non-relatives and 4 percent at auctions. In contrast, non-operator landlords acquired 30 percent of their land by purchases from non-relatives and 2 percent at auctions. However, 54 percent of the non-operator owned land was inherited or received as a gift.

Approximately 10 percent of U.S. farmland, or 93 million acres, is expected to see a change in ownership between the years of 2015-2019. However, approximately 60 percent of those ownership changes will occur through the use of trusts, wills or gifts.

That leaves less than 40 percent, or 34.3 million acres, that are expected to be sold during the years 2015-2019. Furthermore, only 21.1 million of the 34.3 million acres are expected to be sold to a non-relative of the current owner.

However, the researchers did note that while the amount of farmland expected to be sold is relatively small, some of the land transferred through trusts, wills and gifts may eventually be sold by the new owners, increasing the supply of land available for purchase.

In recent years, one of the most common farmland transfer methods, particularly among operator landowners, is putting land into trusts. Of all the farmland expected to be transferred during the years 2015-2019, land trust agreements exist on 48 percent of the land owned by operators, and 20 percent of the land owned by non-operators.

Since trusts are typically more complex than wills, it's expected that trusts would be used in situations involving transfers of larger parcels of land.

According to the 2014 survey, the average acreage for those planning to transfer land through a trust during the years 2015-2019 was 420 acres, compared with 47 acres for those planning to transfer land in a will.

The survey also indicated that while an estimated 57 million acres of farmland are planned to be transferred through a will, based on the life expectancy of the owners, only 20 percent of this land is expected to be transferred by 2019.

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Also, gifting of farmland was far more common among non-operator landowners than operator landowners.

While 10 percent of all U.S. farmland will likely see a change in ownership during the years 2015-2019, the researchers concluded that the supply of land available for purchase on the open market is not likely to vary much over time.

Therefore, access to land will likely remain a primary challenge for anyone wanting to make production agriculture their occupational choice, or for those small beginning farmers hoping to expand their existing operations.

To view the entire findings of the study "U.S. Farmland, Ownership, Tenure and Transfer," visit www.ers.usda.gov .

Dairy program sign-up deadline extended to Dec. 16

The USDA's Farm Service Agency has announced that it will extend to Dec. 16 the deadline for dairy producers to select their 2017 coverage levels under the Dairy Margin Protection Program.

The voluntary dairy safety-net program, established by the 2014 farm bill, provides financial assistance to participating dairy producers when the margin-the difference between the price of milk and feeding costs-falls below the coverage level selected by the producer.

While USDA projects that milk prices will increase throughout the year, many factors, including low world market prices, increased milk supplies, and slow demand have all contributed to a continued weakness in milk prices.

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In a related announcement that may bring some needed support to dairy producers and milk prices, USDA plans to purchase approximately 11 million pounds of cheese from private inventories to assist food banks and pantries across the nation, while reducing a cheese surplus that is at its highest level in 30 years.

The purchase, valued at $20 million, will be provided to families in need across the country through USDA's nutrition assistance programs, while assisting dairy producers whose revenues have dropped 35 percent over the past two years.

The USDA received requests from Congress, the National Farmers Union, the American Farm Bureau and the National Milk Producers Federation to make an immediate dairy purchase.

Section 32 of the Agriculture Act of 1935 authorizes USDA to utilize 2016 fiscal year funds to purchase surplus food to benefit food banks and families in need through its nutrition assistance programs.

The USDA will continue to monitor market conditions in the coming months and evaluate additional actions, if necessary, later this fall.

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